Can our system function without capitalists?
Change the last word of this question and you will find it is a standard type that has been asked in every period of history. Four hundred years ago, in Europe, the question was: Can our economic System function without feudal lords? One hundred years ago, in the United States, the question was: Can our economic system function without slaveowners?
Just as society found that it could do without feudal lords and slaveowners, so it will find that it can do without capitalists.
A distinction must be made between capitalists and the means of production which they own as capital. Society cannot, of course, do without these means of production—the land, mines, raw materials, machines, and factories. These are essential. The difference is made plain by Robert Blatchford in his famous book, Merrie England:
To say that we could not work without capital is as true as to say that we could not mow without a scythe. To say that we could not work without a capitalist is as false as to say that we could not mow a meadow unless all the scythes belonged to one man. Nay, it is as false as to say that we could not mow unless all the scythes belonged to one man and he took a third of the harvest as payment for the loan of them.
So long as the capitalist performed the necessary function of administration, so long as his income was earned, he was essential; now that he merely holds stocks and bonds from which he draws unearned income while hired executives do the work, he is not essential.
Ownership, once useful, is now parasitic. And who can deny that our economic system could operate—better than ever before— without parasites? The fact of the matter is that we have reached the point where society not only can but must function without capitalists, since the power which is theirs as owners of the means of production must be used in such a way as to lead to unemployment, insecurity, and war.
Huberman and Sweezy, "Introduction to Socialism," Monthly Review