The One Minute Case For Capitalism

Capitalism a social system based on the principle of individual rights.

A capitalist society is based on the recognition of individual rights, including property rights. Under capitalism, all property is privately owned, and the state is separated from economics just as it is from religion. Economically, capitalism is a system of laissez-faire, or free markets, where the government plays no part whatsoever in economic decisions.

Capitalism is the only social system compatible with the requirements of man’s life

To pursue the values necessary for his life a society, man requires only one thing from others: freedom of action. Freedom means the ability to act however one pleases as long as one does not infringe on the same and equal freedom of others.   In a political context, freedom means solely the freedom from the initiation of force by other men. Only by the initiation of force can man’s rights be violated. Whether it is by a theft, force, fraud, or government censorship, man’s rights can be violated only by the initiation of force. Because man’s life depends on the use of reason to achieve the values necessary for his life, the initiation of force renders his mind useless as a means of survival. To live, man must achieve the values necessary to sustain his live. To achieve values, man must be free to think and to act on his judgment. To live, man must be free to think. To be free to think, man must be free to act. In the words of Ayn Rand, “Intellectual freedom cannot exist without political freedom; political freedom cannot exist without economic freedom; a free mind and a free market are corollaries.”

Capitalism recognizes the inherent worth of the individual

In a human society – one that recognizes the independence of each man’s mind – each individual is an end in himself.  He owns his life, and no one else’s.  Other men are not his slaves, and he is not theirs.  They have no claim on his life or on the values he creates to maintain his life, and he has no claim on theirs.  In a free society, men can gain immense values from each other by voluntarily trading the values they create to mutual gain.  However, they can only create values if they are free to use their minds to exercise their creativity.  A man is better living off on his own than as a slave to his brothers.  Capitalism recognizes each man as an independent, thinking being.

The individual is an end in himself

Just as no individual has the right to initiate force against anyone, neither does any group of men, in any private or public capacity. It is immoral to initiate force against any individual for any reason. This includes the initiation of force for “the public good.” The “public” is merely a collection of individuals, each possessing the same rights, and each being an end in himself. Any attempt to benefit the “public good” is an immoral attempt to provide a benefit to one group of individuals at the expense of another. In a free society, no individual benefits at the expense of another: men exchange the values they create in voluntary trade to mutual gain. The rule of law in a free society has just one purpose: to protect the rights of the individual.

Capitalism leads to freedom and prosperity

A free, capitalist economy has never existed anywhere in the world. The closest the world came to a free market was during the Industrial Revolution in Great Britain and during the late 19th century in the United States. The Industrial Revolution was a period of unprecedented economic growth and unimaginable improvements in quality of life. In less than two hundred years, the life of most people in the Western world changed from a a short life filled with poverty, plague, and near-constant war to a modern, comfortable existence that  even the kings of medieval Europe couldn’t have imagined.  Since 1820, the leading capitalist nations have increased their wealth sixteen fold, their populations more than four-fold, their productivity twenty-fold.  Annual working hours went from 3,000 to less than 1,700 and life expectancy doubled from thirty to over seventy years. 1

Yet despite the undeniable material superiority of capitalist societies, its critics continue to attack it as inhuman and selfish.  What the world lacks is not evidence of capitalism’s practical superiority, but a moral defense of a man’s right to his own life.

Reference

  1. Angus Maddison. Phases of Capitalist Development, p4 (1982)

Further Reading

75 Comments

Filed under Economics, Politics

75 Responses to The One Minute Case For Capitalism

  1. Marc

    @Arnold T
    What are you talking about? No one is calling for utopia! We always conceed that man’s insitutions will be imperfect, since man is imperfect, we are not saying that private actors are perfect, we are saying that they are far better than the alternative. The question is wich of the two is better? the private sector of the public one? mplexity of the world cannot be wished away. The great depression was caused by Hoover’s interventionism and protectionism, and then prolonged by FDR’s new deal. Modern history is basically the private sector creating whealt and jobs, and the government wrecking everything. The crisis was entirely caused by the government, you people blame deregulations, but if you look at the federal registers, wich contains all the regulations in the economy, the number of page grew faster under W Bush than it did under the 5 previous administrations as you can see there: http://www.youtube.com/watch?v=i06peJfgUqI . the housing crisis was caused by the federal government forcing banks to give out loans based on ethnicity, age, sex, income and not credit history. The banks were forced to engage in affirmative action in lending.

    • Arnold T

      Jeez, you are the exact type of person I am talking about. Your belief system in pursuing pure Capitalism borders on insane.

      You have rewritten history with your fabricated blaming of the Great Depression on not following your extremist Capitalistic system.

      You just outlined how extreme you are and how Utopian you view the world of economics.

      You sir, are a ‘Utopian Fool’.

  2. Michael Groves

    It’s a pity you are descending to insults in a rational discussion.

    However, what is it you don’t understand? The gov’t instructed Freddie & Fannie to make loans to uncreditworthy borrowers *and* people know that the gov’t will bail out failing banks. These two things were the major reason why caution gave way to greed.

    Investors are rewarded when they take risks that succed, and should be punished (by absorbing their own losses) when they fail. You’ll always get a spectrum of investors, ranging from the extremely conservative to the wildly speculative. I’d do a lot more due diligence before I invested my money in a bunch of securitized loans, if there were no Fed to underwrite my mistakes.And if I didn’t do the due diligence, and lost my money, so what? It’s on my own head. That’s the essence of Capitalism – freedom of choice, and then bearing the consequences, good or bad.

    Actually regulation *is* hugely important in Capitalism, but only in making sure that there is transparency and honesty in reporting, for example. (Companies should not misrepresent their performance or balance sheets to investors, for example).

    Regulation should not restrict economic activity, or mandate what kind of investments are allowed – who better to decide how (and with whom) money gets invested, than the guy who earned it in the first place?

    Wall Street does not “gamble” – they have created the greatest amount of wealth in history simply by allocating capital to the most successful companies, and starving the failures out. In the process, many investors have lost money due to misjudgments, recklessness and bad luck, but the invisible hand inevitably ensures that the wins exceed the losses over time. That’s the system.

  3. Arnold T

    What suckers for the Right-Wing propaganda. There is no limit to what the Free Market Idolaters will believe. Blaming government for everything is such a childish and manipulative gimmick.

    The idea that Wall Street is blameless is just beyond bad judgment in light of the facts. People like Groves and Ben are what is wrong with America. These types of people, working in concert, destroyed our economy.

    The death of Laizzez Faire Capitalism is at hand. Just like in the 1930′s, the free market extremists will eventually be put down and a new economy based on practical judgments will rise to take its place.

    • Arnold T is a Moron

      The Wall Street crowd is in bed with the Government idiot….Laissez-faire captitolism does not exist in this country or anywhere else. The GOVERNMENT makes regulations favoring wall street keeping the little guy out of the competition and enslaving us to CORPORATISM not CAPITALISM ….You’re obviously a Marxist clown know it all who hasn’t the sense God gave an ant.

  4. Arnold T

    @tu mama en tanga
    You sound like an uneducated drop out. Go read a book. hahahahaa

    • Arnold T

      I have studied markets more than almost anyone I know. My specialty is futures markets. Your uneducated fascination with this Free Market crap is naive at best and cultist insane blather most probably.

      The primitive nature (animal spirits anyone?) of 18th and 19th century economic theory is the basis for today’s Free Market extremist. It’s a joke with dire consequences.

      • Michael Groves

        Oooh.. you have studied markets more than anyone you know? Impressive! So far, your contribution to this discussion is plentiful in quantity but rather limited in rationality…

  5. Yep

    Arnold T. nailed it.

    The glaring condradictions in this post are as profoundly telling as they are contrdictory.

    How can a system in which all property is privately owned simultaneoulsy tout the importance of individual rights? The only ‘rights’ that capitalism defends or confers are the rights of those few who are (un)fortunate enough to control capital – for anyone else, capitalsim is just slavery.

  6. @ Yep
    This will take some thought for you which might be difficult but let me explain it. The only purpose a society has is for the fullfillment of each individual economics. A society where each person freely trades property from one person to another is a society that operates on a voluntary basis between each member. Property becomes a person, a person’s labor, and the things that they have. in a society where each person volutnarily exchanges these things with another is a society where no removal of force can be taken away from someone.

  7. @Marshal Anderson
    How does someone get rich at the expense of others involuntarily in a free-trade society? Considering that the rich got rich by voluntarily giving up items they had for items other people had. It was voluntary exchange of property between two people. No theft has occurred simply because it was voluntary. The minute you have involuntary trade is the minute that freedom begins to evaporate since free-will is removed from someone.

  8. @Arnold T
    Man is a social creature but I prefer to voluntarily associate or socialize with other people. You feel otherwise but that would mean you don’t think the freedom of association exist and don’t believe we have the right to associate with anyone that an individual chooses. What right do you have to decide that for others? The answer is none so save it for the communist meeting.

  9. People can always pick holes in assumptions such as the desirability of freedom. It’s one of those things that it’s easy to describe and demand my own freedom, blind to how that shapes the freedoms of others. (I think of the Hindu caste system when I think this sort of thing. Every single person subscribing to the caste practice has a notion of freedom that involves exploitation.)

    I really enjoyed this piece and love your ‘one minute case’ format. I am not sure I understand it so well. What I do see is a move to capitalism with a conscience, with costs/value put upon humanitarian (often intangible) products and by-products of what could be/should be purely fiscal arrangements. I think having to take environmental costs into account is such a healthy way forward for capitalistic accounting practices.

    Anyway, I am a fan!

  10. we should ban all forms of abortion because it is not right to kill an unborn child-*,

  11. Abortion must not be allowed and banned in all countries,.”

  12. alex

    you are soo naive, capitalism didn’t brought wealth to anybody, wealth is what the slaves produce.

  13. Pingback: On “Special Interests” | The Rational Mind

  14. AynRand

    This is a fairly accurate direct set of quotes from Atlas Shrugged. While I agree with most of what the article states, I have to wonder why credit was not given to the original author.

  15. The ideas in this post are from Atlas Shrugged, among other of Ayn Rand’s works, but there are no direct quotes in this One Minute Case. If you find any that you think are quotes, and you provide the page numbers?

  16. JOHN

    CIBC IS A CHARTED BANK ARCTIC CANADA BRANCH YES BERLIN!>2012 HERE! $300 DOLLARS + ON MUSICS CHEQUES GOOD VAN CITY !CREDITS!YES>

  17. RENE

    “Capitalism is the only social system compatible with the requirements of man’s life”

    This paragraph is impregnated of absolutism which is against creativity and evolution also necessary to man and life on earth.

  18. Arnold T is a Moron

    Michael Groves :Oooh.. you have studied markets more than anyone you know? Impressive! So far, your contribution to this discussion is plentiful in quantity but rather limited in rationality…

    Didn’t you know? He has studied it more then anyone he knows!!! Everyone he knows also spends all their free time playing video games evil corporations make in between bong hits and gorging themselve on brownies.

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