Why Capitalism? Part Two: Defining Terms

When people talk about the inherent failures of capitalism and the free market, what are they talking about? To understand, we need to agree upon a definition of what capitalism is and is not.

Capitalism is a political theory. By politics, I mean the branch of philosophy that is concerned with the framework of how individuals interact with one another. So what are the premises upon which "capitalism" is built?

• Freedom

It's that simple, really. Freedom is that sacred cow to which we've all learned to pay lip-service. But do we even understand what freedom means? Let's find out. This is how Merriam-Webster defines freedom:

Main Entry: free·dom
Pronunciation: \ˈfrē-dəm\
Function: noun
Date: before 12th century
1 : the quality or state of being free: as a : the absence of necessity, coercion, or constraint in choice or action b : liberation from slavery or restraint or from the power of another : independence c : the quality or state of being exempt or released usually from something onerous d : ease, facility e : the quality of being frank, open, or outspoken f : improper familiarity g : boldness of conception or execution h : unrestricted use
2 a : a political right b : franchise, privilege

Read that definition carefully. When you are talking about freedom in the context of your current political environment, how well does it match up with this definition? If you can answer that freedom and the current American political system can coexist, you've missed something. You've missed the first and therefore most common meaning of the word upon which all of your Statist illusions supposedly rest.

"The absence of necessity, coercion, or constraint in choice or action."

The authority of all government of any form--anywhere, ever--lies in its ability to compel compliance and obedience through coercion, which ultimately takes the form of violence. Stones, sticks, clubs, bows, and guns have been the tools used to engineer almost all political systems, past and present. It is interesting to note that political systems built on the use of violent coercion cannot claim to promote freedom, as the very definition of freedom makes this impossible. To claim otherwise is a logical absurdity.

Freedom in a Statist system is thus a logical absurdity, but there will be more to say about that later, I am sure.

I am positing that capitalism, or to be more accurate, anarcho-capitalism, is the only political theory that has ever been compatible with individual freedom.

For a superior definition of capitalism, I submit to you the immortal words of Ayn Rand:

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.
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In a capitalist society, all human relationships are voluntary. Men are free to cooperate or not, to deal with one another or not, as their own individual judgments, convictions, and interests dictate. They can deal with one another only in terms of and by means of reason, i.e., by means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit. The right to agree with others is not a problem in any society; it is the right to disagree that is crucial. It is the institution of private property that protects and implements the right to disagree—and thus keeps the road open to man’s most valuable attribute (valuable personally, socially, and objectively): the creative mind.

So does the system that you call capitalism resemble this definition in any way?

No. I can't imagine that it truly does. When people say capitalism today, they are not referring to an economic system free of control. "Laissez-faire" means with no regulation. Regulation is force. Regulating the voluntary economic relationships among supposedly free men is not a "banishment of physical force from human relationships."

When people use the word "capitalism" to desrcibe the political foundation of the United States government, they are referring to one of two political-economic ideologies.

1. CORPORATISM: A system of economic, political, and social organization where corporate groups such as business, ethnic, farmer, labour, pharmaceutical, military, insurance, patronage, or religious groups are joined together into a single governing body in which the different groups are mandated to negotiate with each other to establish policies in the interest of multiple groups within the body. [Italics mine]
2. MERCANTILISM: An economic system developing during the decay of feudalism to unify and increase the power and especially the monetary wealth of a nation by a strict government regulation of the entire national economy usually through policies designed to secure an accumulation of bullion, a favorable balance of trade, the developmental of agriculture and manufactures, and the establishment of foreign trading monopolies.[Italics mine]

Capitalism has been hijacked by the Statists. The economic system that conservatives like P-P-P-P-P President Reagan and George W. Bush pretend to protect and liberals like Big Barack and Michael Moore pretend to lambast is a poisonous mixture of Corporatism and Mercantalism. To take up the banner of "capitalism" is to label yourself a right-wing nutjob.

So if you've read this far, you'll understand if I stop defending capitalism. The word capitalism is synonymous with exploitation for good reason.

So let me now introduce you to Anarcho-Capitalism.

Anarcho-capitalism is an individualist anarchist political philosophy that advocates the elimination of the state and the elevation of the sovereign individual in a free market. In an anarcho-capitalist society, law enforcement, courts, and all other security services are provided by voluntarily-funded competitors such a private defense agencies rather than through compulsory taxation, and money is privately produced in an open market. Because personal and economic activities are regulated by the natural laws of the market through private law rather than through politics, vicitimless crimes, and crimes against the state are rendered moot.

Anarcho-capitalists argue for a society based in voluntary trade of private property (including money, consumer goods, land, and capital goods) and services in order to maximize individual liberty and prosperity, but also recognize charity and communal arrangements as part of the same voluntary ethic. Though anarcho-capitalists are known for asserting a right to private (individualized or joint non-public) property, some propose that non-state public/community property can also exist in an anarcho-capitalist society. For them, what is important is that it is acquired and transfered without help or hinderance from the compulsory state. Anarcho-capitalist libertarians believe that the only just, and/or most economically-beneficial, way to acquire property is through voluntary trade, gift, or labor-based original appropriation, rather than through aggression or fraud. [Emphasis my own]