I always struggled with understanding the general economic model that is used mostly everywhere based on the notion of some mysterious entity called capital acting like some kind of force of nature. Or similar descriptions by endless amounts of current and historical literature.

So I thought stepping back and going to the root of all the things usually found in a society, which is just the aggregate behavior of everyone in it. Filtered by institutions (in the most broad meaning possible) with bias towards doing things one way or another. But how does aggregate behavior actually emerge? And specifically how does that create capital?

Capital in itself are just people interested in, and acting to increase their share of money. By reducing costs with any means and generally acting to undermine any effects or measures decreasing their profit. They create corporations or other entities with the purpose of supporting processes and goods to earn more money. And even going so far as to abstract everything into packaged and fractionalized financial instruments, further and further removing the money from their source, which means goods or labor.

Of course, starting out most everyone just wants to make a living, or support people, or want to somehow improve society. These goals work for some time on a small scale, where there is clear visibility of cause and effect. Where money is locally earned and locally spend. The fun starts when the goods or services become successful and scaling effects created during industrialization and the information age take over. During industrialization physical good production was increased to global reach, with global supply chains making it impossible to see which local action in a corporation would lead to labor changes on the other side of the globe. During the information age services would follow the same route and a corporation can now pretend to be local anywhere, creating the illusion of small comfortable scale.

This process of increasing size and scale, optimizing towards the one metric: increased revenue and profits, is done consciously by individuals in leadership positions who create the rules and guidelines for conducting business in an organization. Usually with the argument of market pressure and we-have-no-choice arguments. Layers of abstractions are created via bureaucracy or subcontractors or just physical distance or in the past starting with mechanization to shield the effects of optimizing for this one goal on the people having to provide value to sell. It removes any place to see what demands of increasing productivity causes in employees, basically in a sense removing empathy from the equation. Which is the fundamental reason why this whole thing is bad.

The actual direct use of money and local economy of the past was replaced with this ever increasing push. In short, the money was decoupled from its locality to a class of people acting only to abstract and decouple it further until it stands alone, see again financial instruments and speculation for obvious examples.

But why did that decoupling not happen earlier? I mean there were always rich people, surely as greedy as today. Yes of course, but the institutions, the laws aiding the accumulation and global scaling was not available. Also the barrier of entry is and was going steadily down. A lot of people want to become part of capital. Gig economy and single person companies exist since a while and the same effects are visible there. Sourcing globally from the cheapest non local supplier, asking for labor on online platforms with global competition and participating in the financial markets with no limits to mobility of money to anywhere where there might be an edge.

And the people of the capital class? As most of their decisions and cause and effect are so separated it is hard to condemn them completely as the whole growth and setup of a capitalist entity is made to hide these things away from anyone with enough power to change them. Of course, there are enough examples of people who very consciously and very publicly drive the interest of capital. There is definitely no excuse for that. But there are many people who want to act in the best interest of the people, or in the interest of good however they define it. But still playing by the rules of capital only delays the same outcome. At least in my opinion.

Can there be anything done? Well there are also positive sides, which I will write later probably, but mostly for specific things. In general this active process can only be changed by reducing scale, decreasing financial instruments, decreasing sizes of organizations and hard limits to accumulation of money. But to go back to the beginning, this needs to be a conscious choice by people in the position who would the process of becoming capital, like a successful small business owners looking to grow. Or just regular employees trying to earn more, leveraging anything that might provide more income, and again starting this process.

As you see I did not mention much about people employed by capital institutions. I think most everyone knows how that goes either by talking to people employed there or just experiencing it themselves. There are of course labor organizations that tried to scale as well to keep up, but that is a post for another day.