“Capitalism” Is the Wrong Word
Jan 6th, 2008 by Micah Tillman | 12 Comments |
Recently I’ve heard both Rush Limbaugh and Sean Hannity say one of the things Americans should be grateful for is “capitalism.” And I just ran across a blog post that shows they should pick a different word.
The post said that you should hire childcare so you can spend less time on raising your kids and more on getting rich.
That’s capitalism. It is the idea that everything comes down to capital, that capital is the most fundamental thing in the world, that all value and worth are derived from capital.
In other words, “-ism” usually means, “is the most fundamental thing.” (There are important exceptions, of course, like where “-ism” means, “pertaining to such-and-such a person or group of people.” E.g., “‘Misunderestimate’ is a Bush-ism.”)
For example: Rationalism is the belief that everything comes down to Reason. (Reason is the most fundamental. It is the source of value/worth). Empiricism is the belief that everything comes down to experience or observation. (Only those beliefs derived from observation or experience have value/worth.) Etc.
But when conservatives like Limbaugh and Hannity use the word “capitalism,” they’re not talking about the belief that money is the most fundamental thing, the source of all value. They mean something that could be better expressed through the terms “democratized” or “free market economics.”
And the reason they think this kind of economic system is good is that they think it best preserves and promotes freedom or choice. If you’re a communist, socialist, or progressive you disagree (and you may be right). But the point isn’t whether the conservatives are correct. The point is that conservative types value what they call “capitalism” because they value freedom, not capital.
So it would be more accurate for them to say we should be thankful for “freedomism.”
And I think such a title would be more helpful when it came to clarifying exactly what was being debated when conservatives get into arguments with other groups. It would force the debate to be framed in terms of (a) whether freedom actually is the most important thing in economics, and (b) which group’s preferences would actually promote and preserve freedom.
Capitalism was named by its enemies, of course. It was Marxist writers who popularized the term.
Micah, thank you, thank you, thank you. You have spoken my own mind so eloquently. I’m not into capital but into free markets and individual freedom.
In the middle of the 20th century, capitalism had apparently failed; the Great Depression had finally falsified it. Meanwhile, the British were having great success with their socialist experiment and the Soviet Union had managed to industrialize a 19th century agrarian economy into a powerhouse through Communism. Everybody except a tiny handful of people agreed that capitalism was less efficient than socialism. Nevertheless, capitalism still had its adherents. They too agreed that capitalism was less efficient than socialism, but argued on its behalf for Mr. Tillman’s reasons. Capitalism, they said, was morally superior since it didn’t force anybody to do what they didn’t want to do. I doubt very many people think the same way as Mr. Tillman nowadays. Now that capitalism has emerged triumphant on efficiency grounds, the moral argument seems to be made for socialism instead and capitalism is criticized as being morally inferior (since it leads to inequality, etc.). I find this reversal of roles during the 20th century endlessly fascinating.
For myself, I tend to side with Mr. Tillman. I think capitalism is morally superior to socialism. The fact that it also serves to make us all rich as kings is a happy accident. I like the fact that capitalism has a non-coercive mechanism to get people to do difficult, dangerous, or dirty jobs (paying them more) rather than simply forcing people to do them without compensation for it. I like the fact that we can let people freely emigrate from our country without building a Berlin Wall trapping them in. Countries with different economic systems can’t afford to do this or the country would empty overnight. (Of course, there have always been people who defect from the United States, even to the Soviet Union, as Lee Harvey Oswald did. Unfortunately, he came back.) I like the fact that in capitalist countries, uniquely, the guys with the most guns (the government) are not the same people as the guys with the most money. (George W. Bush is certainly not poor; his net worth is between 9 and 26 million dollars, but this is 1/2000 the amount Bill Gates has. In Cuba, the wealthiest person is Fidel Castro.)
I don’t believe that capitalism is a perfect system. I can be convinced that, for example, there might be a more efficient and more just way to provide health care than the capitalist system. But you’ve got to make a pretty powerful argument to convince me. The weight of history on both morality and efficiency lies with the free market. Nobody thinks it works perfectly, but all the evidence indicates it works better than anything else.
Andrew,
I’m sure you realize that we cannot really call our health care system, as it is now, a part of a free market economy. With so many government regulations, taxes, tort laws, government grants, and government subsidies through Medicare and Medicaid, it’s hardly free.
Oh, I agree with you. I’m not sure there is a single modern industrialized country with a truly free market health care system. But that’s why I can’t actually say with confidence that a free market health care system would work best. It’s quite possible that it wouldn’t. I’m not even sure that the best policy would be to try it. (People hate paying for their own health care, for some reason, so it’s probably impossible politically.) I always rather hope that some little country like Hong Kong will give it a go so we can at least get some data on the subject. I do think there are very real dangers for the poor in such a system and even for some members of the middle class. Probably nothing that private charity or government subsidy couldn’t handle, but I worry that a lot of people would do foolish things like not buy catastrophic health insurance or not consume enough preventive health care and some of them would pay the price for that.
Huzzah for the moral superiority of free markets!
My parents were in Amway in the 70’s. One of the theories in the promotional materials was to invest more time in “The Business” now, so you could earn enough to be able to spend more time with your family later. It was a race. I won by growing up first.
I saw Donald Trump on a talk show recently talking about entrepreneurship. He said it was important for his family to understand that he had to work long hours so he could provide a better life for them.
Sadly, there will always be greedy people (like Donald Trump and, perhaps, your parents). I’ve never been convinced that the solution is to pass a law against greed.
This makes me think of a Bob Dylan song-here’s part of it
Well, it’s sundown on the union
And what’s made in the U.S.A.
Sure was a good idea
‘Til greed got in the way.
Well, you know, lots of people complainin’ that there is no work.
I say, “Why you say that for
When nothin’ you got is U.S.-made?”
They don’t make nothin’ here no more,
You know, capitalism is above the law.
It say, “It don’t count ‘less it sells.”
When it costs too much to build it at home
You just build it cheaper someplace else.
Well, it’s sundown on the union
And what’s made in the U.S.A.
Sure was a good idea
‘Til greed got in the way.
Well, the job that you used to have,
They gave it to somebody down in El Salvador.
The unions are big business, friend,
And they’re goin’ out like a dinosaur.
They used to grow food in Kansas
Now they want to grow it on the moon and eat it raw.
I can see the day coming when even your home garden
Is gonna be against the law.
Well, it’s sundown on the union
And what’s made in the U.S.A.
Sure was a good idea
‘Til greed got in the way.
Democracy don’t rule the world,
You’d better get that in your head.
This world is ruled by violence
But I guess that’s better left unsaid.
From Broadway to the Milky Way,
That’s a lot of territory indeed
And a man’s gonna do what he has to do
When he’s got a hungry mouth to feed.
Well, it’s sundown on the union
And what’s made in the U.S.A.
Sure was a good idea
‘Til greed got in the way.
Copyright © 1983 Special Rider Music
Columbia Records
Ah yes, that celebrated philosopher and economist Bob Dylan. There are so many fallacies here (many of them obvious to anyone who’s taken Economics 101) that it’s hard to know where to begin. Of course, I don’t wish to minimize the short-term pain that capitalism causes with its “creative destruction.” But in the long run, Ricardo’s Law of Comparative Advantage applies. The United States should specialize in what it does well and let other countries make what those countries do well, instead of trying to do everything ourselves.
spoken like a free trader
Actually Dylan’s song kind of swipes at the Unions as well and just speaking the reality of the world as I see it. I’m actually not totally against capitalism, free trade, and especially not against what Micah calls “freedomism”. Micah’s post just reminded me of that song.
I actually agree with Dylan that the decline of unions is a bad thing, for what it’s worth. I think unions play an important role in keeping the wage market efficient.
But on the rest of it, he doesn’t quite know what’s he talking about. America’s importing various manufactured goods that used to be produced here is not a bad thing, in the long run. We are shifting our specialization to more advanced fields and then trading with the rest of the world for the stuff we used to do well, but which they can now do more efficiently. (This benefits the rest of the world as well. As I said, the marvelous thing about capitalism is that it makes everybody better off.)
I do not wish to minimize the pain of those who are thrown out of work by this transition. I have no doubts that this is a genuine and serious problem for them. It must be horrible to lose your job in auto manufacturing (or whatever), particularly if that’s all you know how to do. Similarly, the Industrial Revolution threw tons of artisans out of work as we moved to using goods which could be produced more cheaply through manufacturing (rather than hand-crafting). In the long run, this led to much greater prosperity, but in the short term I have no doubt that it was extremely painful to those craftsmen who lost their livelihood.
But what motivates Dylan in the song is the same thing as what motivated the Luddites who smashed manufacturing machinery because it was “stealing their jobs.” It was stealing their jobs, but their descendants are far better off because of it than they would otherwise be.