A BBC website forum asked the question “Is Capitalism Under Threat?”. Here is CM’s answer.
To answer “Is capitalism under threat?” one must first know what capitalism is. Granted that George Soros has made billions buying and selling currencies, he has never given any indication that he understands what capitalism is.
Capitalism is the social system based on the protection of individual rights, including property rights, where all property is privately owned. The opposite is statism (e.g., communism, fascism) where the individual is the property of the state — to be sacrificed as the state’s leaders decree.
Capitalism involves a complete separation of government and the economy, including private money issued by private banks. The sole functions of government under capitalism are the police, the military and the law courts — to protect people against those who initiate force (including theft and fraud). Otherwise, the government leaves people free to produce, associate and trade on a voluntary basis.
While corruption can exist under capitalism, the perpetrators, once exposed, get quickly punished for it. Only governments — statist governments — have the power to sustain corruption and create a major economic disaster by inflating currencies, or funding projects that private investors would normally avoid, or re-distributing wealth from the productive to the non-productive. What we have today are individual countries with varying mixtures of capitalism and statism, but not pure capitalism. (Just as a mixture of nutritious food and poison is no longer nutritious food — a mixture of capitalism and statism is no longer capitalism. The country with the highest degree of capitalism today is the U.S., which is why it is the wealthiest and considered the safest haven of money in times of economic crises.)
The root cause of the Asian (and Russian) crisis is the statist policies of Asian countries, which are exacerbated by the IMF — a socialist institution that bleeds wealth from the productive countries to the non-productive countries.
It’s not so much that capitalism is under threat — it’s that we individuals are under threat to the extent we don’t have capitalism. And we won’t have it as long as George Soros and modern intellectuals obscure its meaning and blame it for the problems caused by statism. Thankfully, we have the writings of Ayn Rand (Atlas Shrugged, Capitalism: The Unknown Ideal) — the world’s greatest champion of capitalism — and so capitalism’s meaning won’t be obscured for long.