Capitalism means freedom

In recent years, the ideas and principles of capitalism have taken a beating. The election of President Barack Obama in 2008 was a blow to the freedom that capitalism is built on, although President George W. Bush had done a fair job trampling on the principles of capitalism.

Locally, it was a bad year for capitalism and economic freedom in the Kansas Legislature. The Wichita Eagle editorial board seems to have the disparagement of capitalism as its primary goal, as it promotes government action at the expense of economic freedom and individual liberty at every opportunity.

What is capitalism? Milton Friedman, in introducing his book Capitalism and Freedom, wrote this as a way of defining capitalism: “… competitive capitalism — the organization of the bulk of economic activity through private enterprise operating in a free market — as a system of economic freedom and a necessary condition for political freedom.”

Some writers allow government no role at all in the economy, unlike Friedman’s small-state capitalism.

The economist George Reisman writes this in his monumental book Capitalism: A Treatise on Economics:

Capitalism is a social system based on private ownership of the means of production. It is characterized by the pursuit of material self-interest under freedom and it rests on a foundation of the cultural influence of reason. Based on its foundations and essential nature, capitalism is further characterized by saving and capital accumulation, exchange and money, financial self-interest and the profit motive, the freedoms of economic competition and economic inequality, the price system, economic progress, and a harmony of the material self-interests of all the individuals who participate in it.

Reisman’s lecture Some Fundamental Insights Into the Benevolent Nature of Capitalism is a useful look at the principles and benefits of capitalism.

First, capitalism and freedom are intertwined, as Friedman wrote too. Reisman writes “Individual freedom — an essential feature of capitalism — is the foundation of security. He expands on the meaning of freedom, writing “Freedom means the absence of the initiation of physical force.” This is the libertarian belief in the nonagression axiom, as asserted by Murray N. Rothbard: “The libertarian creed rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else.”

Being free from aggression means being free from the common criminal, but also, as Reisman explains, free from government aggression: “Even more important, of course, is that when one is free, one is free from the initiation of physical force on the part of the government, which is potentially far more deadly than that of any private criminal gang.”

It is the recognition of government as aggressor that (partially) separates libertarian belief from conservative. As the libertarian John Stossel explained: “Increasingly, it seems that the biggest difference between conservatives and liberals is that the conservatives know government is force. But that doesn’t stop them from using it.”

This is just the first insight into capitalism in Reisman’s lecture.

3 Comments

  • So true. Without capitalism, there is no freedom. Perhaps we have crossed the point of no return. The current regime will certainly put us in the socialist land of tyranny.

  • When the Eagle Beacon promotes and lobbies for the banning of the selling of all tobacco products, with the same gusto that they lobbied for the ban in small businesses, I might just believe they give a rat’s patoot about anyone’s health. Since these small taverns and pool halls and bingo parlors are not big ad buyers, I would venture to say that the Beacon will continue to throw them under the bus. Perhaps the Beacon should have some balls and go after the State, since the State makes twice as much on tobacco products as the tobacco companies do, and the big retailers, who are big ad buyers, would pull their ad dollars out, if the paper started ;obbying to ban the selling of tobacco. I think THAT would level the playing field. And it would end the hypocritical smoking ban in small businesses, as no one would be buying to smoke anywhere. Isn’t that what Tobacco Free Kansas should be promoting? And the Cancer Society? When that has been suggested to them they HOWL “NO NO NO”! What they don’t tell you is that all their funding comes from the company that sells nicotine replacement, and they DAMN SURE don’t want that to stop! So no one is wanting a tobacco free Kansas. Not the government, not the Cancer Society, not the HEart and Lung Associations, not Tobacco Free Kansas, not the Kansas HEalth Foundation, not the Kansas HEalth Institute, not the Sunflower Foundation, and DEFINITELY not the Kansas Deaprtment of Health and Environment!

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