The Tree of Liberty: Why Defend Capitalism?

The Tree of Liberty

My column this quarter will be focusing on political issues from a laissez-faire capitalist perspective. However, rather than offering a full philosophic defense or discussing abstract technical issues, I will primarily be exploring what a pro-capitalist perspective looks like when it is applied to concrete cases and attempting to elucidate why I think capitalism is good.

In light of the fact that capitalism is often misunderstood or misrepresented as a political system, I think it is helpful to begin by asking the question: “What is capitalism?”

People often associate capitalism with economic freedom, such as a market with few regulations, the absence of subsidized industries and free trade between countries. On an individual level, people often identify capitalism with entrepreneurship or businesses primarily oriented towards maximizing profit. These are indeed aspects of capitalism, but none of these identify the essential characteristic of capitalism in its purest form.

When I write about capitalism, I am writing about pure laissez-faire capitalism — the political/economic system that is based on individual rights — and upholds them as absolute and inviolable. In this system, the government’s only purpose is to protect these rights and arbitrate conflicts with objective laws. Today, we do not have a true capitalist system –– instead, we have a mixed system, with many government controls, subsidies and wealth redistribution; for instance, minimum wage laws, subsidies in agriculture or entities such as the FDA or the EPA.

The United States was very close to achieving laissez-faire capitalism in the 1800s (with some unfortunate flaws), especially in the North where slavery was scarce. As a result, the Industrial Revolution flourished and humans were able to freely pursue wealth and knowledge and improve their standard of living.

During that period, people were not granted many of the “rights” that people now explicitly or implicitly claim to have, such as the right to healthcare, a job, or a minimum wage –– all of which can only be provided by the effort of other humans.

What they did have, and what the Founding Fathers identified, were the rights to life, liberty and the pursuit of happiness. These rights are not guarantees of property or livelihood; rather, they identify the freedom to act and think that is necessary in a social context.

Ayn Rand, the novelist-philosopher who was a champion of laissez-faire capitalism, once wrote, “Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others.”

It is clear that our rights are violated when we are robbed by thieves or kidnapped. But when the government intervenes in economic activity, whether it is via regulations or wealth redistribution, it is also initiating force against its citizens and to that extent violates their rights.

The principle of individual rights and the restriction of government to doing nothing but protecting them (via retaliatory force) is what allowed the United States to develop into a moral and productive society, a sharp contrast from the monarchies of Europe and the empires of Asia.

In a free society, then, we can receive the greatest benefit from the productive and rational behavior of others –– consider the thousands of jobs and the increase in standard of living made possible by humans like Andrew Carnegie, Henry Ford or Bill Gates.

Why has capitalism, despite its greatness, so often been disparaged and condemned as evil?

This is because capitalism was never given a proper moral defense. If pursuing one’s rational self-interest and profit is considered wrong, capitalism cannot be vindicated. Ayn Rand identified a system of morality based on rational selfishness that provides this defense.

So long as this moral issue is not grasped, the enemies of capitalism will be successful. This is the trend that has dominated the politics of the United States since the latter half of the 20th century. Our political system today is dominated by a plethora of regulations on economic activity, improper government institutions and wealth redistribution –– all of which violate our rights in their attempt to eradicate the “evils” of capitalism.

The only possible result of this trend, if it continues, is the eradication of our liberty.

The only solution is laissez-faire capitalism.

TRISTAN de LIÈGE is a fourth-year undergraduate philosophy and political science major. He can be reached at tflenaerts@ucdavis.edu.

4 Comments

  • mertinburl
    February 1, 2013

    This article should be retitled “The tree of slavery: why not to defend capitalism?”

  • mertinburl
    January 21, 2013

    And look at Mr.Hayek over here: it will lead to the eradication of our liberties. Ronald Reagan saying the TVA would eliminate our freedoms ring a bell? Or him saying that Medicare would eliminate our liberties too? You need to research more because your logic is flawed man.

  • mertinburl
    January 21, 2013

    Well, you’ve done it. You quoted Ayn Rand. If we have learned anything from recent years is that Ayn Rand is not the person you quote if you want to be taken seriously. She is the person you quote if you want people to think you’re some teenage boy stuck in some fantasy of a free-market, capitalist utopia. And you are attending a public university established by a state government with a land grant from the federal government and is currently funded by millions and billions of public dollars. So you sir are a grossly sheltered person. And don’t give me that bullshit about those funds actually originate from the private sector because many of the productive tools private industry all began as government inventions. Oh, and not to mention the federal reserve, federal deposit insurance, and all the other types of subsidies private corporations bask in to stay afloat. Oh, and the U.S. doesn’t guarantee healthcare, a job or a minimum wage. Even with the affordable care act millions of people will remain uninsured and unaffordable for countless others. If the government did guarantee jobs then why didn’t it enact a WPA style program after the great recession of 2008-9? Because it’s not considered a serious proposal by the elite right now to the unemployment crisis which we still suffer and will suffer for years to come. Just look at the unemployment statistics: we haven’t had a good year for working people since 2001 and before that it was like the early 1990s. So if the government really did guarantee jobs then why isn’t the unemployment at or below the full-employment rate of about 4.5.%? And Europe is actually quite capitalist too because it doesn’t guarantee everybody jobs; and that’s mainly because those governments are controlled by people who believe the market will fix everything. But contrast the austerity approach of Europe that says cuts in government spending will restore confidence in the markets and that will restore growth, with the stimulus package of the U.S. in 2009-10. We continued to grow, and faster too, than the European economies while their economies shrunk–and in the case of some of those countries, continue to shrink. So Capitalism isn’t that great. And the Europe-U.S. example provides the biggest debunking of your proposed argument that “free societies” will deliver what people need because when we spent more here and did many things through government we saw that individual initiative is only productive when there’s a large infrastructure and rule of law to support the development of innovations and growth. And the minimum wage being a guarantee? Honestly, that’s a grossly ignorant statement: for the minimum wage to catch up with inflation it should currently be at like $11, but it’s currently at $7.25 for the federal side while not much higher in most states. The U.S. during the late 1800s was actually close to achieving a crony-capitalist economy similar to the one in China right now. And no, China is not or has not ever been communist? Also, it wasn’t until the 1940s and 1950s that people could pursue knowledge and contribute to society because before that goods necessary were considered private, rather than public goods, and were available only to the very wealthy.

    By the way, you can eat your barf–. Sorry I mean laissez-faire capitalism because the thing that has pulled people out of ignorance and poverty is social democracy. No, the solution is not the bullshit that causes financial crises and mass suffering. It’s a dramatically larger state that can provide the supports that will provide for each to pursue their interests, and that is a larger welfare state. These things are: single-payer, paid maternity and paternity leave, paid sick leave, paid vacations, free college all the way to a doctorate, establishment of a postal savings bank, a 15% wealth tax, establishment of local fiber networks and phone and cable too, a sharply graduated income tax, an infrastructure bank, an augmented social security system, high-speed rail, large investments in renewable energy, and many more good things.

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