The Capitalist Manifesto

Here are the most important facts:

The capitalist revolution began in Great Britain in the late-18th century. Since that time, the capitalist nations have been the freest countries of history. In Western (and now parts of Eastern) Europe, in the United States, in Japan, Hong Kong and the other Asian Tigers hundreds of millions of human beings are guaranteed freedom of speech, of religion, of intellectual expression, of assembly, and of voting. Men are free there to earn and to own property – their own homes, farms and land. They are free to start their own businesses and to retain the profits that they earn. A hallmark of capitalism is a rule of law that protects private property, safeguards investments and enforces contracts. The fundamental moral principle upon which capitalism is based is that individuals have inalienable rights and that governments exist solely to protect those rights.

Capitalism requires the limiting of governmental power to maximize the freedom of the individual.

Capitalism, the system of individual rights, has brought increased freedom to men all over the world. In Europe, capitalism ended feudalism, the dictatorship of the aristocracy. In America, the principle of individual rights impelled the British colonists to throw off the rule of the monarchy and establish history’s freest nation – and the logic of the country’s founding principles led, in less than a century, to the abolition of slavery, a practice that existed everywhere in the world through all of history, and one still practiced widely today throughout the non-capitalist world. In post-World War II Japan, under America’s influence, a semicapitalist, vastly freer society replaced the military dictatorship that preceded it. In Hong Kong, Taiwan and South Korea, the freedom of their capitalist or semi-capitalist systems enabled those countries (or colonies) to become havens for millions of refugees fleeing Communist oppression.

More broadly, it is to the capitalist nations across the globe that immigrants come, millions of them, both historically and currently, often fleeing political and/or religious persecution in their homelands. They come on rafts to the United States from Cuba. By the millions and for 15 years, the Vietnamese “boat people” fled for their lives from Communism – and today, more than 1.6 million of them have found freedom, mostly in the West. Muslims seeking religious and political freedom flee to the Western capitalist nations from all over the Islamic world. And, of course, for more than 150 years, America has been the hope and the chosen destination of persecuted peoples from around the globe, including from Ireland, Jews from Eastern Europe, Sicilians suppressed by the 19th century remnants of aristocratic rule, and Chinese and Koreans oppressed by the Communists.

Finally, the Western capitalist nations, by inflicting military defeat on the Fascists, and political-economic defeat on the Communists, eliminated the scourge of totalitarianism from large parts of the earth, bringing greater freedom to hundreds of millions of human beings in Japan, Germany, Italy, Eastern Europe and Russia.

Capitalism is the system of freedom.

Freedom leads to dramatic economic results. The “great laboratory” of capitalist West Berlin side-by-side with communist East Berlin provided the most vivid example — West Berlin, a modern, prosperous commercial center, East Berlin so destitute and squalid that, by 1989, the rubble remained from World War II battles four decades earlier. The striking truth is that the capitalist nations are the wealthiest countries of history. For example, famine, the scourge of all non-capitalist societies, past and present, has been wiped out in the West. There has never been a famine in the history of the United States. Has there ever been one in any capitalist country? The author does not know of any.3

Regarding the empirical correlation between economic freedom, i.e., capitalism and prosperity: the Heritage Foundation and the Wall Street Journal jointly publish an annual survey examining the degree of economic freedom in the world. Its title is the Index of Economic Freedom. “The story that the Index continues to tell is that economically freer countries tend to have higher per capita incomes than less free countries… The more economic freedom a country has, the higher its per capita income is.” The editors organize 155 countries into four categories, which are, in ascending order – repressed, mostly unfree, mostly free and free. “Once an economy moves from the mostly unfree category to the mostly free category, per capita income increases nearly four times.” The mostly free countries, including Japan, Taiwan, Canada, Poland and Sweden, have an average per capita income of greater than $11,000. Additionally, the per capita income among free countries is, on average, almost double that of the mostly free countries. The free countries, including the United States, Great Britain, Hong Kong and Singapore show an average per capita income of greater than $21,000.4 Capitalism is the system of wealth.

But under statism, conditions are diametrically opposite. Many political systems have ruthlessly suppressed the rights and lives of individuals. Feudalism, military dictatorships, theocracies, National Socialism (Nazism) and Communism are merely several examples. What these and other such systems share in common is the denial of individual rights. These are the anti-capitalist systems in which the individual is forced to live and die for the state. The horrors of such lack of freedom are historically and currently manifest.

Under feudalism, for example, the common man – the overwhelming preponderance of mankind – was suppressed by the ancien regime. Heretics were often burned at the stake; countless women were condemned to death for practicing “witchcraft;” the serfs were tied to the land and possessed few rights; and the most advanced thinkers were persecuted – Galileo’s forced recantation under threat of torture was merely the most notorious such case.

In the 20th century, statism reached its most virulent form. The National Socialists plunged the world into the most catastrophic war of history and butchered 25 million innocent victims in a 12-year reign of terror. The Communists were just as prolific in their commitment to brutality, establishing in Russia, China, Cambodia, North Korea and elsewhere totalitarian regimes that murdered a numbing 100 million victims in 80 years.

In Africa, oppressive dictatorships and ghastly tribal slaughters are the norm. In Sudan, the Islamic regime currently holds tens of thousands of blacks in slavery. In Rwanda, Hutu “militia” in 1994 hacked to pieces 800,000 victims, mostly members of the Tutsi tribe. In Somalia, endless, bloody warfare rages between rival warlords. In Zaire, the dictator, Mobutu, bankrupted the economy, pushing countless individuals into starvation by embezzling billions of dollars. In Zimbabwe, the Marxist dictator, Mugabe, stole the land from commercial farmers with the inevitable result: famine for millions of people. The shocking truth is that more than 225 years after the American Revolution, freedom is virtually unknown around the globe.

Statism – the subordination of the individual to the state – leads inevitably to the most hideous oppression.

Further, just as the freest nations, i.e., the most capitalist ones, are the wealthiest – so the most repressed countries are the most destitute. For example, according to one economist, Angus Maddison, feudal Europe and its aftermath was as miserably poor as is commonly believed.

Economic growth was non-existent during the centuries 500-1500 — and per capita GDP rose by merely 0.1 percent per year in the centuries 1500-1700. In 1500, the estimated European per capita income was roughly $215; in 1700, roughly $265.

In the 20th century, China under Mao suffered massive famine that killed anywhere from 20 to 43 million individuals – and hundreds of millions subsisted on less than a dollar a day. Also under the Communists, conditions were similar in North Korea and worse in Cambodia. The Soviet Union and its slave states of Eastern Europe were miserably poor by Western standards. The repressive dictatorships of Africa are countries where per capita living standards are measured in hundreds – not thousands – of dollars. Across the globe, the oppressed nations of Asia, South America and the Middle East are unspeakably poor.

For example, the Index of Economic Freedom shows that the repressed nations – including Cuba, Iran, Iraq (under Saddam Hussein) and North Korea – have an average per capita income around $2800. The mostly unfree countries – including Russia, Saudi Arabia, Egypt and Brazil – possess an average per capita income of approximately the same. This means that the freer countries – the semi-capitalist and capitalist nations – enjoy per capita incomes from four to ten times as great as those in the non-capitalist world.

Additionally, it must be pointed out that the unfree nations of the world have per capita incomes as high as $2800 for primarily one reason: the enormous aid they receive in various forms from the West, especially the diffusion of American technology. Without investment, loans, aid, technical training and supplies, etc., from the capitalist nations, the unfree countries would subsist in vastly worse misery than they already do. As merely one example, without massive food shipments from the West, an incalculable number of human beings would starve to death in the endless famines that recur in the unfree countries, from Ethiopia to North Korea to Zimbabwe.

Statism – in all its forms – is the system of appalling destitution. The facts show that capitalism is the system of freedom – and that it creates wealth. The facts similarly show that statism is the system of repression – and that it causes poverty. Capitalism is the system of freedom and prosperity. Its antithesis – statism in any form – is the system of oppression and destitution. Despite these facts, however, widespread antagonism toward capitalism exists; and generally from among society’s most educated members – Humanities professors, writers, artists, journalists, teachers, clergymen and politicians.

Anti-capitalist intellectuals and writers present a constellation of related criticisms. They hold that capitalism creates inequalities of income, that it exploits the workers and the impoverished, that it supplants spiritual values with materialism, and that it leads to imperialism and war. Successful businessmen, according to their view, accumulated fortunes largely by means of fraud and peculation. Such accusations come alike from socialists and conservative defenders of the current mixed economies, from secularists and religionists, from Marxists and from Catholic clergymen, from Jews and from Muslims.

Marx and Engels, for example, wrote:

“The bourgeoisie [the practitioners and supporters of capitalism]…has left remaining no other bond between man and man than naked self-interest and callous ‘cash payment’… In one word, for exploitation veiled by religious and political illusions, [the bourgeoisie] has substituted naked, shameful, direct, brutal exploitation.”

Pope Paul VI in the encyclical, Populorum Progressio, claimed:

“But it is unfortunate that on these new conditions of society a system has been constructed which considers profit as the key motive for economic progress, competition as the supreme law of economics, and private ownership of the means of production as an absolute right that has no limits and carries no corresponding social obligation.” The Pope went on to state that “a certain type of capitalism has been the source of excessive suffering, injustices and fratricidal conflicts whose effects still persist.”11

Such “liberal” modern American historians and writers as Charles Beard, Richard Hofstadter and Matthew Josephson routinely denigrated leading industrialists and capitalists, arguing that Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, J.P. Morgan, et al., built their careers by “exploiting workers and milking farmers, bribing Congressmen, buying legislatures, spying upon competitors, hiring armed guards, dynamiting property, [and] using threats and intrigue and force.”

The system of freedom and wealth is repeatedly and savagely attacked by many intellectuals and other highly educated individuals — worse, by men and women claiming to be “liberals,” humanists, lovers of man, i.e., the very individuals who should function as the protectors and preservers of human life. There is an enormous disconnect between the facts of capitalism’s nature and history – and the evaluation of these by many “progressive” writers and the millions whose thinking they influence. The facts of capitalism’s nature and history are not unknown. Certainly the educated critics are well aware of them. Capitalism’s enemies are simply unimpressed. Why? What is responsible for the great disconnect? The reason is that the objections to capitalism are not based on factual grounds – and all the evidence in the world establishing the freedom and prosperity of those living under capitalism will not influence the system’s critics to the slightest degree. The criticisms are motivated solely by moral and philosophical theories.

Since long before capitalism’s 18th century inception, moral theories antagonistic to egoism and profit-making have been dominant. From its birth, therefore, capitalism was an intellectual anomaly: a great boon to human prosperity that was unsupported, even opposed, by men’s dominant moral and philosophical codes. Hence the tragic historical spectacle of capitalism providing abundance for the first time for untold millions while sustaining repeated intellectual blows from its moral and philosophical enemies — from thinkers who claimed to care about mankind. For example, socialists – whether of a Marxist or non-Marxist variety – insist that it is an individual’s moral obligation to sacrifice himself for the state. Capitalism, they accurately point out, is not founded on principles of self-sacrifice. Rather, capitalism rests on an egoistic moral code – on the inalienable right of each and every man to his own life. The freedom that capitalism offers an individual to pursue his own personal, selfish happiness is, to socialists, anathema. To them, individual rights and political-economic freedom are appalling because they follow logically from an egoistic moral code that they regard as evil.

As a further example, modern egalitarians seek equality of income. But, contrary to their wishes, the freedom of the capitalist system will always lead to enormous disparities of income, because, in fact, individuals are not equal. They are not equal in talent, they are not equal in initiative, they are not equal in capacity to satisfy customer demand. Left free, some individuals will cure cancer, some will make the baseball Hall of Fame, some will drop out of school, some will work in the local grocery store, some will refuse to work and sponge off of families, friends and private charities.

The enormous general prosperity of the capitalist countries – the ability of capitalism to inherit widespread poverty and then proceed to create a vast middle class – does not and will not begin to impress egalitarians. The principle of economic equality – not universal prosperity – is their moral god. Consequently, they admire the “equal” destitution of Cuba’s citizens and repudiate the unequally-shared wealth of America. To them, it is morally superior if everybody subsists roughly equally on $1,000 annually and morally inferior if some possess millions while others live on “merely” $15,000 or $20,000 or $30,000. Rational men prefer to earn $15,000 in a country where others are millionaires to $1,000 in a country where others are equally poor. But egalitarians loathe the economic inequalities necessitated by the freedom of the capitalist system.

Finally, to a devout religionist, such as contemporary Islamists, what matters the earthly riches and comforts enjoyed by those in the capitalist countries? To them, all that matters is salvation in a higher world. If Allah repudiates the secularism, selfishness and materialism of capitalism, if such a life leads to eternal damnation, then the religionist must abjure it, even seek to annihilate it. Islamic terrorists, after all, did not destroy the towers of the World Trade Center simply because they were tall buildings. For years, they targeted those buildings because they were the nerve center of the world financial markets, located in the Wall Street area of New York City, the world’s commercial center. Those towers were, in terms both practical and symbolic, at the heart of global capitalism – and this is exactly why they were destroyed.

Too often, freedom’s supporters have limited themselves to responses that demonstrate capitalism’s unparalleled ability to increase men’s prosperity. While true and important, such defenses miss the essence of the criticism. It is as if a great dialogue regarding the most momentous issues held across a span of centuries has been conducted at cross purposes. The critics argue on moral grounds; the supporters on economic grounds. The critics, wedded to a moral code of self-sacrifice, are oblivious to capitalism’s practical success. The supporters, equally wedded to such a code, are morally disarmed against the onslaught of their antagonists — and are reduced to the citation of empirical facts and figures. The supporters, unable to break free of the conventional creed urging selflessness, have too often regarded capitalism’s inherent pursuit of self-interest as a guilty secret, akin to an unsavory skeleton in a family closet.

It is time to come out of the closet.

For two centuries, capitalism has cried out for its supporters to finally embrace the code of rational egoism as an undiluted virtue of which to be proud. That will be an important part of this book. The torrent of facts showing capitalism’s practical superiority will be presented within a philosophical framework showing that capitalism is the only moral system for human beings.

Two intellectual tasks must be accomplished in order to establish capitalism as the ideal social system. The first is to factually document the enormous practical benefits to man’s life wrought by capitalism. These are the tasks of history and economics. The second is the job of philosophy: to show that morality arises only because of the factual requirements of man’s life on earth, i.e., the concepts “good” and “evil,” “right” and “wrong,” are based in the facts of human nature, specifically in the objective requirements of human survival and prosperity. Only when the good is shown to be that which promotes man’s life will it be possible to understand and appreciate the enormous moral virtue embodied in capitalism’s unparalleled ability to do precisely that. All codes upholding human sacrifice must be exposed as anti-life, therefore, antigood, i.e., immoral. When the philosophical job is accomplished, then and only then will men have the moral code by means of which to properly evaluate capitalism’s stunning, life-giving success.

The tragic spectacle of capitalism’s life-promoting achievements evaluated by means of moral philosophies woefully unequipped to understand or appreciate them will finally, after 200 years, end. Part One of this book performs the practical task. In examining capitalism’s essence, its predecessors, and its earliest days, it provides sufficient factual evidence to establish the system’s historic achievements and to refute the common misconceptions that have been fostered about its nature and its past. The data presented are illustrative of the moral-philosophical theories of egoism, individualism and man’s mind as his means of survival — theories that are later identified and articulated as the intellectual foundation upon which capitalism rests.

Part Two — the book’s most important section — is dedicated to the philosophical task: the explanation of the rational moral theories necessary to understand capitalism’s nature and achievements — and to finally assess them properly. After two centuries, the great disconnect between facts and evaluation will mercifully be brought to an end. The book’s thesis will be clear: capitalism is the only moral political-economic system because it alone embodies the rational principles upon which human survival and prosperity depend.

Part Three refutes the chronic moral accusations levelled against capitalism — that it is responsible for war, imperialism and slavery. It shows that, on the contrary, capitalism and the moral principles on which it is based represent the antidote to these horrors that have long afflicted mankind — and, conversely, that statism and the moral principles on which it is based bear causal responsibility for them.

Part Four is devoted to explaining the essential reason that capitalism is economically superior to any form of socialism or statism more broadly. The writings of the great economists both explain the workings of a free market and validate it as the only means by which to create widespread prosperity. That economics is relegated to the end of this book, therefore, represents no slap at the economists. Quite the contrary, for to a significant degree they have done their job superbly. It is time for the moralists and philosophers to do theirs.

Finally, the Appendix applies the moral principles elucidated in the book to the important and long misunderstood topic of the “Robber Barons.” When evaluated from the standpoint of a rational code of ethics that upholds the requirements of man’s life as the standard of morality, the enormous productivity of Carnegie, Rockefeller, Hill, Harriman, et al., stamps them as productive geniuses who were enormous benefactors of the human race. Originally, this chapter was included in Part One but needed to be cut because of space limitations. But the topic was too important to be removed from the book, so was included in its present form.

The overall goal of rational cognition in any field is to reduce a vast complexity of phenomena to a principle(s) that explain it. For example, consider the quest of the Pre-Socratic philosophers to explain the teeming multiplicity of nature in terms of a single material principle — whether water, air or Anaximander’s “boundless.” The Greeks called it “finding the one in the many.” Regarding the enormity of capitalism’s success, both morally and practically, in different centuries, on far-flung continents, involving a hundred issues, the explanatory principle that will emerge is: capitalism is par excellence the system of liberated human brain power. This principle will recur throughout the book.

The moral and philosophical theories presented in this book are grounded fully in the revolutionary intellectual work of Ayn Rand — and the reader is strongly encouraged to read her seminal novel, Atlas Shrugged, as well as her non-fiction works, The Virtue of Selfishness and Capitalism: The Unknown Ideal.

This book is written for the rational mind anywhere and anytime, whether the reader is a professional intellectual or an intelligent layman. It seeks to make the case for individual rights and freedom in terms intelligible to all rational men.

This book is in full, one-hundred percent support of capitalism, and repudiates all forms of the initiation of governmental force, whether in the economic or personal affairs of innocent men. As such, the presentation is neither balanced nor open-minded, if “open-minded” means the belief that all opinions hold equal cognitive weight — for they do not. Rather, the book is objective. It is open exclusively to facts and to rational argumentation. It is because of its objective method that its content is relentlessly pro-capitalist, for no facts exist and no rational arguments can be adduced to show the superiority of statism.

The author has a proudly selfish stake in promoting capitalism. As an American — though a teacher — he is rich, as are all Americans by both historic and current non-capitalist standards of wealth and poverty. Since capitalism is the only system capable of creating universal prosperity, he recognizes that his ongoing wealth depends on its continued 

Andrew Bernstein

Thanks to Capitalism, The Poor Get Richer

Everywhere, people trash capitalism.

But what they think they know about capitalism is usually wrong.

My new video debunks some myths about capitalism.

Do “capitalists get rich by taking money from others”?

“No one ever makes a billion dollars,” complains Rep. Alexandria Ocasio-Cortez. “You take a billion dollars.” In other words, capitalists get rich by taking money from others.

That’s nonsense, and Myth No. 1.

People believe that myth if they think that when one person wins, someone else must lose. It’s natural to believe that if you think there is a finite amount of money in the world. But there isn’t.

Free markets increase total wealth. Competition encourages entrepreneurs to find new ways to release more value from both people and resources.

Because capitalism is voluntary and consumers have choices, the only way capitalists can get rich is to offer us something that we believe is better than we had before.

That creates new wealth.

Steve Jobs became a billionaire. But by creating Apple, he gave us more: millions of jobs and billions of dollars added to our economy.

Research shows that entrepreneurs only keep 2.2% of the additional wealth they generate. “In other words, the rest of us captured almost 98% of the benefits,” says economist Dan Mitchell of the Center for Freedom and Prosperity.

“I hope that we get 100 new super billionaires,” he adds, “Because that means 100 new people have figured out ways to make the rest of our lives better off.”

But former Labor Secretary Robert Reich says we should “abolish billionaires.” He wants some form of wealth tax to hold their wealth down. “Entrepreneurs like Jeff Bezos would be just as motivated by $100 million or even $50 million,” Reich claims.

But Mitchell points out that if their income is limited, “Maybe they just take it easy … retire … sail a yacht around the world … consuming instead of saving and producing.”

I want them saving and producing! Billionaires have shown that they’re good at cutting prices or improving products or both.

As Michell puts it, “I’m not giving Jeff Bezos any money unless he’s selling me something that I value more than that money.”

Even if they don’t — even if they run out of ideas — their wealth is useful.

One reader called me “a complete moron” for saying that. He argues that “more money in the richest hands means money sitting in the bank doing nothing.”

But that’s an ignorant view of banks. Because banks loan that money out, they enable other people to buy homes, start new businesses and get educated.

Are “the rich are getting richer, while the poor get poorer”?

Still, I hear that “the rich are getting richer, while the poor get poorer!”

That’s Myth No. 2. Yes, the rich got lots richer, but the poor and middle class got richer, too.

“The economic pie grows,” says Mitchell. “We are much richer than our grandparents, and our grandparents were much richer than their grandparents.”

For thousands of years, the world had almost no wealth creation. Only when some countries tried capitalism did GDP grow.

Capitalists helped everyone, including the poor.

The media suggest that today’s wealth gap proves that’s no longer true. But they are wrong. Capitalism’s gradual progress continues. Census Bureau data shows that the average family today is almost a third richer than 40 years ago (yes, adjusted for inflation).

The media also say, “The middle class is in decline.”

It’s true, Mitchell points out. “It’s shrinking because more people move into upper-income quintiles! The rich get richer in a capitalist society. But guess what? The rest of us get richer as well.”

Next week, more myths about capitalism.

John Stossel

Where did All Those “Capitalist Pigs” Go

There are few ways in which a man can be more innocently employed than in getting money,” is an insight the famed biographer James Boswell attributed to Samuel Johnson.

Clients of the late Bernie Madoff, however, might take issue.

Over four decades, Madoff, acclaimed as the greatest fraudster of them all, ran a Ponzi scheme that swindled 40,000 people, including his closest friends, out of $65 billion.

But if “getting money” is among the most innocent of callings, America has more than its fair share of the goodly people who excel at it.

According to Forbes’s 35th annual ranking of billionaires, last year witnessed a population explosion. Some 660 new billionaires were added to the number for a total of 2,755.

And more than one in every four billionaires is an American.

According to Forbes, the richest man in the world is Jeff Bezos, founder of Amazon and owner of The Washington Post, with $177 billion.

Last year was the fourth in a row that Bezos led the list. His wealth exceeds the entire GDP of almost 150 nations.

Directly behind Bezos, at No. 2, is Elon Musk, chief executive of Tesla, whose wealth rose to $151 billion.

Numbers 4 and 5 were Bill Gates, co-founder of Microsoft, with $124 billion, and Mark Zuckerberg of Facebook with $97 billion.

“As a class billionaires added about $8 trillion to their total net worth from last year, totaling $13.1 trillion,” says the Washington Post.

“The United States had the most billionaires, at 724, extending a rapid rise in wealth that hasn’t happened since the Rockefellers and the Carnegies roughly a century ago. China, including Macau and Hong Kong, had the second highest number of billionaires: 698.”

This tripling of the wealth of the world’s billionaires and 30% increase in their number came during a year when America and the West endured the worst pandemic in a century and worst economic collapse since the Great Depression.

“While most of the world’s wealthiest people prospered during the pandemic, thanks in part to stock prices,” writes the Post, “millions of Americans grappled with job loss, food insecurity, debt, eviction and poverty.”

Query: Where was the outrage?

In previous times like these, where the rich got richer and the poor and working class rode the rails, we would have heard the excoriations of economic populists and echoes of TR’s “malefactors of great wealth” and FDR’s “forces of entrenched greed.”

But Forbes’ report of the population explosion among billionaires in 2020 passed seemingly without protest.

The dogs did not bark. Why not?

One reason: Whatever one may think of Bezos, Amazon, in 2020, was indispensable for delivering food and medicines to tens of millions of Americans who, given the “lockdowns,” depended on such deliveries for survival. You don’t castigate people providing your food and medicine.

Also, today’s billionaires’ boys club has come to understand how to make its astonishing wealth acceptable, by ingratiating themselves with their old ideological enemies.

Set up a tax-exempt foundation, fund it with billions of dollars, invite in liberals to sit on the board, and, at munificent salaries, to run it and distribute its income to liberal causes. The way to diminish leftist resentment at huge piles of private wealth is to give them a cut.

No wonder Elizabeth Warren’s wealth tax went nowhere.

However, they did it, America’s most successful capitalists have learned the lesson some previous generations of capitalists did not — how to preserve their wealth, privilege and economic power and avoid such derisive terms as “capitalist pig.”

Yet, of greater interest, and import, is that the China of the new Great Helmsman, Xi Jinping, a one-party Communist dictatorship, coexists with hundreds of Chinese billionaires.

What would Marx, Lenin, Stalin or the Mao of the Revolution that triumphed in 1949, who put his country through the Great Proletarian Cultural Revolution of the 1960s and 1970s, say of Chinese oligarchs and plutocrats, each of whom possessed at least a billion dollars in wealth?

Politically, China remains under an ever-tightening Communist rule.

But today, there are inequalities of wealth between the working poor and middle class, and the well-to-do and rich, that would have been anathema to the revolutionaries who founded Communist China.

Is China running a capitalist economy to generate the wealth to consolidate Communist Party control of the nation and grow China’s economic, military and geostrategic power until China displaces America as the first power on earth? So it would appear.

One wonders: Has China found the formula for global ascendancy that eluded the Soviet Union of Stalin, Khrushchev and Brezhnev?

Use state capitalism and market incentives to build the economic wealth that can be translated into the growth to enable China to ascend to a level of power where it is indisputably the first nation on earth?

Are the Chinese billionaires the geese laying the golden eggs for the Chinese Communist party? Is Communist doctrine being updated to accommodate the most successful Communist country of them all?

Patrick J. Buchanan is the author of “Nixon’s White House Wars: The Battles That Made and Broke a President and Divided America Forever.”

Let Us Be Clear Once and For All: Socialism Is Not at Root About Economics!

For the Conservatives, Capitalism is moral only to the extent that the capitalist lives to serve others. Self-interest can be smuggled silently in but not as a moral right or as a moral ideal. This means that “creeping socialism” always has the advantage and thus creeps unabated.

Over and over for decades, Conservatives have made the point that socialism does not “work,” that it does not create wealth but rather leads to poverty. This is true. Despite promising nirvana, “utopian” (socialist) communities and countries based on communism and socialism always failed economically.

Conservatives (including Wall Street Journal op-ed writers, right-wing think tanks, and pro-free enterprise economics departments) keep repeating the obvious and assert that people simply need better economic education to set them straight. Yet Conservatives keep losing every battle; the left repeatedly responds by ignoring their argument and rationalizing socialist failures.

The rationalizations run the gamut:

  • Previous socialist programs were not run correctly.
  • The moral ideal was right, but people are just too corrupt to practice it—there is a flaw in human nature.
  • The failure was caused by a plot by the U.S. (usually the CIA).
  • Socialism takes years to come to fruition and will triumph at some unspecified, future date….and so on.

What is striking is that no matter what the economic failures, true socialists rarely give it up. Why not. Because it has a moral base. Ayn Rand has made it clear that, “The power of morality is the strongest of all intellectual powers…men will not act, in major issues, without a sense of being morally right.” (quoted in Binswanger, 1986, p. 315).

Morality trumps economic facts if there is a conflict. This is true even if one’s accepted code of morality is objectively wrong. Millions have died fighting for Communism and Nazism (national socialism), including murdering millions of victims and keeping millions of others in hopeless poverty.

What is the problem with Conservatives (for more details, see Binswanger, 1986, pp. 95-100)? The Conservative argument is based on a contradiction: Capitalism is practical because most people want to live better, but morally it is defended by altruism, the premise that one must live only for the sake of others. Thus, Capitalism is only permissible so long as one lives, or claims to live, for “the public good.” For the Conservatives, Capitalism is moral only to the extent that the capitalist lives to serve others. Self-interest can be smuggled silently in but not as a moral right or as a moral ideal. This means that “creeping socialism” always has the advantage and thus creeps unabated. The hapless Conservative defense is routinely: “Hey, let us not overdo it. Let us have some capitalism. The welfare state will work better if capitalists have permission to function.” Socialists face no such internal contradiction; sacrifice for and of others is the morally right thing to do even when everyone stays poor, cf. Cuba and Venezuela. (See Locke, 2020, for a detailed discussion of Venezuela).

The socialist’s indifference to poverty reveals that there is a deeper moral (objectively anti-moral) layer than altruism which means sacrifice for the benefit of others. Since others do not actually benefit, the deeper standard is the destruction of economic freedom as an end in itself. This is pure nihilism, destruction for the sake of destruction: better to have everyone grovel in poverty than to let one person make a profit. Socialism is based on hatred for human life. In socialist societies, the worst people, power lusters, rise to the top, but they only rise because socialism gives them a moral sanction.

What then would change a socialist’s mind? Convincing them that socialism is anti-life and that Capitalism, which is based on individual rights, is morally good, i.e., that every individual has a right to their own life, which includes the right to trade freely with others, based on self-interest, and profit from it (i.e., without fraud or coercion). This would mean that capitalists would be admired, both practically and morally, rather than reluctantly tolerated as a necessary evil or totally forbidden. Economic education will only be embraced by people who think that Capitalism is not just practical but morally good. Moral education is needed as the proper base for economic education.

Some might ask about the puzzling situation of a Communist dictatorship, China, openly fostering Capitalism (though with numerous controls). This is a historically unprecedented event. So, what explains it? It is not based on respect for individual rights since communists deny them. It is based purely on power lust. For centuries China was backwards in relation to the west. Now they have decided to be imperialists, and they saw that the only way they could get the needed power was to create wealth which would give them the ability to intimidate or dominate other countries by using economic and military force together, e.g., massive exports, cyber-crime, building a large, military including a nuclear arsenal, trying to forcibly take over international waters in the South China Sea, threatening and harming fishing vessels from other countries, seizing islands they do not own to build military bases, stealing copyrighted and military technology from foreign countries, bullying countries which displease them (Australia), invasion (Hong Kong, Tibet), continual military threats (Taiwan), loaning money to poor countries, who will not be able to repay them, as a means of gaining power over them, cooperating with other dictatorships such as North Korea and Iran which are also building nuclear weapons to attack the U.S., etc.

China recently acknowledged that their use of Capitalism was only a strategic move until full socialism could be established. China, right now, is the single biggest threat to world peace and freedom. The old-line Marxists said capitalists would buy or make the rope that will be used to hang them. China wants to make their own rope and hang us with it. It remains to be seen how all this will turn out. Our weapons are:  the Declaration of Independence, the Constitution, our military might, Capitalism, and our commitment to freedom as a moral ideal–if we can keep them.

Edwin Locke

Celebrate Capitalism

We should not only allow global capitalism; we should welcome it and foster it in every way possible. It is time to rephrase Karl Marx: Workers of the world unite for global capitalism; you have nothing to lose but your poverty.

A version of this article was first published in 2003. CM is republishing it because its message still remains relevant today.

May Day will once again be celebrated by left-wing and environmentalist protestors united by a single emotion: a virulent hatred of capitalism, especially global capitalism. Why the hatred?

The advantage of a global economy based on free trade and capitalism is so obvious and so enormous that it is difficult to conceive of anyone opposing it. The benefit is based on the law of comparative advantage: every country becomes more prosperous the more it invests in producing and exporting what it does best (in terms of quality, cost, uniqueness, etc.), and importing goods and services that other countries can produce more efficiently. For example, let us say that Nigerian companies can produce T-shirts for $1 a piece whereas U.S. companies can only produce them for $5 a piece. Under free trade, Americans will buy their T-shirts from Nigeria. This division of labor benefits people in both countries. Nigerians will have more money to buy food, clothing and housing. Americans will spend less on T-shirts and have more money to buy cell phones and SUVs, and the investment capital formerly spent on T-shirts will be put to more productive uses, say in the area of technology or drug research. Multiply this by millions of products and hundreds of countries and over time the benefits run into the trillions of dollars.

How, then, do we reconcile the incredible benefits of global capitalism with the anti-globalization movement? The protestors make three claims repeatedly. First, they argue that multinational corporations are becoming too powerful and threaten the sovereignty of smaller nations. This is absurd on the face of it. Governments have the power of physical coercion (the gun); corporations do not; they have only the dollar–they function through voluntary trade.

Second, anti-globalists claim that multinational companies exploit workers in poor countries by paying lower wages than they would pay in their home countries. Well, what is the alternative? It is: no wages! The comparative advantage of poorer countries is precisely that their wages are low, thus reducing the costs of production. If multinational corporations had to pay the same wages as in their home countries, they would not bother to invest in poorer countries at all and millions of people would lose their livelihoods.

Third, it is claimed that multinational corporations destroy the environments of smaller, poorer countries. Note that if 19th-century America had been subjected to the environmental legislation that now pervades most Western countries, we ourselves would still be a third-world country. Most of the industries that made the United States a world economic power–the steel, automobile, chemicals and electrical industries–would never have been able to develop. By what right do we deprive poor, destitute people in other countries from trying to create prosperity in the same way that we did, which is the only way possible?

All of these objections to global capitalism are just rationalizations. The giveaway, and the clue to the real motive of today’s left and their hangers-on, is that all their protests are against–they are anti-capitalism, anti-free trade, anti-using the environment for man’s benefit–but they are not for anything. In the first third of the 20th century, most leftists were idealists–they stood for and fought for an imagined, industrialized utopia–Communism (or Socialism). The left’s vision was man as a selfless slave of the state, and the state as the omniscient manager of the economy. However, instead of prosperity, happiness and freedom, Communism and Socialism produced nothing but poverty, misery and terror (witness Soviet Russia, North Korea and Cuba, among others). Their system had to fail, because it was based on a lie. You cannot create freedom and happiness by destroying individual rights; and you cannot create prosperity by negating the mind and evading the laws of economics.

Furious over the fact that their envisioned utopia has collapsed in ruins, the leftists now seek only destruction. They want to annihilate the system that has produced the very prosperity, happiness and freedom that their system could not produce. That system is capitalism, the system of true social justice where people are free to produce and keep what they earn.

The fact that free trade is now becoming truly global is one of the most important achievements in the history of mankind. If, in the end, it wins out over statism, global capitalism will bring about the greatest degree of prosperity and the greatest period of peaceful cooperation in world history.

We should scornfully ignore the nihilist protestors–they have nothing positive to offer. We should not only allow global capitalism; we should welcome it and foster it in every way possible. It is time to rephrase Karl Marx: Workers of the world unite for global capitalism; you have nothing to lose but your poverty.

Copyright 2003 Ayn Rand Institute. All rights reserved. That the Ayn Rand Institute (ARI) has granted permission to Capitalism Magazine to republish this article, does not mean ARI necessarily endorses or agrees with the other content on this website.

ABOUT EDWIN A LOCKEEdwin A. Locke is Dean’s Professor of Leadership and Motivation Emeritus at the R.H. Smith School of Business, University of Maryland. He is a Fellow of the Association for Psychological Science (APS), the American Psychological Association, the Society for Industrial & Organizational Behavior, and the Academy of Management. He is the recipient of the Distinguished Scientific Contribution Award (Society for I/O Psychology), the Lifetime Achievement Award from the Academy of Management (OB Division), the J. M. Cattell Award (APS) and the Distinguished Scientific Contribution Award from the Academy of Management. He, with Gary Latham, has spent over 50 years developing Goal Setting Theory, ranked No. 1 in importance among 73 management theories. He has published over 320 chapters, articles, reviews and notes, and has authored or edited 13 books including (w. Kenner) The Selfish Path to Romance, (w. Latham) New Directions in Goal Setting and Task Performance, and The Prime Movers: Traits of the Great Wealth Creators. He is internationally known for his research on motivation, job satisfaction, leadership, and other topics. His website is:

Liberty Winning

Louis XIV had hundreds of servants who prepared him dinner. Today, my supermarket offers me a buffet Louis XIV couldn’t imagine. Thanks to trade and property rights and markets, each of us lives as if we had more servants than kings.

Do I live in an alternate universe?

The media tell me my side is winning.

Salon claims, “We all live in Kochland, the Koch brothers’ libertarian utopia.”

Tucker Carlson says, “Our leadership class remains resolutely libertarian.”

What? Who? Not President Biden.

Biden already spent $1.9 trillion on COVID-19 “recovery” mostly unrelated to COVID. Now, he wants trillions more for an “infrastructure” bill, even though most of the spending would not go to infrastructure. He’s eager to regulate more, too.

Maybe the pundits were talking about former President Trump. He tried to deregulate — a little.

But Trump vilified trade and raised military spending, increasing our debt by trillions.

We libertarians want to reduce debt and believe trade and immigration are good for America. Above all, we believe the best government governs least.

That’s not what I hear from most Democrats and Republicans.

So, how can pundits from both left and right say libertarian ideas are winning?

In a way, we are winning,” answers the Cato Institute’s David Boaz, author of “The Libertarian Mind,” in my latest video.

“Over the past couple of hundred years, we’ve moved from a world where very few people had rights and markets were not free — to a world mostly marked by religious freedom, personal freedom, freedom of speech, property rights markets, the rule of law.”

For most of history, no country had those things. As a result, says Boaz, “There was practically no economic growth, no increase in human rights and justice.”

Kings and tyrants ruled, enslaving people, stealing property and waging wars that lasted decades.

Then, in 1700 “suddenly, limited government and property rights and markets came into the world,” Boaz points out.

The result was a sudden increase in prosperity. Americans now are told that “the poor get poorer,” but it’s not true. Americans are 30 times richer than we were 200 years ago. When America began, rich people were poorer than poor people are today.

“In Colonial America,” says Boaz, “(if) you were traveling and you wanted a place to sleep, you’d go to an inn where everyone shared a bed.”

Benjamin Franklin and John Adams shared a bed on one of their diplomatic missions. They fought whether or not the window should be open.

John Jay, America’s first chief justice of the Supreme Court, complained about “sleeping with strangers and picking up bedbugs and lice,” says Boaz. “It’s not like that anymore because of the increase in wealth.”

Today, at motels all over America, middle-class and poor people have their own beds.

When markets are free and private property is protected, innovation happens in ways that allow ordinary people to live better. Over time, that innovation multiplies. It’s why, today, most of us live better than kings once did.

Louis XIV had hundreds of servants who prepared him dinner. Today, my supermarket offers me a buffet Louis XIV couldn’t imagine. Thanks to trade and property rights and markets, each of us lives as if we had more servants than kings.

We also live longer.

“President Calvin Coolidge’s teenage son was playing tennis on the White House tennis court,” says Boaz. “He got a blister on his foot and the blister got infected, and the health care available to the son of the president of the United States was not sufficient to keep him from dying.”

Few of us notice such steady progress.

The media give us bad news. “They tell us about cancer clusters and coups in Myanmar,” says Boaz. As a result: “We forget the big picture. It’s important to remember the big picture so that we don’t lose it.”

The big picture also includes progress in fairness and decency.

“We’ve moved from ‘some people have privileges that others don’t’ to ‘human rights belong to women and Black people and gay people,’” Boaz reminds us.

“The direction of history has been in the direction of markets, personal freedom, human rights, democratic governance, and that’s what libertarians advocate.”

John Stossel

Always Remember Capitalism

Always remember what created the splendor and intensity of mankind’s cities, once they’re gone, or impoverished beyond recognition. Remember all the things we have shamed, canceled and will, before long, be outlawed: Profit; free enterprise; rationality; individualism; self-responsibility; hard work; equal rights under the law with no guarantee of equal outcome. The woke world will permit none of these. Sooner than you think, America will have the most dramatic contrast between capitalism and socialism the world has ever seen.

Endless lockdowns, confiscatory tax rates, rigged elections, state-regulated media, and socialized everything will not permit the prosperity and vitality so many of us knew to continue. Save pictures like this, because they will be outlawed and cancelled under the next regime. How fortunate for those of us in our 40s and 50s, and older, to have known all that was possible. Hopefully future generations will figure out what eluded today’s pitifully ignorant charlatans who lost the greatest experiment in freedom human history has ever known.

Michael J. Hurd, Daily Dose of Reason

NOTE: The photo to whom the author refers is the classic photo of the New York skyline.

The Wisdom of Ayn Rand on Businessmen

“America’s industrial progress, in the short span of a century and a half, has acquired the character of a legend: it has never been equaled anywhere on earth, in any period of history. The American businessmen, as a class, have demonstrated the greatest productive genius and the most spectacular achievements ever recorded in the economic history of mankind. What reward did they receive from our culture and its intellectuals? The position of a hated, persecuted minority. The position of a scapegoat for the evils of the bureaucrats.”

AYN RAND, America’s Persecuted Minority: Big Business