What is capitalism?

Image: Johannes Plenio


Everything that constitutes a necessary presupposition for the capitalist economy needs to figure directly into our definition of what capitalism is.


The protagonist of the book Capitalism in Debate – A Conversation in Critical Theory (Boitempo, 2020) that I co-authored with Rahel Jaeggi is capitalism. Our goal there is to revive “large-scale” or encompassing social theorizing. In fact, this is not a new interest for me. My worldview was formed in the New Left a long time ago; When I entered academia, I brought with me the firm conviction that capitalism was the main category or framing concept for all serious social theorizing.

But as the decades passed and the New Left ethos faded, I began to realize that not everyone shared this assumption. Instead, the default position, at least in the United States, was (and still is) liberalism of one sort or another, whether left-wing egalitarian or libertarian individualist. When that realization came, I saw that my formative New Left experience had been an aberration, just as the 1930s had been for an earlier generation of American radicals.

These were periods when the structural weakness of the entire social system became widely apparent, leading many people to radicalize their thinking, to search for the deep roots of social problems and to identify the structural changes needed to overcome them. But these periods were exceptional. In “normal” times, nearly all Americans, including those leaning to the left, were focused on reforming the system, seeking to expand rights and opportunities within it.

Let me be clear: I am not opposed to all these efforts; there may be good tactical reasons for pursuing certain types of reforms in historically specific situations. But when reformism becomes the default view taken for granted, the effect is to divert attention from the fundamental structures of the social totality. And this is bound to be politically and intellectually crippling in the long run – particularly in times of acute crisis, as at present.

Anyway, there came a point when I became aware of the problem: interest in the structural critique of the social totality was waning in progressive circles. In response, I made a series of interventions designed to expose the amnesia of political economy – showing how it had fallen outside feminist and anti-racist critique, Critical Theory in every sense, as well as all forms of egalitarian thinking.

I also argued that a one-sided focus on issues of recognition or identity politics dovetailed with and strengthened the process of neoliberalization then underway. I thus went from thinking quite obviously that capitalism was the central issue in critical theorizing to understanding that this thesis had to be discussed. In order to face the issue directly, I set about trying to convince my readers to redirect their attention to capitalism. This agenda was highlighted in the book.

The book is also an attempt to integrate the best insights of Marxism with those of feminist and LGBTQ theory, anti-imperialist theory and critical racism, democratic and ecological theory – summarizing everything we have learned since the 1960s. In my view, this process is not about adding new variables or “systems” to existing Marxist paradigms. Rather, it requires revisiting the concept of capitalism and thinking about it differently.


Many people think that capitalism is simply an economic system. This is the view of traditional economists and corporate leaders. It is also the common sense of most so-called people, including progressives and even many who call themselves Marxists. But this view of capitalism is too narrow. It obscures all the basic conditions necessary for a capitalist economy to prosper, things it depends on and freely appropriates, but which it despises and cannot recover.

I'll tell you what those conditions are concretely in a minute. But I want to say something first: everything that constitutes a necessary presupposition for capitalist economics needs to figure directly into our definition of what capitalism is. Far from being a mere “economy”, capitalism is something bigger, an “institutionalized social order” on the same level as, for example, feudalism. Just as feudalism was not simply an economic system, nor a military system, nor a political system, but a broad social order that encompassed all of these, the same is true of capitalism. It is a form of organization, not just of economic production and exchange, but of relationship of production and exchange with a wide range of social relations, activities and processes, considered non-economic, that make the economy possible. In the book, I describe four of those non-economic background conditions without which a capitalist economy could not exist.

The first is social reproduction – or, as many now call it, “care” (carework). Included here are all activities that create, socialize, nurture, sustain, and replenish the human beings who hold office in the economy. You cannot have a capitalist economy without “workers” who produce goods under the umbrella of for-profit companies. And you can't have them without the “caretakers” who reproduce humans in environments outside the official economy. Care includes pregnancy, childbirth, breastfeeding, feeding, bathing, socializing, educating, healing, protecting, comforting – in short, everything that is essential to sustain beings that are at the same time biological. and social.

Historically, much of this work was unpaid, as it was done by women – often in families, but also in communities, neighborhoods and villages; in civil society associations, public sector agencies and, increasingly now, in for-profit enterprises such as schools and nursing homes. But wherever it is done, social reproduction is an indispensable precondition for economic production – hence for profit-making and capital accumulation.

However, capital spares no efforts to avoid paying for this service – and, when it cannot do so, it strives to pay as little as possible for it. And that has to be taken as a problem. As capitalist societies encourage businesses to take advantage of medical care without the obligation to finance it, they consolidate a profound trend towards socio-reproductive crisis, as well as a gender order that subordinates women.

A second precondition for the capitalist economy to prosper is ecological. Just as a capitalist economy depends on welfare services, it also depends on the availability of energy to fuel production and material substrates, including “raw materials” for the manufacturing industry. Capital depends, in short, on “nature” – first, on specific substances directly appropriated by production; and second, general environmental conditions, such as breathable air, fresh water, fertile soil, relatively stable sea levels, a habitable climate, and so on.

But therein lies the problem. By its own conception, capitalist society encourages owners to treat nature as an inexhaustible “non-economic” treasure, available to be appropriated infinitely, without the need for replacement or repair, on the assumption that it regenerates itself. Now that's a recipe for disaster that perhaps we finally understand now. Capitalist societies institutionalize a structural tendency towards ecological crisis – as well as deepening the vulnerabilities of nature that stem from their action.

These disparities point to a third necessary condition for capital accumulation: the confiscated wealth of subjugated populations. Often racially dominated, these populations are destined for dispossession – not exploitation. Deprived of state protection and enforceable rights, their land and labor can be taken without pay to be channeled into the circuits of accumulation. Expropriation is often seen as an old-fashioned form that has been replaced by a system that accumulates wealth through the (free) exploitation of “workers” in factories. But this is an error.

Capitalist production would not be profitable without a continual flow of cheap inputs, including natural resources and unfree or dependent labor, confiscated from populations subject to conquest, slavery, unequal exchange, incarceration, or predatory debt and therefore unable to fight back. Remember: behind Manchester was Mississippi, that is, it was slave labor that provided cheap raw cotton and fed the iconic textile factories at the beginning of industrialization. But the same is true today: Behind Cupertino is Kinshasa, where “coltan” for iPhones is mined cheaply, sometimes by enslaved Congolese children.

In fact, capitalist society is necessarily imperialist. It continually creates defenseless populations for expropriation. Your economy doesn't work if everyone receives wages that cover their true reproduction costs. It doesn't work without a color line that divides populations globally into those that are “merely” exploitable from those that are totally expropriated. By institutionalizing this division, capitalism also strengthens racial-imperial oppression and the political struggles that surround it.

This suggests a fourth background condition for the subsistence of the capitalist economy: public power – paradigmatically, but not only, the power of the State. Accumulation cannot proceed without the action of this power in its historical core: without legal systems that guarantee private property and contractual exchanges. Also essential are the repressive forces that manage dissent, quell rebellions, and reinforce the status hierarchies that allow corporations to dispossess racially dominated populations at home and abroad.

Nor can the system function without regulations and public goods, including infrastructure of various kinds and a stable money supply. These resources are indispensable for accumulation; however, they cannot be provided by the market. Rather, they can only be secured by the exercise of public power. Capital therefore needs this power; but it is also prepared to undermine it – by evading taxes, weakening regulations, outsourcing operations or capturing public agencies. The result of all this is a set of embedded tensions between “the economic” and “the political” – and this is a deeply ingrained tendency of the political crisis.

In all four cases, capitalist societies institute contradictory relationships between their economic systems and the non-economic conditions necessary for them to subsist. These relationships become visible only when we understand capitalism broadly – ​​not as a “mere” economic system, but as an institutionalized social order that also includes social reproduction, nature, the expropriated wealth of subaltern populations, and public power – all of which are essential for accumulation, but at the same time they are predated, destabilized and depleted by it.

That's the main point of the book. Capitalism in Debate – A Conversation in Critical Theory: replace the narrow definition of capitalism as an economic system with an expanded view of it. This approach broadens our view of the contradictions of capitalism and therefore explains why capitalist societies are properly – and not accidentally – prone to systemic crises – some of which appear to be “non-economic”. It also seeks to integrate the old socialists' interest in exploitation with the concerns of feminists, environmentalists, anti-racists, anti-imperialists and radical democrats.

The system failures

Tensions are bound to arise in any form of capitalist society – no matter exactly how disjointed production is from social reproduction, the economy from politics, the society from nature, the exploitation of expropriated labor. These disjunctions represent the failures of the system, the joints that register its contradictions, which become more acute as capital destabilizes its own conditions of possibility. Capital is willing, as I said, to cannibalize social welfare, nature, public power, the wealth of racially dominated populations - and so, periodically, it comes to threaten the well-being of almost all people who are not property owners. . No matter how well a given regime of accumulation manages to refine these contradictions for a while, it can never fully master them. Eventually they re-emerge and the regime begins to disintegrate.

What follows is an interregnum, a period of uncertainty between social and political regimes, when all the irrationalities and injustices of the system come into full view. In such moments – and there have only been a handful of them in the more than 500-year history of capitalism – what emerges is not “just” a sectoral crisis, but a complete crisis of the entire social order, which shakes the prevailing common sense. And this opens the door to a much wilder public space, where newly radicalized social actors come up with a wide range of competing ideas about what should replace it. Aiming to build a counter-hegemony, they struggle to assemble a new historical bloc with enough weight to reorganize capitalist society – not only restructuring the economy, but also rebuilding its relations with the “non-economic” conditions that make it possible.

The result in each of these situations so far has been a new form of capitalism, which overcomes, at least for a while, the contradictions generated by the previous regime, until the most recent one also generates its own contradictions, giving way then space for the next. This is the pattern of capitalist development to date: a succession of regimes, punctuated by developmental crises.

Thus, we can distinguish between “normal politics”, when a critical mass of people accept the terms of the social order as given and struggle to improve their position within it – and “abnormal” politics, when the whole order seems unstable and is called into question. The last situations represent rare – and relatively emphatic – liberating episodes, when we can contemplate changing the rules of the game.

I am especially influenced by The long twentieth century (Counterpoint/Unesp) by Giovanni Arrighi, as well as by the French Regulation School. I agree with your successive order of regimes: mercantilist or commercial capitalism; capitalism laissez-faire or liberal-colonial; state-organized or social democratic capitalism; neoliberal or financialized capitalism.

But I conceive these regimes differently. Those thinkers focused on the relationships between states and markets, showing how a given divide between them became contested and then revised. This is important for sure. But it's just one of several threads in a larger story. Regime changes comprise more than changes in the relationship between economics and politics; they also change the relationship between production and reproduction, between the economy and nature, between exploitation and expropriation. These other strands have been neglected in most previous periodizations. But they are central to the understanding I advocate. As I said, I am committed to expanding our understanding of capitalism to include gender, ecology, race, and empire. And that requires bringing the neglected parts of history into our periodizations.

*Nancy Fraser is a professor of political and social sciences at New School University. She is the author, among other books, of The old man is dying and the new one cannot be born (Literary Autonomy).

Translation: Eleutério FS Prado.

Text established from an interview given to Lara Monticeli during the annual meeting of the research network “Alternatives to Capitalism”, held in New School for Social Research in 2019.

Originally published in the magazine Emancipation: a journal of critical social analysis, 2021.

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