Monday, January 30, 2006


The Virtue of Capitalism

Capitalism is a very important economic system. It is questionable if we live in anything more than a "mixed" or socialist world, since the definition implies free markets, private ownership, and individualism.

Capitalism Magazine's defines capitalism as:

a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion. Capitalism is the system of of laissez faire. It is the system of political freedom.

I think most individuals have issues with Capitalism for one of two reasons:

1. The believe private ownership of production is coercive. There are many out there that believe they are "wage slaves" to corporations. How is voluntary action, like accepting employment, coercion?

2. They believe in a State mandated social justice system. They lack faith in private or free markets, and therefore have faith that a centralized agenda of theft and distribution can achieve justice. Although they lack proof, some might say we lack proof for our faith in a free market. How can liberty and equality come about through coercion?

What is the Virtue of Capitalism? Why is it better than other economic systems? Has true capitalism or the free market ever existed for more than a very short period of time?

"Worldviews are more a mental security blanket than a serious effort to understand the world."
-- Bryan Caplan, The Logic of Collective Belief
I think the real reason that some indivuduals do not trust Capitalism is that ultimately, they value security and equality more than they value freedom.

"Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety."
~Benjamin Franklin
"There are many out there that believe they are "wage slaves" to corporations. How is voluntary action, like accepting employment, coercion?"


Some people think voluntary action is insufficient. For example, if you have to throw all of your luggage out of a plane to keep it in the air (I know it's a crappy example), you will choose to do so voluntarily. You are of course better off than you would be if you crashed, but not better off than if the plane worked the way it was supposed to.

Okay, so to build off of Travis' point: when the only system readily available to the average person is one system with very few different aspects, it is not much of a choice, other than having to survive. And as the 'dominant paradigm' is enforced through laws, almost everyone succombs to it somehow, someway, at some point(s). At one point in the amerikan story if you had 40 acres and a mule, it meant you could survive and feed your family. What you couldn't make or grow you traded the surplus of what you could make or grow for the others. This is a barter system. There is probably another technical name for it but I'll let that name stand. Now, for the sake of argument, I'll make an observation: Lennon/Stalin type communism isn't the only communism as most mainstream thinkers assume, I think. So by parrellel anology the capitalism we have isn't the only type. Pro-capitalists may be trying to make this point, and anti-capitalists would do well to make this distinction as well. BUT we don't live currently in a pure capitalist system: it is a complex, a symplex or syndrome even maybe. And it is one type of capitalism. In the often misquoted speech by Eisenhower where he supposedly said "beware the military-industrial complex," he actually said "beware the military-industrial-CAPITALIST complex." This is an entirely more significant statement. When, as the defacto system as evolved into, big business, government, and religion (primarily through enforced morality and cultural values) work together you have proto-,if not actual text book facism. Yes I'm using this often casually lofted word but with here with all its gravity. (You should be hearing the imperial march from Star Wars in your head!). This is much bigger than mere simple capitalist ideals. When the state enforces a belief system, a value system, and defines what one must do to be successful, this is to be railed and rebelled against at all cost. I don't pretend for a minute that I value what small civil liberties the government 'lets' me have, (or more to the true nature of it "ordered liberties") less than what'security' the government provides. It's only a security if I feel safe, which as an activist and dissenter I certaintly don't or ever have. The community I engage and support as well as myself are the only ones responsable for "my" security, how WE DEFINE IT, NOT THE RULERS. There is not much free choice these days when everything from the day you're born brainwashes you, and I mean that sincerely as well, to believe in the current system. That's not freedom, that is slavery; we just don't think enough for ourselves to realize it and that is the true ignorance of our society at this time. I could go on and on but I'll leave room for others. Thanks,
I can understand some people's concerns with employment and regional/mobility issues or even monopsony problems and not having real choices for labor and so to receive money(wages), they do not have real choice. That is not as strong of an argument that it once was because of the virtual economic realm.
"They believe in a State mandated social justice system. They lack faith in private or free markets, and therefore have faith that a centralized agenda of theft and distribution can achieve justice. Although they lack proof, some might say we lack proof for our faith in a free market. How can liberty and equality come about through coercion?" Sorry Chris, but who is "they" and do "they" really represent everone? I don't think so. I think your describing a type of socialism or communism that simply isn't accurate to say all of "they" believe in. Let's stay away from generalizations and assumptions. I don't believe in any centralization beyond maybe my local library. I don't want anyone making decisions about how wealth is to be shared or land or any resource. That is up to the community (and I'll be more precise, the people I choose to live with as we have chosen to live) I am a part of. And we can use any system we choose without enforcing it on others who want to live differently. It may be just that simple.
I think our current political and economic system is quite lacking in its freedom and choice. If I had the change, I would get rid of all the fascist structures in this country and many others (monopolies, quotas, tariffs, regulation, restrictions, etc). The real difference between many of the folks who support either limited government or Anarchy is who they blame. I blame the State and its intervention with everything. Others blame religion, while others blame corporations.

Eisenhower told us to beware (thanks for pointing that out), because what is more dangerous that capitalism is fascism and communism, where all production is owned by the State (run by the state). At least with Capitalism, that is true Capitalism, the State is not supposed to be involved with the Economy, so all individual action is voluntary and all ownership is private. Since we do not have true capitalism, whose fault is it? How can it be the fault of the free market or capitalism, when it has yet to be tested?

True Capitalism is consistent with freedom of person and property.
We use generalizations for ease in argumentation. I was attempting to point out two of reasons, that so many folks that I have encountered, disagree with Capitalism. If you know more, please add them. Also, if you do not agree with what was said, then the "they" used does not apply to you.

I was using it, just to give some alternative opinion that would be more mainstream (Reps and Dems). Many of the well-educated (read “bleeding hearts”) folks that I have known over the years would go into this category, although no one ever fits any generalization completely. It is a pity really; it would make arguments so much easier (with just a simple left and right).
"[S]ome might say we lack proof for our faith in a free market."

Faith in what, exactly? Faith that it "works"? To what ends?

The beauty of a free market is that you need only realize that it is the best mechanism for humans to take part exclusively in volutary actions. You don't have to "believe in" any particular ends. The market is not an means to a predetermined social goal. Simply having the free market, absent coercion, allows individuals to pursue their own goals. In any kind of centralized government, in any institution where individuals cede power to another authority, there is always an end in mind (social justice, equality, security, etc.) When this institution pursues this end, individual liberty suffers.

So, do I have "faith" in a free market? Not really, I simply recognize that each person has his or her own ends (good and bad) and that a free market best allows those individuals to pursue them.

That quote was from Chris's original post. And free-market ideology probably does seem like a religion to some people, especially those who don't share it.

I think you made a good point with the last comment about Capitalism having no conscious social ends--it makes some people upset. After all, shouldn't society care for the weak, sick, poor, and elderly? OF COURSE WE SHOULD!! But is it right to force me to help someone else (taxation)? Is it even charity at that point? I don't think so.

Would I give money or time to a soup kitchen or homeless shelter? Maybe. Am I upset that Uncle Sam doesn't bother to ask me before taking my money (and time, indirectly)? VERY.

Even supposedly "free-market people" tend to advocate government help for their particular whim.

It turns out that some people also turn away from the free market in order to force their (superior) morality on others, and this should be no surprise.
I can't really speak for any other current of anti-capitalism, but the reason for my own anti-capitalism lies in what I see as the difference between capitalism and the free market.

Although I don't have a problem with your sense of the term "capitalism," Chris, it's considerably different from how it was originally used in the early/mid-19th century. It was used by early classical liberals (and by some Ricardian radicals like Hodgskin, who were both classical liberals and market socialists) to describe a system of class rule in which the state intervenes in the market on behalf of capitalists. The position of capitalists under this kind of capitalism was analogous to the position of landlords under feudalism: a class acting through the state. And arguably today's corporation, as part of a statist constellation of power, is even closer to the analogy of the landed aristocracy under the old regime. They don't just pressure the state, as per most libertarian public choice theory. They *are* the state.

So bringing things back to your first point about the coerciveness of voluntary arrangements, I'd argue that wage slavery exists because the present system isn't entirely voluntary. The owning classes rig the game, and rely on the state to enforce privileges to keep land and capital artificially scarce, and enable them to draw monopoly returns. In that scenario, workers sell their labor in a buyer's market, and labor is competing for access to capital instead of the other way around. Things would be a lot different in a totally free market, in which jobs competed for workers.
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