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Four Cheers for Capitalism


Is capitalism morally wanting? A lot of people think so–and not just the Clintons. Conservatives, of both the neo and paleo variety, seem uncomfortable with what they call “unbridled” capitalism. Recently William Bennett, the former drug and education czar, launched an attack on it in announcing a new project. Neocon intellectual leader Irving Kristol can manage only “two cheers for capitalism.” The paleoconservative wing of Pat Buchanan is no more enthusiastic about the marketplace.

Conservative anticapitalism is apparent in a new Republican embrace of activist government. David Brooks of The Weekly Standard writes that “the party is now significantly less anti-state and more pro-community than two years ago. Conservatives have become re reconciled to the idea of some government action.” Recently Sen. Dan Coats said, “We think government needs to do more than feed the body. [!] The soul and mind need to be addressed.”

What is the conservatives’ beef with capitalism? They say the marketplace is amoral. Capitalists offer whatever is demanded, without regard for its propriety. People unduly emphasize consumption. Hollywood caters to people’s base instincts. Under capitalism, Bennett says, “desires becomes needs.” (This gets awfully close to John Kenneth Galbraith’s indictment of capitalism for creating needs.)

There is a grain of truth here. In a free market, goods and services are tradeable as the parties to transactions see fit. But the conservatives’ criticism is off the mark. Capitalism doesn’t do the things they complain of. People do. More specifically, free people do. Capitalism merely lets them do it. But the critics don’t complain that “freedom is amoral.” Instead, they turn to history’s favorite whipping boy, capitalism. Advocates of capitalism, in contrast, would paraphrase Voltaire: we may dislike what you trade, but we will defend to the death your right to trade it.

Capitalism is what you get when the government leaves people alone. It is a legal environment that recognizes the rights to life, liberty, and property, a set of rules that reflect the natural right of self-ownership. Any alleged evils of capitalism are simply the results of people’s being free to choose. Blaming capitalism for what people supply and demand is a little like blaming the game of baseball because players spit.

When conservatives talk about ridding capitalism of vice, it sounds as though they want restrictions on freedom. Not restrictions like the law against murder, but limits on peaceful conduct that violates no one’s rights. Are these conservatives the same folks who rail against “liberal elites” for not trusting people to make wise and moral decisions about their lives?

Contrary to the claim that capitalism is amoral, there is a strong moral base to the market. Recognition of each person’s property in himself and his legitimately acquired possessions is a moral principle. Under capitalism, you cannot own another human being. That’s a moral idea. Under capitalism, killing another person is illegitimate. That’s a moral idea. Under capitalism, using a person’s property on terms other than those he’s agreed to is prohibited. That’s a moral idea.

Equally ridiculous is the branding of capitalism as a system that extols “atomistic individualism.” It’s always been a straw man. No advocate of capitalism ever waxed ecstatic with a vision of individuals living self-sufficiently by themselves. I don’t know what you would call such as “social” arrangement, but it wouldn’t be capitalism, which is nothing if not a monument to social cooperation. The free market is synonymous with the division of labor and an ever expanding circle of exchange. How atomistic does that sound?

Capitalism, indeed, is the system of individualism, in the sense that each person is politically free to decide for himself what he wants, how he will work to get it, and with whom he will cooperate. But such individualism is not atomistic. It is molecular.

The right-wing critique of capitalism is off the mark. It reflects a precapitalist mentality that distrusts liberty. Many conservatives can muster at best only two cheers for capitalism. Considering all that it has made possible, I’d give it four.

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    Sheldon Richman is former vice president and editor at The Future of Freedom Foundation and editor of FFF's monthly journal, Future of Freedom. For 15 years he was editor of The Freeman, published by the Foundation for Economic Education in Irvington, New York. He is the author of FFF's award-winning book Separating School & State: How to Liberate America's Families; Your Money or Your Life: Why We Must Abolish the Income Tax; and Tethered Citizens: Time to Repeal the Welfare State. Calling for the abolition, not the reform, of public schooling. Separating School & State has become a landmark book in both libertarian and educational circles. In his column in the Financial Times, Michael Prowse wrote: "I recommend a subversive tract, Separating School & State by Sheldon Richman of the Cato Institute, a Washington think tank... . I also think that Mr. Richman is right to fear that state education undermines personal responsibility..." Sheldon's articles on economic policy, education, civil liberties, American history, foreign policy, and the Middle East have appeared in the Washington Post, Wall Street Journal, American Scholar, Chicago Tribune, USA Today, Washington Times, The American Conservative, Insight, Cato Policy Report, Journal of Economic Development, The Freeman, The World & I, Reason, Washington Report on Middle East Affairs, Middle East Policy, Liberty magazine, and other publications. He is a contributor to the The Concise Encyclopedia of Economics. A former newspaper reporter and senior editor at the Cato Institute and the Institute for Humane Studies, Sheldon is a graduate of Temple University in Philadelphia. He blogs at Free Association. Send him e-mail.