Today, a majority of people younger than I am believe that "socialism" is better than "capitalism." I can only shake my head. The last century proved in graphic, bloody detail that "capitalism" (freedom) leads to prosperity, while "socialism" leads to bitter poverty, concentration camps, and mass death.
On my Capitalism page, I quote my favorite economists, who define "capitalism" as
The social system based on
the rejection of the initiation of force or violence against others.
This is also known as the Free Market system. The opposite of "free" is "regulated," "controlled," "dictated," or "managed" by the government.
Most people think of a "capitalist" as someone who uses the violence and the coercive power of the State to crush his competitors and exploit the poor. Such a person is not a "capitalist," according to every defender of "capitalism" who is willing to identify himself as being "pro-capitalist" or pro-"Free Market." (Most Wall Street types are not willing to identify themselves in this way. They are not true "capitalists.") "Capitalism" is the opposite of "socialism" or "fascism" or any other big-government system.
All government programs are socialist programs.
All government programs deny that capitalism is true.
All government programs claim that the service they provide could not be provided by ordinary people setting up businesses, competing against each other to get consumers to buy the services that consumers allegedly desire.
Economic Theory and the history of capitalism demonstrate that government programs never work as well as the Free Market. We should abolish all -- yes, all -- government programs and allow the Free Market to provide the products and services that consumers want. Elimination of all socialist programs and complete reliance on people acting freely is 100% laissez-faire capitalism, and is called "anarcho-capitalism."
America became the most admired nation on earth because it stood for the proposition that capitalism (liberty) succeeds and socialism (government force and threats of violence) fails.
- Capitalists reject the idea that we need government to deliver Christmas cards.
- Capitalists reject the idea that we need government to run schools.
- Even the Republican Party's National Platform has called for the abolition of
- the Departments of Commerce,
- Housing and Urban Development,
- Education, and
- Energy
- There is nothing that human beings need to do that peaceful people in a Free Market cannot accomplish better than socialist/fascist/corporatist/crony-capitalist government programs
A truly consistent "capitalist" is an anarcho-capitalist. The anarcho-capitalist believes in
• the complete absence of socialism,
• the complete absence of government regulation or control
• the complete absence of the initiation of force.
| This is the issue: Is there any human activity that is more efficiently carried out under threats of violence and force than under liberty? |
- Is it the case that human beings cannot be trusted to produce milk and bread for the children unless they are threatened with prison terms by "the government?"
- Is it really true that Americans cannot manufacture and distribute computers, clothing, housing, groceries, without "the government?"
If you answer no -- for example,
"No, businessmen are greedy and immoral and would only manufacture shoes of low quality and sell them at rip-off prices, unless bureaucrats were regulating them,"
and you added,
"And consumers are stupid, and would always buy low quality at a high price and wouldn't care for their family unless federal bureaucrats were making sure families paid attention to the most important things."
-- then you have a religious faith in the State and its regulators, and believe that when greedy businessmen and stupid consumers are elected to government positions by their greedy and stupid peers, these newly-elected greedy and stupid human beings suddenly lose their greed and stupidity and become altruistic and intelligent overseers of others. "Statism" is a religious belief in the depravity of human beings and faith in the sanctified State.
Throughout this website we have discussed over 200 areas of human endeavor where it is often alleged that Americans could not succeed without government regulation. But all you have to do is look at the things you have and enjoy, compare your life with that of most people living in socialist countries, and ask, "If the federal government were to be abolished, would entrepreneurs and business owners make sure that I had access to the best quality at the lowest price?"
- From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?
In this present crisis, government is not the solution to our problem; government is the problem. - -- President Ronald Reagan, First Inaugural Address
History tells us that where there is "Liberty Under God," you and I will work hard, with creativity and integrity, to provide goods and services which benefit the lives of others. We will find ways to produce better goods than our competitor and will bend over backwards to do so at a lower cost. In our efforts to get consumers to buy what we create, we will improve the lives of our customers, because we know that where there is liberty, our customers have the freedom to shop elsewhere, and other Americans have the freedom to start a business which will sell what consumers demand.
History proves that capitalism works and socialism fails. The great economists have explained why:
- Ludwig von Mises, Human Action, Yale Univ. Press, 1949, 885pp. + index
- George Reisman, Capitalism, Ottawa, IL: Jameson Books, 1998, 998pp. + index
- Thomas Sowell, Knowledge and Decisions, NY: Basic Books, 1980, 383pp. + index
Mises in particular, and his Nobel Prize-winning student, F. A. Hayek, conclusively proved that without the freely-fluctuating price mechanism of the free market, socialist planners can never allocate resources in the most efficient manner. Mises’ work has never been refuted:
Capitalism accepts as a matter of unchanging economic law the fundamental inefficiency of centralized government planning over free market decision-making. The reader can turn to this bibliography for a nearly complete defense of the concept.
Tragically, most Americans do not really understand how capitalism works. This makes them easy prey for socialist demagogues.
There are usually a few objections:
These three objections allegedly prove that capitalism cannot always work. Every economy needs some socialism, we are told. People who say they oppose socialism and communism cannot explain how capitalism would provide roads, courts, and national defense. Their support of capitalism in other areas begins to waver.
Suppose we lived under a completely socialist government. All of our shoes are made by the government and distributed to the people by the government "Ministry of Shoes." Suppose some radical libertarian proposed turning over the business of making shoes to a competitive, profit-based system. We might hear something like this:
- How could you? You are opposed to the public—and to poor people—wearing shoes! And who would supply shoes to the public if the government got out of the business? Tell us that! Be constructive! It's easy to be negative and smart-alecky about government; but tell us
- • who would supply shoes?
- • Which people?
- • How many shoe stores would be available in each city and town?
- • How would the shoe firms be capitalized?
- • How many brands would there be?
- • What material would they use? What material lasts?
- • What would be the pricing arrangements for shoes?
- • Wouldn't regulation of the shoe industry be needed to see to it that the product is sound?
- • And who would supply the poor with shoes? Suppose a poor person didn't have the money to buy a pair?
Most Americans -- even those who claim to support capitalism, could not answer these questions. Anarcho-capitalist economist Murray Rothbard answers these questions:
- These questions, ridiculous as they seem to be (and are) with regard to the shoe business, are just as absurd when applied to the libertarian who advocates a free market in fire, police, postal service, or any other government operation. The point is that
- the advocate of a free market in anything cannot provide a "constructive" blueprint of such a market in advance.
- The essence and the glory of the free market is that individual firms and businesses, competing on the market, provide an ever-changing orchestration of efficient and progressive goods and services: continually improving products and markets, advancing technology, cutting costs, and meeting changing consumer demands as swiftly and as efficiently as possible. The libertarian economist can try to offer a few guidelines on how markets might develop where they are now prevented or restricted from developing; but he can do little more than point the way toward freedom, to call for government to get out of the way of the productive and ever-inventive energies of the public as expressed in voluntary market activity. No one can predict the number of firms, the size of each firm, the pricing policies, etc., of any future market in any service or commodity. We just know—by economic theory and by historical insight—that such a free market will do the job infinitely better than the compulsory monopoly of bureaucratic government.
- "How will the poor pay for defense, fire protection, postal service, etc.," can basically be answered by the counter-question: how do the poor pay for anything they now obtain on the market? The difference is that we know that the free private market will supply these goods and services
- • far more cheaply,
- • in greater abundance,
- • and of far higher quality
- than monopoly government does today. Everyone in society would benefit, and especially the poor. And we also know that the mammoth tax burden to finance these and other activities would be lifted from the shoulders of everyone in society, including the poor.
The "orchestration" of which Rothbard speaks has also been called "the Invisible Hand." Liberty Under God organizes society better than atheistic socialism. Or even "Christian" socialism.
