Whereas truth is singular, falsehood is multiple. When we define something, specify a principle, or explicate a theory, we must strive to get things right and avoid getting them wrong. Black is not white (or other colors); nutrition is not poison (or anything non-nutritious); liberty is not tyranny (or anything illiberal); and the law of gravity is not supernatural (or illusory). There are many ways to get things wrong. To get things right – to validate our thoughts, to be correct – we must be intellectually curious, honest, and objective; we must learn the facts of reality and apply the laws of logic.
What is true of definitions, principles, and theories is true also of social systems, which are akin to habitats – the environments in which species try to live and flourish. Ant colonies and beehives may be social systems but are not created (or sustained) – as are human social systems – by the faculty of reason. Only one human habitat can be optimal for humans. Only one can be the best one. I have written previously that
To live best, [humans] must know what social system is best. Every living organism has an optimal habitat, a setting in which it best survives and thrives; an opposite or inhospitable habitat can prove harmful, even lethal, to a species (think: “fish out of water”). Humans are no exception to this general principle. Our specific nature decrees that we too have a preferred habitat. Aristotle distinguished man as both the rational and political animal; our best habitat allows the free exercise of our mind and inter-personal relations. Call it a habitat for humanity. Capitalism has proved to be the most hospitable habitat for humans. But what is capitalism, exactly? Why do so many humans, oddly enough, oppose it? Should it not win wide acclaim? Humans have free will and, equipped with reason, they can elect to achieve great things and scale great heights, surpassing all other species. But having no pre-programmed guide to good living they do not automatically choose what is best. Unlike other species, humans can choose to be self-destructive. Instead of being rational and cooperative with their own kind, they can enslave, rob, or destroy them.[1]
Capitalism is a social system based on the recognition of individual rights, including property rights, in which government’s sole purpose is to preserve and protect those rights, and its only proper functions are national defense, policing, and adjudication (law courts). Functions are confined to those that serve the sole purpose; functions beyond these three necessarily violate rights by compelling some to serve others.
Capitalism is a relatively new and radical social system, originating in the 18th century Enlightenment when the power of reason was most respected, individual rights were first identified, and men began to conceive of (and fight for) constitutionally constrained, representative government, throwing off authoritarianism. Being new, radical, and reasonable, capitalism could not easily withstand or survive the counter-Enlightenment, as spread by the likes of Rousseau, Kant, Fichte, Hegel, and Marx.
Few anti-capitalists would contest my definition of capitalism: that it’s a social system – that it institutionalizes rights (especially private property rights) – that it uniquely depends upon and embodies egoism, individualism, the profit motive, and the pursuit of happiness. What critics detest is any portrayal or defense of capitalism as good – as either a productive or moral social system. They view capitalism as either amoral or immoral, either an unethical but efficient wealth creator (the religious-conservative view)[2] or an evil, unjust system of exploitation prone to crises, “overproduction,” and depressions, which must eventually collapse (Marx’s view).[3] A derivative of the latter critique – cultural Marxism – insists that capitalism’s exploitation is systemic and ineradicable, that it extends beyond capital’s assault on labor to victimization within races, ethnicities, ages, genders, and a host of other supposedly antagonistic classes.
If capitalism’s meaning is not disputed, its critics must oppose its rationality, egoism, individualism, and inequality (the latter a by-product of human diversity).[4] To the extent capitalism protects rights to life, liberty, property, and the pursuit of happiness, critics also must oppose these values to some degree. Capitalism creates technology, prosperity, vitality, and longevity, so perhaps critics also reject these values. Such latent malevolence, verging on misanthropy, might seem unimaginable (especially to those who are benevolent), but what else can explain such hatred for capitalism?
A survey of history reveals six anti-capitalist social systems and four distinct ideologies which feed those systems. Of course, fights (even wars) will occur occasionally among anti-capitalists, but they remain united in their hatred of capitalism because they share anti-capitalist premises; each devoutly desires a “fundamental transformation” of capitalism, if not its termination. Remember, truth is singular, while falsehood is multiple. Only one human habitat can be optimal for humans. Only one can be the best one. These are superlatives. Capitalism, I argue, is precisely that highest of all social systems – the supreme habitat for humanity.[5] Alternatives may be classified as mere variants of inferior habitats or ideologies, although some are worse than others.
The ten varieties of anti-capitalism are anarchism, medievalism, nationalism, socialism, communism, fascism, populism, racism, environmentalism, and subjectivism. Below I summarize and assess each in turn.
Anarchism is a world without public governance; it lacks a key feature of any social system: a supreme political authority. If an anarchical setting has any private governance (personal, group), it is slight and precarious. Internecine conflict, violence, and gang warfare prevail because viable, enduring private governance depends on public governance and dissipates (or fails to form) in its absence. [6] A state is a geographically-delimited institution with a legal monopoly on the legitimate use of force (i.e., retaliatory force, against initiators). Absent a proper state, objective law cannot be properly derived or universally applied; there can be no advanced or sustained human betterment of the type capitalism fosters.
Anarchism is the rule of lawlessness and arbitrariness. Not surprisingly, few cases of it exist and none have exhibited a viable or sustainable habitat for humanity. Most anarchists are virulently anti-capitalist and tend to conspire with socialists. An apparent opposite type, “anarcho-capitalism,” is logically impossible; no cases of it exist. Its disciples believe no state can be compelled to behave (protect rights), that all states are unavoidably statist or in time must become so.[7] On the contrary, objectivity is possible, which objective public governance possible too. The adoption and spread of constitutional governance in Britain, America, and elsewhere confirms the point.
Medievalism is a social system dominated by strict adherence to religious dogma. Being other-worldly, it is hostile to all things secular, modern, and progressive. Being faith-based, it is suspicious of the five senses, of reason, and of science. Politically it is theocratic, autocratic, and illiberal. It is thoroughly contra-capitalism. Although medievalism preceded the 18th century Enlightenment (hence capitalism) it may be classified a foe of capitalism to the extent its long reign (from the 5th to 15th century) perpetuated feudalism and precluded capitalism’s emergence. Of course, aspects of medievalism persist even today, in forms more (Islamic) or less (Christian, Judaic) severe (hence more or less anti-capitalist). Faiths that tolerate capitalism do so not because they condone its morality (egoism) but because they want its philanthropy.
Nationalism’s root is nation – which is distinct from a state (a political entity) – being a large population living in a specific territory and sharing a common ancestry, ethnicity, race, language, or culture. Some state may overlap with a nation if its citizens are homogenous in the way a nation is, but others can govern a heterogeneous population. The danger of nationalism isn’t the presence of a nation but of a premise that the nation supersedes the individual in value, priority, and sovereignty, that if necessary the individual must serve and sacrifice for the alleged greater good of the nation. Being tribalistic, the nationalist is anti-individualist, hence anti-capitalist. Nationalists are also prone to provincialism and distrust of other nations (or a belief they’re inferior). Eschewing internationalism (“globalism”) and free trade, they adopt mercantilist-protectionist measures that further violate crucial capitalist precepts.
Socialism is a collectivist social system characterized by public ownership and control of the means of production. If the collective is small, ownership and control can be exercised voluntarily by a commune or cooperative (“utopian” socialism); if the collective is large, the locus of power ineluctably resides in a despotic state willing and able to sacrifice individuals or sub-groups for the benefit of the despots and their cronies. Socialism predates capitalism by over two thousand years. In ancient Greece Plato depicted a socialist society in his Republic (360 B.C.). The Ptolemaic dynasty ruled ancient Egypt as a socialist state from 305 B.C. to 30 B.C. Thomas More in 16th-century England used Plato’s ideal for his Utopia, an imaginary socialist island.
Socialism is thoroughly anti-capitalist, being anti-individualist, anti-liberty, anti-property, and anti-profit. In its most consistent applications – the U.S.S.R. under Lenin, Stalin, and Krushchev, Communist China under Mao, North Korea under the Kims, Cuba under the Castros, Cambodia under Pol Pot, and Venezuela under Chavez and Maduro – it has impoverished and murdered more than 100 million people since 1917.[8] In other important cases, nations have adopted “partial” socialism by vote (“democratic socialism,” as in Britain, India, and Germany in the decades after World War II), while others have “modified” socialism with religion (“Christian socialism”). Yet all socialist regimes must violate individual rights to a greater or lesser extent. Socialism being so inhumane, one may wonder how it could possibly attain wide support and come to rule so many millions of people for so long. Ayn Rand explains:
Socialism is not a movement of the people. It is a movement of the intellectuals, originated, led and controlled by the intellectuals, carried by them out of their stuffy ivory towers into those bloody fields of practice where they unite with their allies and executors: the thugs. The socialists had a certain kind of logic on their side: if the collective sacrifice of all to all is the moral ideal, then they wanted to establish this ideal in practice, here and on this earth. The arguments that socialism would not and could not work, did not stop them: neither has altruism [sacrifice of oneself and of others to oneself] ever worked, but this has not caused men to stop and question it. Only reason can ask such questions—and reason, they were told on all sides, has nothing to do with morality, morality lies outside the realm of reason, no rational morality can ever be defined. The fallacies and contradictions in the economic theories of socialism were exposed and refuted time and time again, in the 19th century as well as today. This did not and does not stop anyone: it is not an issue of economics, but of morality. The intellectuals and the so-called idealists were determined to make socialism work. How? By that magic means of all irrationalists: somehow.[9]
In short, ideas have consequences, for good or ill. Intellectuals comprising a mere fraction of a citizenry specialize in creating, teaching, and spreading ideas. They exert disproportionate influence on all dimensions of society (political, economic, and cultural). A majority can be confused or disturbed about this yet impotent to change it. Nor can bad ideas be refuted or avoided by a descent into anti-intellectualism.
Communism is defined in the Oxford English Dictionary as “a theory that advocates the abolition of private ownership, all property being vested in the community, and the organization of labor for the common benefit of all members,” and any social system “in which this theory is put into practice.”[10] That’s close to its definition of socialism: “a system of social organization based on state or collective ownership and regulation of the means of production, distribution, and exchange for the common benefit of all members of society.” But the communists’ focus on abolishing private property (as they put it, “by any means necessary”) and on destruction for its own sake (not to “benefit society”) is apt. In the Communist Manifesto (1848)[11] Marx and Engels decry the “unconscionable freedom” of “egotistical” capitalism and extoll a “radical rupture of traditional property relations” to “raise the proletariat to the position of ruling class,” with sufficient “political supremacy” to “wrest, by degree, all capital from the bourgeoisie.” This requires “despotic inroads on the rights of property.” To dissenting property owners they declare that “you reproach us with intending to do away with your property. Precisely so, that is just what we intend.” Communism’s proposed grand larceny is “unavoidable” and must be achieved “by means of measures which appear economically insufficient and untenable.” Capitalism is not merely economically “tenable” but stupendously prolific, as Marx and Engels concede in the same manifesto, but here they admit that communism is economically “untenable.” Ayn Rand explains to root causes of the communists’ overt intention to destroy:
The Communists’ chief purpose is to destroy every form of independence—independent work, independent action, independent property, independent thought, an independent mind, or an independent man. Conformity, alikeness, servility, submission and obedience are necessary to establish a Communist slave-state. It is the Communists’ intention to make people think that personal success is somehow achieved at the expense of others and that every successful man has hurt somebody by becoming successful. It is the Communists’ aim to discourage all personal effort and to drive men into a hopeless, dispirited, gray herd of robots who have lost all personal ambition, who are easy to rule, willing to obey and willing to exist in selfless servitude to the State. [12]
The Marxist-communist principle of wealth distribution accentuates the system’s latent injustice – which fuels its destructiveness. Under communism wealth is to enter some collective repository “from each according to his abilities” and is to be paid out “to each according to his needs.”[13] Remuneration must no longer reflect the marginal productivity of the various factors of production (land, labor, capital), as under capitalism; neediness instead of ability is to be rewarded, ensuring that sloth and faux needs expand while ability and industriousness shrink. No wonder then that in actual cases of communism it is not the state but humanity that “dies out.”[14] It’s murderous, not accidental, as logic dictates for any type of avowedly destructive social system.[15]
Fascism is both a collectivist and nationalist social system characterized by private ownership but public (state) control of the means of production, for the benefit of the state. Private titles to property are merely nominal; owners must produce what the state requires, hire, fire, and compensate those the state commands, and trade as the state decrees. Larger firms are promoted at the expense of smaller ones because they are more easily and directly controlled. Fascism is not a “version” of capitalism; it originated in Italy as an explicit rejection of capitalism.[16] In Weimar Germany (1930s) nationalism and socialism were combined to generate national socialism, under the sociopath Hitler. The lethal synthesis was initially welcomed by German citizens, who repeatedly voted most for the “National Socialist German Workers’ Party” (Nazis).[17]
By now it should be clear that the main rivals to capitalism’s individualism share a deep allegiance to collectivism. It is transparently in their names. Etymologically, “social” and “society” are embodied in socialism, while “commune” and “community” are the root of communism. The root of fascism is the Italian word fascismo, derived from fascio, which is a bundle of rods tightly bound together (from fasces, Latin for “bundle” or “group”). Acolytes of these systems insist that it is obligatory, dutiful, and “moral” for individuals to sacrifice for the benefit of those who rule the collective. Individual rights are dispensable. The etymological roots of “capitalism” are capital, capita, the head, which is apt because it’s the social system of reason, that which protects and rewards the rational animal and provides a true habitat for humanity.[18]
Four other influential and lethal sources of anti-capitalism are worth summarizing; they are not social systems per se but irrational premises or ideologies which fuel anti-capitalist systems: populism, racism, environmentalism, and subjectivism.
Populism is an approach to social choice and politics that looks for guidance to “the people,” to whatever is popular, to the majority opinion (of the moment), regardless of whether it’s true or false, virtuous or vicious. Populism prioritizes the supposed “wisdom of crowds;” it assumes truth resides in the “horse sense” or “street smarts” of the “common man.” It assumes rectitude in the multitude.[19] It thereby distrusts and dismisses uncommon, extraordinary men and mavericks, plus those who are learned, credentialed, experienced, and expert – today’s much maligned “establishment elites.”
Populism is an unprincipled, fickle, and dangerous approach to politics; being prone to emotionalism, groupthink, peer pressure, second handedness, and the madness of crowds, it is easily exploited by illiberal, power-lusting demagogues and would-be despots who appeal to popular prejudices.[20] Unlike medievalists who believe dogmatically in vox dei (the voice of God), populists believe dogmatically in vox populi (the voice of the people). Even in a post-medieval world, true believers in democracy (rule by the demos, or people) equate the voice of the people with that of God (vox populi, vox dei). But each is a faith, not a fount of wisdom, and faith-based politics is rarely humane. Capitalism relies instead on vox intelligentia (the voice of reason).
Racism is yet another but cruder form of collectivism, a tribalist, anti-capitalist approach to social relations. The racist is unwilling to see others as individuals, to rationally judge those traits over which individuals have choice: their character, ideas, interests, and actions. Instead of discriminating among people based on such abstract and relevant factors, the racist discriminates based on concrete, irrelevant factors. He obsesses about skin color, ancestry, or physiology – precisely the traits over which people have no control. The racist adjudges others as good or evil, or as superior or inferior, based on immutable traits and the clan to which he consigns them. He refuses to be colorblind and so utterly doubts its possibility as a virtue that upon seeing others practice it he projects his own bias and calls them “racists.” Capitalism, the system of rationality and individualism, utterly rejects (and penalizes) racism.[21]
Environmentalism, at least in its least dubious form, espouses principles and policies to ensure that current and future generations enjoy convenient, affordable access to breathable air, potable water, and a sustainable planet. This characterization is common (and popular), but much evidence exists to doubt its veracity and thus the sincerity of its espousers. For it is capitalism, not its inferior rivals, which routinely and cheaply provides clean air, clean water, ever-greater hygiene, technological advances, and resource development to increasing millions. Only capitalism’s unique institutions and incentives – private property, the price system, and profit-making – can optimize human thriving and help avoid the wasteful, impoverishing “tragedy of the commons” that’s so common wherever resources are held in common.
Despite capitalism’s productiveness and humanness, most environmentalists are anti-capitalists. Perhaps they sympathize with the anti-humanism expressed in “deep environmentalism,” which conceives of nature as any or all things other than the human, dislikes man-made things, and insists that non-human nature possesses “intrinsic” (or “existence”) value. Implausibly, such value is presumed to exist apart from the existence of actual, valuing humans. “Deep” environmentalists require that humans not touch, “spoil,” or exploit nature, else they’ll contaminate and dissipate the world’s only (and static) pool of “real” value. Like the medievalist, the deep environmentalist issues unreliable (because faith-based) forecasts of “the end of the world as we know it” and desires either an idyllic, pastoral, labor-free world (some mystical or scriptural garden of bliss) or an ascetic, minimally-populated world of self-abnegating monks. The deep environmentalist denies (or dislikes) the fact that we survive and thrive only by actively transforming and reshaping the elements to create an ever-more expansive and hospitable human habitat. Environmentalists invariably prove to be anti-capitalists precisely to the extent they are anti-humanists.
Subjectivism is the notion that humans qua subjects can hope, wish, or pray for things to be true and it will be so. It is a denial of our need to be objective, to focus on reality as it is, to consult the evidence of our five senses (our only access to reality), to use the laws of logic and avoid fallacies, to establish truths and avoid myths. Social subjectivism, a close cousin to populism, holds that majority (or “consensus”) opinion must be true, or the best gauge of it. If most people (or a majority in a sub-group) says the Earth is flat, or slavery is moral, or environmentalism is humane, then it is so. Dissenters are “deniers,” to be muzzled. Yet subjectivism also permits no fixed truths, no permanent principles, and its companion errors – epistemological skepticism (“nothing can be certain”) and moral relativism (right and wrong are “contingent”) – only further erode capitalism’s foundations. Until the intellectuals comprehend, defend, and apply objectivity, capitalism will remain undefended and face extinction.
Despite capitalism’s great success over a relatively brief history, it has suffered many foes while enjoying few friends.[22] This may seem paradoxical until you realize that capitalism is much more than an economic system. It is a social system unique not only in its economics but in its philosophy, psychology, politics, and culture. Foundationally, it counts on reason, objectivity, egoism, individualism, and constitutionalism. The more these values are defended in the future, the greater capitalism’s future can be. It only requires humans to be truly human – i.e., rational.
References:
[1] Richard M. Salsman, “Supposed ‘Varieties’ of Capitalism,” Capitalism Magazine, June 21, 2020.
[2] Richard M. Salsman, “Why Conservatives Won’t Defend Capitalism,” Capitalism Magazine, May 12, 2019.
[3] Richard M. Salsman, “Anti-Socialism Isn’t (Necessarily) Pro-Capitalism,” American Institute for Economic Research, February 14, 2019.
[4] Richard M. Salsman, “We Should Celebrate Diversity in Wealth Too,” American Institute for Economic Research, December 26, 2018.
[5] See also Ayn Rand, Capitalism: The Unknown Ideal (New American Library, 1967) and George Reisman, Capitalism: A Treatise on Economics (Jameson, 1996).
[6] See Richard M. Salsman “Tripartite Governance: A Guidepost for Proper Policymaking,” American Institute for Economic Research, April 14, 2020 and David Kelley, “The Necessity of Government,” The Freeman, April 1, 1974.
[7] In 1788, as the U.S. Constitution was being ratified and government was being limited, Thomas Jefferson wrote from Paris that “the natural progress of things is for liberty to yield and government to gain ground.” He also condoned perpetual revolution, the periodic replacement of constitutions, and reneging on public debts every generation or so. His rival, Alexander Hamilton had more confidence in the possibility and longevity of constitutionally limited government, if it was not eroded by Jeffersonian populism and democracy. America and Britain in the 19th century were two formidable cases of liberty gaining ground and unjust government yielding (e.g., on slavery and protectionism).
[8] R. J. Rummel, Death by Government (Transaction Publishers, 1994).
[9] Ayn Rand, “The Monument Builders,” in The Virtue of Selfishness: A New Concept of Egoism (New American Library, 1964).
[10] Oxford English Dictionary (2019).
[11] Frederick Engels and Karl Marx, Manifesto of the Communist Party (1848).
[12] Ayn Rand, “Screen Guide for Americans,” Plain Talk 2(2), November 1947, pp. 37-42.
[13] Karl Marx, Critique of the Gotha Program (1875).
[14] Frederick Engels: “State interference in social relations becomes, in one domain after another, superfluous and then dies out of itself . . . The State is not ‘abolished.’ It dies out.” (Socialism, Utopian and Scientific, 1880).
[15] Stéphane Courtois et al, The Black Book of Communism: Crimes, Terror, Repression (Harvard University Press, 1999).
[16] See Giovanni Gentile, Origins and Doctrine of Fascism (1927; Transaction Publishers, 2007); Benito Mussolini, “The Doctrine of Fascism” (co-written with Giovanni Gentile, 1932); and Robert O. Paxton, The Anatomy of Fascism (Alfred A. Knopf, 2004).
[17] See Leonard Peikoff, The Cause of Hitler’s Germany (Penguin, 2014).
[18] Richard M. Salsman “The Mind-Based Etymology of ‘Capitalism,’” The Objective Standard 13(4), Winter 2018, pp. 30-36.
[19] The clever phrase is from Michael Munger, Choosing in Groups (Cambridge University Press, 2015).
[20] See Randall G. Holcombe, From Liberty to Democracy: The Transformation of American Government (University of Michigan Press, 2002) and Edgar K. Browning, Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit (Prager, 2008).
[21] See Ayn Rand, “Racism,” in The Virtue of Selfishness: A New Concept of Egoism (New American Library, 1964) and George Reisman, “Capitalism: The Cure for Racism” (TJS Publishers, 1992).
[22] In my judgment capitalism’s ten most formidable intellectual friends include (chronologically), John Locke, Alexander Hamilton, Jean-Baptiste Say, Carl Menger, Eugen Bohm-Bawerk, Ludwig von Mises, Henry Hazlitt, Friedrich Hayek, Milton Friedman, and Ayn Rand.