Tag Archives: Capitalism
Capitalism Is Not a “System”. It’s Simply LIBERTY !
“Capitalism isn’t a system. It’s merely free people exchanging goods and services with other free people for voluntarily agreed upon prices.” [Peter Fithian]
Capitalism simply refers to economic freedom from government interference. It’s not a system, and it’s not obliged to be a system. The obligation is on government, busybodies and criminals to STAY THE HELL OUT OF OTHER PEOPLE’S LIVES.
Unless your explicit goal is to destroy America, nobody can deny: The Biden Regime is a catastrophe.
If the American republic somehow recovers from all this, and private property, rationality, capitalism, individualism, self-responsibility and the Bill of Rights unexpectedly roar back into relevance … WHAT will future historians make of this era?
“When stupidity is considered patriotism, it is unsafe to be intelligent.”
— Isaac Asimov
“Americans are fleeing Democrat-run cities in blue states and relocating to more affordable metro areas, in part due to housing costs and inflation that are pricing them out of their origin cities, according to a report from the real estate brokerage site Redfin.”
The same idiots will, in many cases, vote for the same policies in their new homes that caused them to flee their old homes. Example: Austin, Texas. It’s a vicious, unending cycle of incurable stupidity.
Someone asked: Do we need a dictatorship to get us out of this mess?
It’s not so much that we “need” a dictatorship but that we are living in a dictatorship already. The U.S. Constitution is no longer operative. That millions of us on the right — good souls, all of us — still persist in thinking we are in a free country, and that all we need is one good election to fix it all — well, it’s heartbreaking and stupid. If we are to survive, and if freedom is ever to make any kind of comeback, we, the good guys, must stop being stupid. Forget the law. Their law is not the Bill of Rights. These tyrants are lawless. We are at war, because they declared it.
Too strong a position, you say? Check back with me in a few months.
Michael J. Hurd, Daily Dose of Reason
Watch “Myths, Lies and Capitalism” on YouTube
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The World According to Leftists/Socialists Is Hell on Earth
In the post-capitalist future that we are now creating, there will be no luxuries like Krispy Kreme donuts. People won’t know what they’re missing!
Never trust anyone who HATES capitalism, but LOVES money.
“Batteries do not make electricity — they store electricity produced elsewhere, primarily by coal, uranium, natural gas-powered plants, or diesel-fueled generators.
So, to say an EV is a zero-emission vehicle is not at all valid.” [unknown]
Capitalism and The Swedish Welfare State
As Ayn Rand observed, a compromise between two opposite principles – such as between freedom and government controls in a welfare state – is never sustainable,
Prompted by my recent visit to Finland, I listened to a lecture about the country’s challenges in the new world economy. It was delivered by the controversial banker and economist Björn Wahlroos at Aalto University Business School, my alma mater. (The lecture is available on YouTube, with English subtitles promised soon. Wahlroos’ talk starts at minute 37. Most comments about Sweden start about minute 65).
Dr. Wahlroos is a controversial figure in Finland, a country committed to the egalitarian welfare state, because he has been a provocative proponent of free markets and a critic of the welfare state. In this lecture, however, he argued that it is possible to have both the welfare state and market freedom if a country approaches them “sensibly.”
Wahlroos criticized the Finnish government for the zero GDP growth rate in the last 13 years and attributed it to the government’s “insensible” approach to growing the welfare state while failing to facilitate economic growth through market mechanisms. He cited Sweden as a model, where the modest annual GDP growth of 2% in the same period has financed welfare spending and avoided accumulating government debt.
In a 10-year period from the mid-1990s to the mid-2000s, Sweden’s social democratic government recognized the unsustainability of the ever-ballooning welfare state and set to restructure it (without giving it up). According to Dr. Wahlroos, Sweden did this primarily by lowering taxes and by reforming labor laws. It abolished the wealth tax for its wealthiest citizens in 1995 and the inheritance and gift taxes for everybody about ten years later. It also increased the tax deduction for employment income and changed labor laws, which encouraged those on welfare to go to work. Finally, in 2020 the government introduced a flat state income tax of 20%.
For such improvements of people’s economic freedom, Wahlroos deservedly praised Sweden. However, his endorsement of the Swedish welfare state model which permits modest economic growth by slightly expanding economic freedom, is indefensible. He argued that Sweden (where he now lives) represents a middle ground (a compromise) between the Asian tigers (such as Singapore, South Korea, Taiwan) and Venezuela. Therefore, it is “a sensible home for industry and also a tolerable home for capitalists.”
Dr. Wahlroos’ argument is indefensible because a compromise between two opposite principles – such as between freedom and government controls in a welfare state – is never sustainable, as Ayn Rand has observed.
Why? Because a system based on opposite principles is unstable and always moving toward either direction. There is no “sensible” middle to which the proponents of the principles can agree in the long term.
A welfare state based on a mixed economy, is founded on the idea that society – all its members collectively – must take care of everyone’s needs. In a welfare state, those who have more needs must be taken care of by those who are more productive and therefore can afford to help.
This principle of “to each according to his needs and from each according to his ability” is in a fundamental conflict with the opposite principle that individuals should be free to pursue their own interests. The latter includes trading with others and not being forced (through taxation and regulation) to give away the wealth they have produced so that the government can satisfy others’ needs.
The welfare state with lower taxes that incentivize production of goods and services and thereby wealth creation may be tolerable to some capitalists, as Wahlroos argued. In a world that consists mainly of welfare states of varying degrees and dictatorships of various stripes, this may be understandable.
However, why should capitalists – those who accumulate wealth by producing and invest it in further production and wealth creation – want to compromise and merely have “tolerable” conditions for production?
They do so because they have embraced the welfare state as an ideal. They have accepted that it is their duty to fulfill the needs of others by enabling the welfare state. But if the capitalists and the producers really wanted to increase everyone’s prosperity and wellbeing, they should reject this wrong ideal. Instead, they should embrace true capitalism: the principles of individual freedom and free trade. It is only such a system that can maximize and sustain economic growth and wealth creation, and therefore, human wellbeing.
The evidence, both historic and current, shows clearly that freedom leads to the greatest prosperity and wellbeing for all, and that government controls hinder them. If human flourishing is the goal, the compromise between the principles of individual freedom and the government control that is the welfare state should not be tolerated or embraced.
Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. How to Be Profitable and Moral” is her first solo-authored book. Visit her website at profitableandmoral.com.
Watch “Is Capitalism Moral?” on YouTube
The Philosophical Foundations of Capitalism
The greatest era of capitalist development—the last two centuries—has taken place under the ongoing cultural influence of the philosophy of the Enlightenment.
An excerpt from Chapter 1 of Capitalism: A Treatise on Economics, Volume I.
This book shows that the laws and social institutions necessary to the successful functioning, indeed, to the very existence, of the division of labor are those of capitalism. Capitalism is a social system based on private ownership of the means of production. It is characterized by the pursuit of material self-interest under freedom and it rests on a foundation of the cultural influence of reason. Based on its foundations and essential nature, capitalism is further characterized by saving and capital accumulation, exchange and money, financial self-interest and the profit motive, the freedoms of economic competition and economic inequality, the price system, economic progress, and a harmony of the material self-interests of all the individuals who participate in it.
As succeeding chapters of this book will demonstrate, almost every essential feature of capitalism underlies the division of labor and several of them are profoundly influenced by it in their own operation. When the connections between capitalism and the division of labor have been understood, it will be clear that economics, as the science which studies the production of wealth under a system of division of labor, is actually the science which studies the production of wealth under capitalism. Economics’ study of the consequences of government intervention and of socialism will be shown to be merely study of the impairment or outright destruction of capitalism and the division of labor.
1. The Philosophical Foundations of Capitalism and Economic Activity
Economic activity and the development of economic institutions do not take place in a vacuum. They are profoundly influenced by the fundamental philosophical convictions people hold.15 Specifically, the development of capitalist institutions and the elevation of the level of production to the standard it has reached over the last two centuries presuppose the acceptance of a this-worldly, pro reason philosophy. Indeed, in their essential development, the institutions of capitalism and the economic progress that results represent the implementation of man’s right to life, as that right has been described by Ayn Rand—namely, as the right “to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life.”16 Capitalism is the economic system that develops insofar as people are free to exercise their right to life and choose to exercise it. As will be shown, its institutions represent, in effect, a self-expanded power of human reason to serve human life.17 The growing abundance of goods that results is the material means by which people further, fulfill, and enjoy their lives. The philosophical requirements of capitalism are identical with the philosophical requirements of the recognition and implementation of man’s right to life.
It was no accident that the gradual development of capitalist institutions in Western Europe that began in the late Middle Ages paralleled the growing influence of pro-secular, pro reason trends in philosophy and religion, which had been set in motion by the reintroduction into the Western world of the writings of Aristotle. It is no accident that the greatest era of capitalist development—the last two centuries—has taken place under the ongoing cultural influence of the philosophy of the Enlightenment.
Philosophical convictions pertaining to the reality and primacy of the material world of sensory experience determine the extent to which people are concerned with this world and with improving their lives in it. When, for example, people’s lives were dominated by the idea that the material world is superseded by another, higher world, for which their life in this world is merely a test and a preparation, and in which they will spend eternity, they had little motive to devote much thought and energy to material improvement. It was only when the philosophical conviction grew that the senses are valid and that sensory perception is the only legitimate basis of knowledge, that they could turn their full thought and attention to this world. This change was an indispensable precondition of the development of the pursuit of material self-interest as a leading force in people’s lives.
The cultural acceptance of the closely related philosophical conviction that the world operates according to definite and knowable principles of cause and effect is equally important to economic development. This conviction, largely absent in the Dark Ages, is the indispensable foundation of science and technology. It tells scientists and inventors that answers exist and can be found, if only they will keep on looking for them. Without this conviction, science and technology could not be pursued. There could be no quest for answers if people were not first convinced that answers can be found.
In addition to the emphasis on this-worldly concerns and the grasp of the principle of cause and effect, the influence of reason shows up in the development of the individual’s conceptual ability to give a sense of present reality to his life in decades to come, and in his identification of himself as a self-responsible causal agent with the power to improve his life. This combination of ideas is what produced in people such attitudes as the realization that hard work pays and that they must accept responsibility for their future by means of saving. The same combination of ideas helped to provide the intellectual foundation for the establishment and extension of private property rights as incentives to production and saving. Private property rights rest on the recognition of the principle of causality in the form that those who are to implement the causes must be motivated by being able to benefit from the effects they create. They also rest on a foundation of secularism—of the recognition of the rightness of being concerned with material improvement.
Thus, insofar as production depends on people’s desire to improve their material conditions, and on science, technology, hard work, saving, and private property, it fundamentally depends on the influence of a this-worldly, pro reason philosophy.
And to the extent that production depends on peace and tranquility, on respect for individual rights, on limited government, economic and political freedom, and even on personal self-esteem, it again fundamentally depends on the influence of a this-worldly, pro reason philosophy.
From the dawn of the Renaissance to the end of the nineteenth century, the growing conviction that reason is a reliable tool of knowledge and means of solving problems led to a decline in violence and the frequency of warfare in Western society, as people and governments became increasingly willing to settle disputes by discussion and persuasion, based on logic and facts. This was a necessary precondition of the development of the incentive and the means for the stepped-up capital accumulation required by a modern economic system. For if people are confronted with the chronic threat of losing what they save, and again and again do lose it—whether to local robbers or to marauding invaders—they cannot have either the incentive or the means to accumulate capital.
During the same period of time, as part of the same process, a growing confidence in the reliability and power of human reason led to the elevation of people’s view of man, as the being distinguished by the possession of reason. Because he was held to possess incomparably the highest and best means of knowledge, man came to be regarded, on philosophical grounds, as incomparably the highest and best creature in the natural order, capable of action on a grand and magnificent scale, with unlimited potential for improvement. In conjunction with the further philosophical conviction that what actually exist are always individual concretes, not abstractions as such, and thus not collectives or groups of any kind, the elevated view of man meant an elevated view of the individual human
and his individual potential.
In their logically consistent form, these ideas led to a view of the individual as both supremely valuable—as an end in himself—and as fully competent to run his own life. The application, in turn, of this view of the individual to society and politics was the doctrine of inalienable individual rights, and of government as existing for no other purpose than to secure those rights, in order to leave the individual free to pursue his own happiness. This, of course, was the foundation of the freedom of capitalism. The same view of man and the human individual, when accepted as a personal standard to be lived up to, was the inspiration for individuals to undertake large-scale accomplishments and to persevere against hardship and failure in order to succeed. It inspired them when they set out to explore the world, discover laws of nature, establish a proper form of government, invent new products and methods of production, and build vast new businesses and brand new industries. It was the inspiration for the pioneering spirit and sense of self-reliance and self-responsibility which once pervaded American society at all levels of ability, and a leading manifestation of which is the spirit of great entrepreneurship.
Finally, the ability of economic science itself to influence people’s thinking so that they will favor capitalism and sound economic policy is also totally dependent on the influence of a pro reason philosophy. Economics is a science that seeks to explain the complexities of economic life through a process of abstraction and simplification. The method of economics is the construction of deliberately simplified cases, which highlight specific economic phenomena and make possible a conceptual analysis of their effects. For example, in analyzing the effects of improvements in machinery, an economist imagines a hypothetical case in which no change of any kind takes place in the world except the introduction of an improved machine. The truths established deductively in the analysis of such cases are then applied as principles to the real economic world. Consequently, the ability of economics to affect people’s attitudes depends on their willingness to follow and feel bound by the results of abstract reasoning. If economics is to have cultural influence, it is indispensable that people have full confidence in logic and reason as tools of cognition.
* * *
Not only are economic activity and economics as a science dependent on a pro reason philosophy in all the ways I have described, but also it should be realized that economics itself is a highly philosophical subject, potentially capable of exerting an extremely important pro reason influence on philosophy. As the subject that studies the production of wealth under a system of division of labor, economics deals both with essential aspects of man’s relationship to the physical world and with essential aspects of his relationship to other men. Indeed, the subject matter of economics can be understood as nothing less than the fundamental nature of human society and the ability of human beings living in society progressively to enlarge the benefits they derive from the physical world. For this is what one understands when one grasps the nature and ramifications of the division of labor and its effects on the ability to produce. In this capacity, economics overturns such irrationalist philosophical doctrines as the notion that one man’s gain is another man’s loss, and the consequent belief in the existence of an inherent conflict of interests among human beings. In their place, it sets the doctrine of continuous economic progress and the harmony of the rational self-interests of all human beings under capitalism, which doctrine it conclusively proves on the basis of economic law.
Excerpted from Chapter 1 of Capitalism: A Treatise on Economics, Volume I. Copyright 2020 George Reisman. All rights reserved. The encyclopedic Capitalism: A Treatise on Economics is a required reference for every Capitalist’s library. Reisman’s treatise is now available in two volumes: Volume I (focuses on microeconomic issues) and Volume II (focuses on macroeconomic issues).
The Paradox of Capitalism
Why is capitalism not appreciated?
This is the theme of Peter Foster’s new book: “Why we bite the invisible hand: The psychology of anti-capitalism.” I haven’t read it, but I did read a review by Robert Fulford in National Post. Fulford writes: “Free enterprise has enriched millions of lives, but that’s a hard fact to grasp.” He goes on to state: “Capitalism depends on genius, luck, inspiration and an acquisitive spirit. It’s unsystematic, chaotic, erratic and (as its enemies love to point out) unfair. It’s good because it works, not because it’s flawless.”
Besides his first sentence about free enterprise, Fulford’s characterization of capitalism is inaccurate and therefore worth examining here. No wonder people don’t grasp capitalism’s benefits when intellectuals and journalists don’t understand capitalism and misrepresent it.
Let’s consider Fulford’s characterization: “Capitalism depends on genius, luck, inspiration and an acquisitive spirit.” Despite having recognized free enterprise as central to capitalism, he fails to recognize what freedom means: the protection of individual rights. Without freedom, there is no capitalism. Ayn Rand defined capitalism as “a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”
In the mixed economy of today, individual rights are only partially recognized by governments (and compromised, for example, by evoking eminent domain in the name of “public interest”), and public ownership of property is common. In other words, the principle of individual rights is not upheld.
While it is true that productive geniuses like Steve Jobs and Bill Gates would do even better under capitalism, capitalism does not depend on genius. It does depend on reason: adhering to facts and logical thinking. Those who most consistently apply reason achieve the most – provided they are free to think and act on their thinking.
Capitalism does not depend on luck, or chance. Capitalism is not a casino, but a social system where businesses freely produce and trade goods and services. Those who adhere to reality and identify and grasp market opportunities, will create the most wealth. “Luck” favors those who are alert and prepared.
Fulford is right in that inspiration and motivation to produce are required to be successful under capitalism. What “an acquisitive spirit” entails is not clear, but I argue that it is productiveness and the desire to create wealth that capitalism encourages and depends on. Acquisition of things can only follow production.
Fulford continues: “[Capitalism is] unsystematic, chaotic, erratic and (as its enemies love to point out) unfair.” I’m not sure what he means by calling capitalism “unsystematic.” Perhaps as an opposite to “centrally planned”? Capitalism—free markets with private ownership of property and protection of individual rights—is very systematic in that it is governed by the law of supply and demand and the price system. There are no shortages or oversupply in capitalism beyond the short term it takes the markets to adjust. As for chaotic and erratic, these terms better describe centrally planned economies, where shortages of some goods and oversupply of others are constant.
The alleged “unfairness” of capitalism is unfounded. Fairness, or justice, means getting what one deserves. Capitalism is a system of fairness: you get what you deserve—but you have to earn what you get. People are rewarded according to their productivity. Those who produce the most, gain the most. But contrary to its critics’ claims, capitalism benefits also the less productive because more overall wealth is created and invested, which translates into more opportunities for all.
Finally, Fulford claims that “[Capitalism is] good because it works, not because it’s flawless.” Certainly capitalism works. We have enough evidence to show that the freer the markets (in contrast to government-directed economies), the more wealth—and innovative products and services at lower costs—is created. Think of the 19th century America and Hong Kong today as examples.
But capitalism is also flawless in that it is the social system best suited for human survival. Imagine where we could be in terms of innovations in medicine, health care, information technology, and other fields, if we had capitalism instead of welfare state where government violates individual rights and interferes in the economy.
Instead of inventing unsubstantiated “flaws” of capitalism, Robert Fulford and others confused about capitalism should educate themselves about it, for example by reading Ayn Rand’s “Capitalism: The unknown ideal”, and Yaron Brook and Don Watkins’ “Free market revolution.” Benefits of capitalism are not hard to grasp, but as with all knowledge, understanding them requires effort.
It is worth it—if happiness and prosperity are your goals.
This is an edited version of the original post on 3 May 2014.
Photo by Yasir Eryilmaz on Unsplash
Is it Time to Ditch the Word Capitalism ? Not so Fast !
Why do you always talk about capitalism and not the market economy? The mere mention of the word capitalism turns so many people off.”
It’s a critical question that I have often been asked. First of all: Yes, it’s true.
For many people, “capitalism” has a bad ring to it, probably all over the world. That is certainly the case in the 14 countries I commissioned Ipsos MORI to conduct a survey into attitudes toward capitalism. The survey proved that support for capitalism rises significantly everywhere if only you avoid mentioning the irritating word itself and frame your questions to describe what capitalism means using other words. This was no surprise; it was exactly what I expected. But what is much more interesting is that in nine out of the 14 surveyed countries, there was no majority in favor of capitalism even when the word was not used in the questions. In most countries, anti-capitalist views elicited more support than pro-capitalist opinions, even when we avoided using the word itself.
But wouldn’t it still be wiser to dispense with the word if it irritates so many people? The economist Deirdre McCloskey, whom I hold in high esteem, suggested years ago that the term “innovism” should be used as an alternative because it better describes what “capitalism” actually means. It has not caught on. It is difficult, almost impossible, to introduce a completely new term into the public discussion. After all, 99.99 percent of people don’t even know what such a new word means.
In some countries, people prefer to speak of a ‘market economy.’ In Germany, you often hear people refer to a ‘social market economy.’ However, the meaning of the term has evolved since it was originally popularized by Ludwig Erhard, the German Minister of Economics at the time (1949-1963). For Erhard, “social market economy” did not mean—as it is interpreted today—a third way between socialism and capitalism. The freer the economy, Erhard was convinced, the more social it would be. At the end of the 1940s, the formula of the ‘social market economy’ primarily served to make a return to the capitalist economic system palatable to Germans, which was by no means a foregone conclusion at the time. After all, the National Socialists had used strong anti-capitalist rhetoric, and ‘social’ aspects were already strongly emphasized in Germany at that time.
In contrast to its modern meaning, Erhard regarded the market economy as such as “social”—irrespective of subsequent redistribution efforts, of which he was skeptical. The more successful the economic policy, the more social policy in the traditional sense would become superfluous.
However, the term “social market economy” has long since been usurped by its opponents. Today, everyone in Germany is (apparently) in favor of the “social market economy.” Even representatives of the anti-capitalist far-left party Die Linke profess to be so. That is why I prefer to speak of capitalism, even if perhaps a term such as “entrepreneurial economy” would better capture the essence of what I mean by “capitalism.”
If a term has negative connotations, there is no point in focusing exclusively on changing the word. On the contrary. Those who avoid a word because they are afraid of criticism are only demonstrating their inner insecurity and weakness. And there is not the slightest reason to feel insecure or weak. Before capitalism came into being, most people in the world lived in extreme poverty – in 1820, the rate was 90 percent. Today, it has fallen below 10 percent. The remarkable thing is that in recent decades, the rate at which poverty is declining has accelerated more than in any previous period of human history. In 1981, the rate was still 42.7 percent; by 2000, it had fallen to 27.8 percent, and by 2021 it was below 10 percent. With such a track record, no supporter of capitalism should feel the need to be ashamed or hide.
Too often I have heard people “defend” capitalism by arguing, “Yes, capitalism is by no means ideal and has so many drawbacks, but the bottom line is that it is still better than other systems.”
Why so defensive?
I’ve had good experiences being offensive as a defender of capitalism. I speak at events all over the world on this topic, and I often wear my “I love Capitalism” T-shirt. Even if there are many young people in the audience who tend to be anti-capitalist, they usually respect the fact that there is someone there who professes his views clearly and doesn’t mince his words. And if the term provokes some people—so much the better: because then the discussion about the benefits of capitalism can start immediately!
This article was originally published on FEE.org. Read the original article.