Posted by
kirkthompson on Sunday, March 23, 2008 9:06:28 PM
At a recent Rotary Club meeting, my particular brand of economic philosophy, that of capitalism, was characterized as "not caring about people."
The program delivered on that day was by an economics professor who, during the Q&A period, took a question about recessions and depressions. I made the comment that, economically, a recession is not necessarily a bad thing. Sometimes a recession is just a cleansing of bad investments in a market. One response from the speaker was that he considered recessions always to be bad because he cared about people. By that statement, the implication is that capitalists don't care about people. As capitalism is only system that allows people to be free, it is the only system for those who actually do care about people.
Every other economic or political system in history has denied individual rights. For all practical purposes, whether it's imperialism, monarchism, socialism, or fascism, every other system has had the same essential characteristic—the denial of individual rights. Honestly, how is socialism fundamentally different than monarchism or fascism? Sure, we can discuss a number of superficial and technical differences of implementation and structure. But at the end of the day, such systems are the same. Individual rights are denied. Does it really matter if they are denied by a king, a dictator or a politburo as in the Soviet Union?
Capitalism, alone, recognizes the individual to be sovereign. For the individual to be sovereign certain rights must be recognized. These rights are outlined in both John Locke's Two Treatise on Government and in our Declaration of Independence; the rights to life, liberty and private property.
The right to private property is crucial to the other two rights. Without private property, then the state essentially owns all property. Theoretically, in socialism, the means of production are owned by the workers. This concept fails miserably on so many levels. Do the workers really own the means of production? Well, I ask you to join me in a thought experiment.
Ownership implies control. If you own a car, you can sell it. You can paint it a different color if you choose. In socialism, do the workers truly control the means of production? Absolutely not.
In socialism, the means of production and all other property must be owned by the state. There has to be someone or some organization that decides when to begin and end the operation of the means of production, when maintenance is scheduled, and when replacements are needed. Do the workers decide that? No, there is a state agent that makes those decisions, because the state owns and controls that property.
When we look at history, we see a vast wasteland of social systems that have oppressed many at the whim of a few. Then we see capitalism, which allows each and every one of us to live life as we see fit as long we do not infringe upon the individual rights of another. That last part is an essential aspect of capitalism.
We hear terms like "unbridled capitalism" to describe a system in which the powerful run roughshod over the rights of the weak. By definition, that is not capitalism. The very moment an individual's actions begin to infringe on another individual's rights, those actions cease to be capitalistic. Without exception, capitalism is a system that recognizes every individual's rights, not just the powerful. If a business uses regulations and legislation to infringe on a landowner's property rights, that is not capitalism.
There are a multitude of myths associated with capitalism. One is that capitalism packed factories with children, and that children had to be rescued from capitalists by the government and child labor laws.
There's only one problem with that idea—child labor existed for thousands of years prior to the emergence of the market economy. As slaves, little Jewish children built cities, erected monuments, constructed roads for Egyptian pharaohs long before Adam Smith published Wealth of Nations.
Child labor and slavery are institutions of the state, not of the market. It is capitalism that increased the standard of living so that families could afford for only parents to work. Look around the world at nations that still use child labor. Do those nations have a higher degree of capitalism or socialism?
Only in economics can we have a theory that has failed as spectacularly as socialism and claim that it's not the system but its people. If only people were a little nicer then socialism would be a functioning system. I reject that notion. The system is flawed, badly. In other sciences, when theories fail, the theories are thrown in the trash. In economics, people are blamed.
Also, only in economics can we condemn a system that has provided as much freedom, prosperity, and innovation as capitalism has. After the 20th Century during which we had the great Civil War between Western powers—with the U.S and capitalism having squared off against the Soviet Union and socialism-—I am still surprised at the reluctance of some to embrace capitalism and condemn socialism.
Capitalists want to live in a society where no one has the power to oppress one person for the sake of another, no matter the reason. Isn't the desire for freedom for all people the true test of caring for others? What is a better demonstration of love of humanity than wanting all of humanity to be free from oppression?