Pro-Enterprise, Anti-Capitalist

Or: what Marx actually said about your local builder

Jul 05, 2026

A shout-out to my friends Dr Roger McEwan and Dr Bill Kaye-Blake for our discussions over the years about this particular topic. I wouldn’t have been able to think like this without them.

There’s a phrase I use to describe my politics, and it reliably produces the same reaction: a slight squint, as if I’ve said I’m a vegetarian butcher. Pro-enterprise, anti-capitalist. Surely, people say, that’s a contradiction? Enterprise is capitalism. Capitalism is enterprise. Pick a side bro.

I want to explain why it isn’t a contradiction, and, more provocatively, why the distinction I’m drawing was made a hundred and sixty years ago by Karl Marx. Many see Marx as a spectre and position him unfairly as the thing that caused twentieth-century state terror. I’m interested in Marx the economist: the first person to sit down and rigorously describe what actually happens between an employer and an employee when a wage is paid. If you can hold your ‘Marx-flinch’ for two thousandish words, I think you’ll find that the most useful analytical tools for defending the small business owner (the builder, the joiner, the café owner, the person mortgaging their house to employ four people in a small town) were built by the man everyone assumes wanted to abolish them.

First, the flinch

Say “Marx” at a barbecue and most people hear “communism,” and behind communism they hear queues, gulags, the Berlin Wall. Fair enough, the twentieth century happened. But this is a bit like refusing to read Darwin because of what social Darwinists did with him. Das Kapital (1867) is not a manifesto. It is a work of economic analysis, arguably the first serious anatomy of the economic system we still live inside. Marx spent decades in the British Museum reading factory inspectors’ reports, price data, and the classical economists (Smith, Ricardo) whose framework he was extending and critiquing. Mainstream economics has spent 150 years arguing with him, which is its own kind of tribute. You don’t argue that long with someone who got nothing right.

What Marx got right almost nobody before him had even seen: the structure of the capital–labour relationship. So let’s look at it, with a worked example from somewhere unglamorous.

The joinery workshop

Imagine a little joinery workshop in a small Central Otago town. The owner (call her Jackie) employs three joiners. Each joiner is paid $350 a day. That’s the wage: the price of a day of what Marx called labour-power, the capacity to work.

Here’s the thing Marx noticed that everyone else had glossed over. Labour-power is a very strange commodity, because it’s the only one that produces more value than it costs. Each of Jackie’s joiners, over a day, turns timber into windows and doors and staircases. Net of materials, machinery wear, power, and overheads, each joiner adds, say, $650 of value per day. They were paid $350.

The difference ($300 per joiner, per day) is what Marx called surplus value. Across three joiners, that’s $900 a day flowing to Jackie, who owns the workshop, the machines, and the order book. Nobody is being cheated in the ordinary sense: the joiners agreed to the wage, the wage is the going rate, everything is legal and above board. And yet the arithmetic is remorseless. The workers produce the value; a structural share of it accrues, automatically and daily, to the owner of the capital. Multiply Jackie’s workshop by every workplace in the economy and you have described the engine of the entire system.

That’s the core insight, in it you will no moral accusation but instead a fairly tedious accounting identity. Marx’s technical term for this arrangement was exploitation, but in Volume One this is a descriptive category, not (yet) a term of abuse. Exploitation, for Marx, is simply the extraction of surplus value, and it happens wherever the capital–labour relation exists: in the nicest workplace with the kindest boss, just as in the Victorian mill.

So is Jackie a thief?

Here’s where the argument actually lives, and where I want to steelman both sides properly.

The hard-Marxist reading says yes, structurally, if not personally. All value is created by labour; therefore any appropriation of surplus is wage theft with better manners. The joiners made the windows. Jackie’s ownership of the machines is itself just congealed past labour (someone built those machines, too). On this view, the only fair arrangement is one where the producers keep, or collectively control, the full value of what they produce.

The liberal reading says no, Jackie’s share is a return, not a theft, and it compensates real things. She risked her house on the bank loan. She went unpaid for two years while building the order book. She does the quoting, the coordinating, the lying awake at 3am when a container of hardware is stuck in Tauranga. She could lose everything in a downturn; the joiners could lose a job they can (in principle) replace. Deferred consumption, risk-bearing, coordination, judgement: these have a price, and the surplus is that price.

Both readings are internally coherent, and most people’s politics amount to picking one and shouting it at the other. I think that’s the wrong move, because the interesting question isn’t whether surplus is extracted. It always is; that’s what the wage relation is. The interesting question is whether the extraction has a limit at all, and if it does, who or what sets it.

Notice the asymmetry in what each perspective stakes. The joiner stakes something genuinely unbounded and unrecoverable (days of a finite life, the body, time that will not come again) for a strictly bounded return: the wage. Jackie stakes something bounded (a quantum of capital, painful but denominated, insurable, in the last resort ‘limited liability’ walk-away-able) and the question is whether her return should be bounded too. The liberal reading is at its strongest when it says risk deserves a premium. Fine. But a premium is, by definition, calculable: it is some multiple of the thing risked. And anything calculable is boundable. If Jackie risked $500,000 and a decade of her life, there is some multiple (3x? 10x? reasonable people can argue) that fully honours the risk. What no theory of risk can produce is a return with no denominator at all. As Scooby might say, “ruh-roh!”

Which brings us to June 12, 2026

About three weeks ago, when SpaceX listed on the Nasdaq, Elon Musk became the world’s first US-dollar trillionaire. His fortune has since bounced around the trillion mark with the share price, and at its June peak stood at roughly 3% of US GDP, comfortably ahead of the 2.3% John D. Rockefeller commanded in 1913, when he was the scandal of the age.

Let’s be a tradesman-Marxist (Thanks Roger for this term!) for a moment and do some joinery-workshop arithmetic on this. A trillion dollars is a million million. On a good New Zealand professional salary of $100,000 a year, you would need ten million years of work to earn it. Homo sapiens has existed for about three hundred thousand. There is no theory of risk-bearing, coordination, deferred consumption, or entrepreneurial genius (no theory anyone has ever proposed) under which one person’s contribution is worth thirty-three human-species-lifetimes of labour. Musk’s downside risk was never destitution; his upside turned out to be a number previously reserved for national economies. Bounded risk with unbounded return. The liberal defence of Jackie’s margin simply does not scale to this, and pretending it does is the great category error of our public conversation about wealth.

This is what we mean by wreckage capitalism: not enterprise, but the funnel. An architecture in which surplus doesn’t circulate through wages, communities, and reinvestment, but pools, compounds, and buys the machinery (political, legal, medial) that widens the funnel further. Here in New Zealand, IRD’s High-Wealth Individuals Research Project found in 2023 that our wealthiest families paid an effective economic tax rate of less than half that of the median New Zealander, mostly because the funnel’s proceeds arrive as capital gains, and we have arranged not to see those.

The distinction was Marx’s all along

Now the move I promised. In the opening chapters of Capital, Marx distinguishes two circuits of exchange.

The first he writes as C–M–C: commodity, money, commodity. You sell in order to buy. Jackie’s joiners live here; so, mostly, does Jackie. The workshop sells windows (C) for money (M) in order to buy groceries, school shoes, a holiday in Wānaka, timber for the next job (C). Money is a means; the circuit terminates in use, in consumption, in a life being lived. It has a natural stopping point: enough.

The second circuit is M–C–M′: money, commodity, more money. You buy in order to sell dearer. Here money is the beginning and the end, and the prime (that little mark denoting increase) is the entire point. Crucially, M′ has no terminus. M′ exists only to become M′′, which exists only to become M′′′. Marx’s name for money moving through this circuit is capital, and his description of the person bearing it is exact: the capitalist is not a greedy person but a functionary, someone who, willingly or not, personifies the circuit. “Accumulate, accumulate! That is Moses and the prophets.” (Volume 1, Chapter 24).

Pro-enterprise, anti-capitalist is not a paradox at all. It is the difference between the two circuits. Enterprise (both employing enterprise and profitable enterprise) can live in C–M–C: surplus is generated, yes, but it terminates in use. Wages, reinvestment, the owner and their family’s good life, the apprenticeships they bring, the sponsorship of the local rugby club. Capitalism proper is M–C–M′ unbound: accumulation as an end in itself, at which point the enterprise, the workers, the town, and eventually the biosphere become mere moments in money’s self-expansion. Marx’s target was never Jackie. His target was the circuit that, given time, eats Jackie too: the private-equity fund that buys the workshop, loads it with debt, extracts the surplus to a holding company in Delaware, and closes it when the multiple is right.

This matters in a very practical way in a country like ours, where around 97% of businesses employ fewer than twenty people. Most New Zealand “capitalists” are not capitalists in Marx’s sense at all. They are enterprisers, people running C–M–C at a slightly larger scale, whose interests are actually opposed to the funnel, because the funnel extracts from them too: through bank margins, duopoly suppliers, commercial rents, and the asset-price machine that prices their children out of the towns they built businesses in. One of the great successes of our political discourse is convincing the small enterpriser that Musk is her ally and the joiner she employs is her enemy, when the arithmetic runs precisely the other way.

A Lacanian coda: the discourse with no brake

(If theory isn’t your thing, skip to the links. But this is where I think the deepest cut lies.)

In 1972, in Milan, Jacques Lacan sketched what he called the capitalist’s discourse, which he explained was a mutation of the old master’s discourse in which one thing is foreclosed: castration. In Lacanian shorthand, castration isn’t an anatomical drama but the structural fact of limit, the acceptance that no one gets everything, that lack is constitutive, that “enough” exists. Lacan, who had explicitly modelled his concept of surplus-enjoyment (plus-de-jouir) on Marx’s surplus value (plus-value), observed that the capitalist’s discourse runs beautifully. Actually, a bit too beautifully. It runs, he said, like clockwork; it runs so fast that it consumes itself.

This is the register in which the environmental catastrophe becomes understandable. A discourse that forecloses limit does not just permit the destruction of the biosphere; it cannot compute the biosphere as a limit. “Enough” is not a value it can represent. The atmosphere, the water table, the soil: these return in the Lacanian Real, that which was foreclosed from the symbolic order coming back, indifferent to our accounting, as fire and flood. M–C–M′ meets a finite planet, and the prime keeps demanding its increment.

Enterprise, in the sense I’ve been defending, is precisely a castrated economic form (and I mean that as the highest compliment). A Lacomony perhaps? The workshop closes at five. The order book is full until March, and that is good news, not a growth-rate failure. Jackie wants a good life, not all the lives. The circuit terminates because there is an enough.

So what is fair?

I don’t have a formula, and I’m highly suspicious of anyone who does. But the analysis I think does yield tests, which is more than the shouting match offers, here are a few thoughts on this:

Does the surplus terminate in use, or does it compound as capital? Reinvestment in the enterprise, wages, the owner’s prosperity, community circulation, versus accumulation whose only purpose is further accumulation.

Is the return a multiple of something? A risk premium has a denominator. If you cannot say what was risked and cannot state the return as a proportion of it, you are not looking at a reward for risk; you are looking at a funnel.

Could “enough” ever, in principle, arrive? For Jackie, yes: the mortgage cleared, the retirement funded, her children will have an inheritance, the business perhaps has been handed on or sold to a young enterprising joiner, previously in her employment. For the circuit M–C–M′, structurally no. Any economic arrangement for which “enough” is unrepresentable will, given time, consume its workers, its host society, and its planet. Not out of malice, but because that is what the circuit is. It will burn and burn, until it burns itself out.

Fair, on this account, is not equality of outcome, and it is certainly not the abolition of Jackie. Fair is enterprise with a terminus: surplus honestly acknowledged as jointly produced, shared on terms the producers could actually defend to each other’s faces, and accumulation that answers to a denominator. Everything past that point (the funnel, the trillion, the atmosphere spent as an externality) is not enterprise succeeding. It is enterprise’s corpse, re-animated by the circuit.

Marx saw the difference first. It’s time we took it back from both the people who worship the funnel and the people who’d burn the workshop down.

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