The Mandate of Capital

The Mandate of Heaven is a political philosophy concept from ancient China used to justify the rule of the emperor and dynasties for thousands of years. The mandate is based on the belief that heaven (天) grants the right to rule to a just and virtuous leader, it is a form of divine endorsement that legitimises the ruler's authority. The concept emphasises that the ruler must govern with virtue and benevolence as the ruler's ability to maintain the mandate depends on their moral conduct and effectiveness in leading the country. Natural disasters, famines, and social unrest were interpreted as signs that heaven was displeased with the ruler and such events could indicate that the ruler had lost the mandate, leading to potential rebellion and regime change. If a ruler or dynasty lost the Mandate of Heaven, it could be transferred to a new ruler or dynasty. This justified the rise of new dynasties and the replacement of old ones, providing a moral and philosophical rationale for political change in the nation.

While the Mandate of Heaven is no longer as relevant as it once was with the end of Imperial China, there exists a natural Mandate of Capital in the world that shares similarities. The flow and story of capital is rather similar to what is outlined above. Possessing capital is one that entails power and responsibility as controlling the allocation of resources dictates how us humans and society live, the ability to retain this capital requires the continued stability of the general economic system one is in, as well as the continued support of individuals with their labours and consumption. Sustained misallocation of capital whether by an individual or larger entity always results in their demise over the long-term.

I must also define what I am referring to when it comes to the term capital. It is a word with varying definitions and connotations based upon the context of use, so for the purposes of this writing, I will define capital as any asset that is used in the production of goods and services, including physical, human, financial, and natural resources. In essence, capital is any asset that confers value or benefit to its owners. Furthermore, while it may seem obvious, I must clarify that capital is not capitalism. There seems to be a notion by some that allocating capital is exclusive to capitalists, but that would be an oversight. Capitalism is a form of economic ideology but other forms of economic and social organisation ideology, whether it be socialism, communism, anarchism or anything in between, directly or indirectly deal with how we allocate and use capital.

The truth is, throughout history and for the foreseeable future, the allocation of capital is at the forefront of every decision we as individuals and a collective make. No matter your beliefs in how wealth should be distributed, if wealth is the root of evil, how society should be organised, and so on, how capital will be allocated is a question we are constantly asking and attempting to answer. Even in saying that you reject all notions of material wealth and capital, you are stating a belief in how capital should be allocated and utilised. Capital dictates how we live our lives.

To receive the power and privileges of capital, one must first obtain it. Depending on the economic system one is a part of, the methods to do so will differ from a small to large degree. As a general rule of thumb, capital is obtained through the support of the individuals within a system. Whether it be through monetary consumption, direct trade, ideological support, human labour, or more, capital is obtained through the individuals of a system entrusting one with their stake of goods and services, whether it be through a transaction of some sort or a non-reciprocal transfer. For example, it could be the payment of money to one party in return for goods or service. It could be volunteer work and donations in support of a political campaign or movement. If there is enough collective support, it could be the willingness to surrender all private capital to state control in certain political and economic systems. The list goes on. What matters is that capital is obtained through capturing the imagination and commitment of others, whether it be through trading goods or services, offering a new political system, and so on, it is through the willingness of others to exchange their time, labour, resources, knowledge and products that one can obtain capital for themselves to dictate. Those who do not possess adequate capital face a precarious situation. On the most extreme end and most seriously, without adequate access to capital and resources, one will struggle to meet their basic survival needs. However, to a more moderate impact, the lack of adequate capital restricts the ability of individuals to shape the world as they please. They are limited in spending and thus allocating resources to the fullest degree in which they may desire to do so. Regardless of what economic system you preach, obtaining capital is vital for survival and the achievement of your goals.

The distribution of capital is vital, and those who possess must endure great responsibility. Whether through their everyday consumption patterns, to large entities making influential allocation decisions, how capital is spent will ultimately shape the world and provide the foundation of whether they will be able to maintain this power of capital allocation over the long term. Once capital is obtained, it is usually firstly used for personal use, to satisfy the individual desire to improve or maintain living standards in their private lives. The excess capital, which is often quite significant for those with the most power and influence in any capital system will face large questions in how to wield the surplus capital they have control over. The projects invested in; the people being paid capital and how resources are generally being distributed is a fairly reliable indicator of what the future world will look like. Poor capital allocation will lead to a loss of capital. Extravagant and wasteful spending of capital tends to breed instability in economic systems, one only has to look at past kings with ill-advised allocation of resources and the instability created when the subjects of the king suffered in living standards due to poor capital allocation decisions. The poor allocation in these scenarios often led to the downfall of the King and often the system they had built around them and would bring about new individuals into the positions of power and the system they would build around them. In every system and era imaginable, how capital is utilised plays a strong factor in determining the success and failure on an institutional and individual level. How we allocate our currency is ultimately how we allocate our resources.

The point being this, regardless of your political beliefs and the system you live in, it is through the control of capital that we are most able to influence and shape the material world to how we want it to be. Hence, much like the Mandate of Heaven, there is a natural Mandate of Capital. Whoever can obtain and allocate capital shall be far more able to shape the material world as they see fit. Those who are bestowed with the responsibility of capital should allocate responsibly, for the misuse of capital will lead to the loss of capital for those individuals, whether it be through the allocation power of individuals in free market systems, or the collective power of the state in controlled economies, or so on. Without the will and support of the people, one may maintain their capital foothold in the short term, but in the long term, their capital foothold will collapse. Without the people’s support and labour, no economic system and no capital allocators within an economic system can survive. The Mandate of Capital is simple, in the long term, those who create value relative to what the people want will have the power of allocation, and they may maintain their position of strength with wise and responsible allocation of resources, but if they fail in this role and lose the support of the people, the capital system and allocators will change as the people see fit. This mandate applies to the average person working a common job to the selected few with the privilege of wealth, it simply manifests to varying degrees.