On the Issues: Capitalism


"It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.” ~ Frédéric Bastiat, The Law


If you look at my Portraits of Inspiration gallery, you'll see a number of people on there who identify as socialists. In those cases, I tend to like them in spite of their politics, not because of it. Mostly it's to do with their other achievements and character traits.


Getting people to change their particular politics is as simple (or as hard) as sitting down and having a conversation with them for an hour on a given topic.


A lot of people seem to think that socialists and communists are unreachable. That they're just inured ideologues and always will be. I don't believe that, though. I know it's not true because I myself used to be one. Many years ago, I was an avowed socialist and even a full-on Moaist at one point. I remember thinking at the time that Mao Zedong was an admirable leader who made China great again by consolidating grain into the cities, industrializing the nation after valiantly leading his people through the snow on the Long March, and that it was only in and around 1961 that he started going a little crazy by offing his generals.


Yes, I was that stupid back then.


Likewise, I used to think that socialism was great. That things like healthcare and free college were a human right, that minimum wage and wealth redistribution were moral imperatives. Then I started studying law, history, politics, and later economics. I slowly but surely began rebuilding my worldview up from first principles. Today I'm a minarchist and a capitalist.


That process took many years, but hopefully this article will help streamline the process for some of you and give others a method by which to do the same.


My standard approach to life is that, when I don't know what someone knows, I tend to assume they know nothing and build them up from first principles. This, as it turns out, is really the best way to learn about economics, politics, and most things in general since most problems are caused by people reacting in the moment based on emotion, rather than using critical thinking.


Before we can build arguments, however, we first have to agree on a framework and that means crafting definitions.


If you ask the typical socialist what the definition of capitalism is, they will probably tell you something like, "A system of blah, blah, means of production, ownership class, blah blah workers." This definition is based upon reaction rather than first principles. If you wanna use that definition, then fine. We can have that conversation and I can point out all the inconsistencies with it, but I'm going to make it even simpler for you.


Ask anyone who's not a socialist or a communist for their definition of capitalism and it'll be something more along the lines of:


Free and voluntary exchange absent coercion.


They may not be able to articulate it quite as eloquently as that, but most capitalists would be satisfied with that definition. If we can't agree on a definition, then we're at an impasse and there's no point in going forward with the discussion, which is one reason I like to start at first principles. It cuts right to the heart of the matter.


If a transaction involves force or fraud, it's not capitalism. It's something else.


Maybe you, as a socialist, take issue with that definition and that's fine, but know that that's what people from the other camp mean when they use the term "capitalism" and they base their philosophy and their actions upon it (whether implicitly or explicitly).


Personally, I care less about labels and more about what people do.


Show of hands, anyone against the idea of free and voluntary exchange absent coercion? Anyone? No, no one? Didn't think so. Because to admit otherwise would be to confess to being a violent authoritarian, at which point you've lost the argument. Free exchange is a principle we can all universally rally around, and I guarantee you even socialists and communists want that, they maybe just don't call it "capitalism."


Maybe they call it something else, in which case we're left with a vacancy for what to call this. Maybe free exchange absent coercion is what how they define socialism, which seems silly and anachronistic, but whatever. That's just word-thinking and semantics at that point. I care less about what you call it and more about freedom and virtue.


Again, just know that most capitalists will use that definition in some form and it works.


If we accept this definition, then from that, certain things follow, particularly when coupled with other first principles such as self-ownership, individual autonomy, and the non-initiation of force. Typically, when I use this definition with socialists (and they agree to it), they tend to follow along rather easily with all the resultant conclusions about property rights, lack of interference from the State, and so forth. I watch their eyes light up as this is an explanation they've clearly never heard before. No one ever explained it to them like that, but it makes sense to them all of a sudden.


Of course it does, because libertarianism is the only philosophy built upon a logically and morally consistent foundation. All things take the path of least resistance.


What happens if they don't agree?


In those cases, typically, the response I'll get is a pithy, scoffing dismissal. "Pfft! Absent coercion! That's a good one," and then they proceed to leave out the reason. That's how I know I've triggered cognitive dissonance in them, because if they had a reason, one would think they'd just point out the reason.


Usually, if people reject this definition, they take issue with one of three things: the "free" part, the "voluntary" part, or the "absent coercion" part. They'll then proceed to wail about the "excesses of capitalism" without ever really explaining what that means; or if they do, what they wind up describing predictably won't be capitalism, but rather cronyism.


In truth, we haven't had real capitalism since 1913, back before the IRS, before income taxes, before the alphabet soup agencies, before heavy regulation of industry, the welfare state, the war on drugs, and so on and so forth.


So if we don't have free market capitalism, what do we have?


In point of fact, for about the last century or more, we've had a quasi-socialistic system built upon the last remnants of a free market. Those underlying vestiges of capitalism have prevented us from going the way of Venezuela, which is a topic socialists love to avoid or denounce whenever they can because it's clear proof their policies don't work, never have, and never will.


For the same reason, they shift from real socialism (which is weird if it's never been tried) to so-called democratic socialism, which in many ways it even worse. They then conflate this democratic socialism with social democracies like Scandinavia.


Either way, it's a problem because those systems aren't based on first principles.


I've always regarded democracy as a four-letter word in the sense that it doesn't protect your rights at all, rather it puts them at the mercy of the will of the majority. Fifty-one percent vote to strip you of your rights, your property, your liberty, your life, and in a democracy that's considered legitimate, but to any sane, moral actor it's tyrannical insanity. A vicious, thuggish mob.


Stare at this meme until you no longer support democracy.



But, but democracy is a good thing! It's used in contrast to authoritarian dictatorship! Again, you're stuck on word-thinking and not following principles to their logical conclusion. Doesn't matter what you call it, the result is the same.


So ... what would you suggest instead?


I suggest the term Republicanism. No, not like the Republican Party, but the way it's used in the Constitution. The Constitution, if you actually read it, guarantees that we the people are to be governed under a Republic, which means that we the people retain certain rights even against the will of 99.99999% of the voters. Among those are property rights and self-ownership.


This is why capitalism prevails, and why we fought for most of the 20th century against socialism and communism, because free and voluntary exchange absent coercion is a principle enshrined in the heart of our founding documents.


Creeping statism not withstanding.

"What is called 'capitalism' might more accurately be called consumerism. It is the consumers who call the tune, and those capitalists who want to remain capitalists have to learn to dance to it." ~ Thomas Sowell


One common complaint socialists have is about the evil exploitative business owner who just takes advantage of their workers. Now, to be fair, some employers do take advantage of their workers and abuse them; but in a capitalist society, you are free to leave and go elsewhere. You aren't chained to the oarlocks. Most socialists think that if you're a capitalist, you don't care about human beings, but of course that isn't true. We're all human and the suffering of others disturbs us.


We all agree on the problem. The difference is in the method used to solve it. The socialist wants the State to come in and crack the whip, applying a heavy-handed top-down approach to compel behavior, which might work in the short-run but creates precedent for creeping Statism. The definition of fascism is when the State takes control of industry, and this overlaps with socialism, which is why the Nazis were, wait for it ... national socialists.


The capitalist, on the other hand, uses much more subtle means to correct behavior. The capitalist suggests you hit the bad business owner right where it hurts the most: his wallet.


How do you do this? By boycotting their product.


If I don't like the service I get at a particular store, no one's holding a gun to my head. I don't have to keep shopping there. I can buy from someone else, leaving a nasty review on my way out the door in the hopes of dissuading others from buying there. They then are free to buy there or not with the added information I've given them.


If I don't like what my boss or my company is doing, I'm free to leave and find employment elsewhere that is more in line with my interests and values:



Likewise, if I hire someone and I don't like the job they do, I can fire them. In fact, I can fire them for any reason, so long as it doesn't breach any contract we might have had. Yes, that includes bigoted reasons, but by the same token, if I think my employer is bigoted, I can quit and go work for their competitor, hurting them that way, robbing them of my talent and forcing them to choose between profit and their own bigotry.


If they choose profit, they will give up their bigotry (or at least suppress it, which is functionally the same thing); whereas if they choose to cling to their bigotry, odds are they will lose business quickly as other people find out, and thus they'll lose profit in the long run as well.


I rather like Larry Sharpe's take on the gay wedding cake issue. If you put a product out in public (such as baking a cake to go into a retail window), then any customer willing and able to pay for it has the right to buy it regardless of their identity. If, on the other hand, you demand a specific service (e.g. asking a Jewish baker to make a Nazi cake), then they have the right to refuse for whatever reason, even if their refusal would be bigoted.


That's a far more nuanced and morally consistent argument.



It's also how free market capitalism can be used to solve social problems.

People complain all the time about monopolies forming under capitalism; yet, in those instances, they are at least voluntary, unlike the State which is a coercive, involuntary, violent monopoly. If a monopoly forms through natural means in the free market, it's usually because it's more efficient that way. That's not to say all business moguls are saints. Many due crooked things, but free market capitalism and minarchy have ways to deal with that, punishing the wrong-doers without spilling over onto innocent people just because of what class they're in.


So if monopolies are bad, the last thing you want is to involve the State.


Likewise, unlike the State, even a corporate monopoly can't compel you to buy their product if you don't want to. No matter how big Exxon Mobile gets, they can't force you to buy gasoline. At best, they can make it really convenient to do so and make not doing so really inconvenient, but that isn't the same as force. At the end of the day, you're still free to go buy an electric car if you want and power it with solar panels on your roof. It may be costly to do that, but you have that freedom.


Only the State has the power to initiate force against people. In fact, it has a monopoly on it. That power is supposed to be reserved for the protection of individual liberty in terms of collective defense and courts of Common Law. However, we all know that special interests lobby to expand State power to then wrestle control of the gun of the State to use to quash competitors.


This is what most socialists fear, but it isn't capitalism. That's corporatism and cronyism and thuggery, which is why we need to be careful about giving more power to the State.


Bureaucrats generally aren't businessmen or technicians. They don't work in the various industries and have no expertise on the sectors they try to regulate, or maybe they have knowledge in one or two, but not others. Not enough to encompass all areas of government involvement. Those that have worked in the private sector tend to be against regulation anyway (people like Rand Paul, Austin Petersen, Larry Sharpe).


Most others act in ignorance and think more government is the answer. They think government's the answer because they're either bought off by special interests looking to co-opt the power of government (the neo-liberals and neo-cons) or because they've only ever worked in the public sector (e.g. Bernie Sanders).


This ignorance and corruption becomes a vicious cycle:


Stare at this meme until you get why regulations are a bad idea.


The rules they craft will be ineffective at best, harmful at worst, because they simply don't have the expertise necessary to know what the market needs.


Alternatively, they might outsource the job of writing regulations to experts within that field. That makes a bit more sense, right? Except it doesn't. Either the special interests will write self-serving regulations that do nothing to cure the problem - in which case, so much for government oversight - or the industries are competent enough and trustworthy enough with their own self-policing that the State becomes redundant, in which we can just cut out the middle man.


Look at the insurance industry, the banking industry, Big Pharma, Big Agro, or Big Oil. None of these entities would be able to get away with what they're doing in a truly free market. The reason they're as powerful as they are is because they lobby the government to create special protections that benefit them while squeezing out competitors. That's not capitalism. What you're fighting in that instance isn't an excess of unbridled capitalism.


In fact, it's the bridles that are the problem - bridles put on by a select few corporate oligarch.


The insurance industry is the best example. They lobby the government through bribes and use scare tactics to convince the public that it's in their best interests that we mandate the purchase of insurance for everyone, whether they want it or not, whether they need it or not. Remember I said capitalism is about free and voluntary exchange. This is compelled exchange, which is a violation of your human rights. The State then forces you to buy insurance and or pay a fine if you don't comply. If you stand on principle and refuse to pay the fine, you go to jail. If you don't wanna go to jail, if you resist their thuggery, you get shot. This is why libertarians say taxation is theft and the State is violence.


We're just cutting to the punchline.


Here's the sinister part, though. People talk about the private for-profit prison system and how it perverts justice by creating incentive to throw more innocent people in jail? Well, by compelling commerce (whether it's insurance, healthcare, education, or any other commodity) you're effectively doing the same thing. By mandating insurance, people will buy, if only to stay out of jail. It's human nature. This artificially raises demand for insurance without increasing the corresponding supply. Thus, the cost of insurance goes up artificially and guess who rakes in tons of profit they otherwise would not have had?


Yep, those same greedy corporations. So really, you're just feeding the beast, giving it exactly what it wants, which is more power. In trying to rein it in, you're in fact giving it the very coercive monopoly you don't want it to have, and which it otherwise can't get. At that point, you're not fighting capitalism, but cronyism.


As I said, corporations can't compel you to do anything without first co-opting the power of the State. In a true free market, they can't force anyone to buy or not buy anything.



And if they tried to do that, if they tried to compel you to buy from them by way of intimidation tactics, that's no longer capitalism either. That's thuggery and the market gives you recourse both in the form of courts of Common Law, but also in being able to set up a competitor, or even in just using your free speech to go and bad mouth them, hurting their reputation.



Socialists call for regulation because they worry about corporations putting profits ahead of people and the environment. In reality, this gives away your own power.


Profits are the lifeblood of a corporation and it's their Achilles Heel. They can't do anything without consistent profit, which makes them quite vulnerable. You know their weakness, all you have to do is lean on them and they'll cave. The reason people don't - and you're not gonna like hearing this - is because people don't actually care as much as they claim. They don't care enough to stand by their principles and hold bad corporations and bad actors accountable.


They say they do, but talk is cheap.


Think about it like this. Wal-Mart recently got caught engaged in acts of slavery. No, not the socialist rhetoric of "wage labor is slavery," but I mean actual slavery. Now, I would assume that 100% of you reading this are opposed to slavery, right? Yes? We're all virtuous people who can agree on that. I'll assume a subset of you maybe didn't know that about Wal-Mart before and so I won't criticize you for supporting an evil corporation or for benefitting from the legacy of slavery. You get a pass on past actions. You get a clean slate.


But knowing it now, how many of you will continue to shop at Wal-Mart?


I already didn't, in response to all the other evil things they do, but I know I for one will never ever shop there again unless I have no other choice, because I don't condone slavery. Not in the least. I'm willing to put my money where my mouth is and I hope those fuckers starve to death and go bankrupt so they learn, and everyone else learns, that such behavior is completely intolerable.


How many of you are willing to join me?


If you are, then great. We don't need the government to do anything. If enough of us unanimously got together and all boycotted Wal-Mart for the same reason, they'd quickly feel the pain and go into panic mode and either reform or go belly up. Either way, I'm fine with that. It won't take much. The average corporation only makes about 4% profit after expenses. Wal-Mart likely makes a lot more than that, but I'm sure they'd sit up and take notice of a sudden 4% decline.


Even if it took 10% or 25% of us to make a difference, that's still a lot less effort than it would take to convince a bunch of bureaucrats in Washington to even consider the issue of regulatory reform, let alone to plow through all the lobbyist obstruction that would inevitably follow.


So while capitalism may have its issues, the free market does have very powerful metrics in play to quickly and decisively fix them as well.


Now, what about all those people who inevitably will continue to shop at Wal-Mart even after hearing about how they've been caught engaged in slavery? I put it to you, those people simply don't care and are just virtue signaling. They are pretending to care about the well-being of others. "But, but, they're mostly poor people who lack options and have no choice but to shop there," I hear you say.


Bullshit! This is fucking slavery we're talking about.


It's not that they don't have options, it's that their options require them to pay a slightly higher price than they might otherwise get at Wal-Mart. So what they're really saying is, they care more about saving a few dollars than they do about human rights. They care more about convenience than they do about human rights. They care more about buying a new TV and cheap sneakers and shitty patio furniture and an X-Box and whatever bullshit people buy at Wal-Mart than they do human rights.


Now, if you are so poor that you are literally only buying food and medicine and basic clothing on food stamps and social security at Wal-Mart - the barest of essentials to survive - then fine, you get a pass.


But most people aren't that bad off in America or other parts of the West. The rest of you have chosen to prioritize other things ahead of human rights and thus you have no moral ground to stand on. You have no right to claim you care about slavery when you yourself aren't willing to make a small sacrifice to your own comfort to end it. At that point, it's not Wal-Mart's problem, it's yours!!


It's your problem and you are culpable for continuing to prop up and financially endorse a company that commits such acts of evil. At that point, you are the one benefiting from the legacy of slavery in the here and now. If you're ok with that on your conscience, then fine. You do what you want. It's your money and this is still a free country. I'm not the government. I can't compel tell you what to do or where to shop. All I'm saying is, you don't get to complain about the results of greed without looking like a massive, self-serving hypocrite.


There have been times in my life when I was at subsistence levels of poverty, living hand-to-mouth, paycheck to paycheck, based out of a rooming house that by right should have been condemned, and still chose to go hungry for a day rather than stop by the local Wal-Mart to grab something cheap to eat because that's how dedicated I am to principles. This at a time when I could only get a part-time job cuz the economy was still so bad, walking home each night two hours as part of my commute, while also supporting someone else.


If I can do it, why can't the rest of you? My guess is, because most of you don't actually care. You say you do, you want people to think you do, but at the end of the day, your actions don't reflect that; and as a result of your cowardice, you will never achieve any real change in the world because you aren't willing to do all that is necessary. You value comfort and cheap shit over doing what is right.


Greed is not the sole dominion of the rich. The poor can be just as greedy. Greed is good, so long as it's voluntary. Greed is good so long as no one is harmed:


Having worked in the private sector for many years, including for several large corporations (all of which you'd recognize their names if I told you), I can tell you first hand there is great financial incentive for these corporations to do the right thing if ... and this is the important part, the consumer is willing to hold their feet to the fire.


Note, I said the consumer, not the government.


As I stated earlier, the lifeblood of a corporation is profit, and profit depends upon reputation. As the 5th Law of Power admonishes, so much depends on reputation. In the age of social media, it's absurdly easy to destroy someone's reputation. Whether it's political scandal, the #MeToo movement, or the recent bathroom debacle with Starbuck, the people hold tremendous power in the palm of their hand such that we don't need government to do the job for us.


Nor should it, when we ourselves don't even have the conviction to stand by our own principles.


A company won't last long if it's not responsive to the needs of the consumer, and none are too big to fail. Just look at Facebook - a dying giant, because it abused its customers. The government didn't destroy it. It did that on its own. It we just leave the market alone and trust in the people to rally together and do the right thing, then in the end, these towering titans will all fall in line eventually.


Same with the issue of bigotry I brought up before. Why anyone would wanna work for or give business to a bigot is beyond me, but some people do. They often claim it's because their options are limited and they don't have a choice, but the reality is, much like with Wal-Mart and slavery, they do have a choice, it's just their choices are less convenient and they make different value judgments based on their priorities.


Competence is the great equalizer and the only color the free market sees is green. If a business is willing to shoot itself in the foot by not hiring a skilled woman of color, for instance, that business is free to do so ... and that business is free to fail, as it most likely will.


The market tends not to reward such pyrrhic victories, whereas protectionism does.


It's like with the gender pay gap. If businesses could get away with paying women less, there'd be no men employed, because that's how the financial incentives skew. Obviously, we don't have that problem. If anything, women complain about how hard it is to find a job and compete with men. You could say the male employers don't do that because they care more about sexism, but that's sort of my point. In a free society, the results will reflect what people actually value, not just what they say they value, whether that's money above all else or some other consideration.


A woman who works for a sexist is saying, "I am willing to put up with sexism because it's helping me pay my bills and advance my career." She has put survival ahead of social justice. A racist who sells to a black person is saying, "I am willing to ignore my own prejudices for the sake of profit." He has put survival ahead of bigotry.


It cuts both ways.


The moment you start setting top-down rules, you open yourself up to abuse of those rules and often they become inverted over time against their original intent. Where something like Affirmative Action was once seen as a way to help blacks get ahead, now it holds them back as people question whether that person got there on merit or just because they were airlifted into the position. Something like Title IX that protects against racial and gendered discrimination is now biting SJWs in the ass as straight white men invoke it. Or the Nazi cake following from the gay wedding cake.


Again, the lesson is, be careful what power you give government, lest it fall into the hands of your worst enemy and be used against you. In the free market, you don't have to worry about that.


I promise you, as surely as the law of gravity, that even the banks and the oil companies and the pharmaceutical companies and the bigots of the world are not immune to the law of supply and demand. The capitalist understands this. The socialist doesn't, and so they fall for the serpent's call to eat the forbidden fruit of State power, thinking it will give them godly power over corporations, when in fact they had that power all along. They were just too naive to see it and too weak-willed to use it.


You don't need government to be your savior. You have all the tools you need. Now stand and fight!


In the spirit of free market capitalism, you can support help independent creators like me through voluntary donations on Patreon. It really helps a lot and I appreciate your generosity.


If you're into politics, or even if you're not and just like a good fantasy novel - something truly original - you might also enjoy my book. You can even read the first few chapters online for free to try before you buy, because I'm awesome like that. Leaving a review on Amazon helps spread the word and keeps me responsive to the public.

May you each find love, peace, purpose, happiness, and will in your lives.




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