There are a number of fabrications that are woven into our basic understanding of capitalist society. Among the most prevalent of these fantasies is the notion that our governments inhibit capitalism. Some insist that governments hold back capitalism out of hubris, believing that armies of bureaucrats seek power over the economy to further their own ends. Others claim that government limitations on capitalism keep “crony capitalism” in check, allowing the economy to run smoothly absent the worst excesses of unchecked capitalists. While both of these common perspectives might hint at the truth, they fundamentally misunderstand capitalism’s relationship to contemporary governments.
In truth, governments exist to serve and maintain capitalism. At its very base, capitalism is only made possible with the sanctity of private property. Without private property, the ownership and products (in many cases, profits) of technology, businesses, and other forms of property are not clearly allocated to any single person. After all, these things are typically the result of many people’s work, so how are we supposed to decide who is entitled to what? To solve this, governments around the world enshrine and protect the right of one person to own a thing to the exclusion of all others: the right to private property. By doing so, the product of many people’s work can “rightfully” belong to one—the owner.
As governments enable capitalism by enshrining private property, they also maintain capitalism through their many laws. The most obvious of these are laws enabling commerce and protecting property, but even the many concessions that make businesses less powerful and less profitable exist to maintain capitalism. Labor laws that regulate businesses’ ability to force their workers to do things or enact minimum standards in regards to safety and wages are concessions to the demands of workers acting together through collective bargaining, striking, strategic voting, and at times, even violent uprising. Reforms of this kind exist to prevent future strikes and uprisings that threaten the viability of capitalism in the long term.
Many of the reforms that are recognized as socially beneficial exist because they are also beneficial to capitalism. For example, schools exist in part to teach children to adhere to a schedule and work towards an abstract goal; grades. This mirrors their future role in the capitalist economy; they will have to show up to work on a fixed schedule and work towards their employer’s profitability. And, after all, a person’s education can also serve to make them more efficient workers. Roads (and most publicly funded transportation projects), while socially valuable, largely exist to facilitate commerce and enable profit. Other reforms are often only enacted when the people who are governing are coerced, as is the case with the aforementioned labor laws and racial equality in the US.
Though capitalists occupy a shared space in society and the economy at large, their interests are not wholly overlapping. Some capitalists rely heavily on physical infrastructure, while others require geopolitical conditions conducive to international finance. A fully globalized market benefits some capitalists, while it pressures others. Disagreements within government often come down to these lines within the capitalist class; one party favors policy benefiting domestic industry, another is more closely aligned with pharmaceuticals, entertainment, agriculture, etc. Though the capitalist class holds many interests in common, governments exist just as much to mediate differences within the capitalist class as they do to mediate differences between classes. By serving as an intermediary within the capitalist class, governments aim to stabilize capitalism in order to prevent sectional crises, such as the one that arose around slavery in the US which lead to a destructive civil war.
It is easy to believe among cries about the needs of small business owners and squabbling over corporate tax rates that the government’s role is to police capitalism. This however is a fiction that obscures the fact that without government, capitalism is impossible. Governments not only enforce the basis of capitalism: private property, but they also marshal resources towards projects that further enable capitalism such as security and transportation. The many restrictions governments place on businesses are largely to save capitalists from their own rapacious tendencies, lest they cause enough damage to disrupt other capitalist interests. And ultimately, our governments’ relationship to capital is not that of limiter or adversary but of enabler, maintainer and protector.