“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. The only function of the government, in such a society, is the task of protecting man’s rights, i.e., the task of protecting him from physical force; the government acts as the agent of man’s right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.” — — AYN RAND
Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.
Under capitalism the state is separated from economics (production and trade), just like the state is separated from religion.
Capitalism is the system of laissez faire. It is the system of political freedom.
It is to protect rights that governments are instituted. A proper government’s only responsibility is to protect the rights of the individual, by banning the initiation of force, thus making all relations between men peaceful, i.e., free from the threat of violence and fraud.
In a political context, freedom has only one specific meaning — freedom from the initiation of force by other men. By initiation I mean those who start the use of force to achieve their ends, i.e., a bank robber. Only the initiation of force against a man can stop his mind, thus rendering it useless as a means of survival. Only by the initiation of force can a man be: prevented from speaking, or robbed of his possessions, or murdered. Only through the initiation of force can a man’s rights be violated.
The Nature of Government by Ayn Rand
An advocate of laissez-faire is known as a capitalist, e.g., novelist Ayn Rand is a capitalist; e.g., though economically Engels came from a wealthy background, politically he is recognized as a socialist/communist because of his ideas; e.g., billionaire Warren Buffet and George Soros are not capitalists as they do not advocate capitalism, but variants of statism. Soros like Ted Turner is a “socialist at heart.”
All social systems have competition, the only difference is that in capitalism, all such competition for economic power results in the creation of wealth, whereas in collectivist societies such competition for political power results in the destruction of wealth.
Under capitalism, competition is an economic process where men do not compete to put down others, but to raise their self up by creating values which are potentially unlimited, and raising their competitors up in the process.
Under all collectivist systems competition is a political process where men compete not to create values, but to lobby or kill for positions of political power which they can use to legally extort the wealth of their fellow men.
A capitalist system is a republic and not a [pure] democracy. It is a system of checks and balances so ordered to protect the rights of the individual, from criminals and most importantly from the democratically elected voices who claim to speak for the “public good.” It is a limited “democracy”.
For those who are confused by the issue, the essential point is this: is it right for another man to rape, rob and murder another? Capitalism says never; democracy says yes — if the majority wills it.
No. The nationwide cycle of “booms” (major bull markets) followed by “busts” (major depressions), are the result of the only agency that has the power to act on a nationwide scale: the government.
If “exploitation” means increasing the standard of living of the masses, tripling the life span of the average man, and bringing wealth and prosperity to all those who live under it, then capitalism is a system of “exploitation.” If “exploitation” means making the masses slaves — then I refer one to Nazi Germany, the Soviet Union and Communist China.
If capitalists “exploited” the masses by stealing their “surplus”, as the Marxists allege, where was this “surplus” before capitalists existed? If not for capitalism, many of the masses you cry about would not exist — capitalism did not create poverty it inherited it.
“It is . . . by reference to philosophy that the character of a social system has to be defined and evaluated. Corresponding to the four branches of philosophy, the four keystones of capitalism are: metaphysically, the requirements of man’s nature and survival—epistemologically, reason—ethically, individual rights, politically, freedom.” — AYN RAND
Politics is not a primary. One’s politics depends on one’s ethics. Politics is the application of ethics to social issues. Ethics is the science — or branch of philosophy — that defines a code of values that one should live by. It answers the question: how one should live? Yet, neither is ethics a primary either. One’s ethics depends on one’s metaphysics (the branch of philosophy that studies the nature of reality, i.e., that which is) and one’s epistemology (the branch of philosophy that studies the nature and means of grasping reality, i.e., reason and logic).
In other words, one’s view of what is the proper social system for men to live together in, depends on how one views man, and the world he lives in — that is one’s view of politics is shaped by one’s philosophy — an integrated, systematic view of existence.
Capitalism is a political system that if based upon the wrong philosophical base, is like a towering skyscraper, built on quicksand. A philosophy today that provides a proper foundation for capitalism is Ayn Rand’s philosophy: Objectivism.
Freedom, under capitalism, has only one meaning: freedom from the initiation of force by others. In a political context, freedom means to live in a social system based on individual rights, or in practical terms, freedom has only one specific meaning — freedom from the initiation of force by other men. By initiation I mean those who start the use of force to achieve their ends, i.e., a bank robber. Only the initiation of force against a man can stop his mind, thus rendering it useless as a means of survival. Only by the initiation of force can a man be: prevented from speaking, or robbed of his possessions, or murdered. Only through the initiation of force can a man’s rights be violated.
No. A pure laissez-faire capitalist society has never existed. The closest any country has come to pure capitalism is 19th century America. Twentieth century America is not a pure capitalist country, but is a “mixed economy”: a mixture of freedom and controls. i.e., crippled capitalism, i.e., a hampered market economy.
“Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man’s well-being is not their goal.” — AYN RAND, “Theory and Practice,” Capitalism: The Unknown Ideal, 136
Capitalism is the best — the ideal — theory, because to the extent that it is allowed to work, it works in practice.
Individualism is not opposed to a man living in society, so long as he is free from the initiation of force by others.
Individualism is only opposed to man living in society as a non-individual amorphous member of a collective, i.e., a slave. Individualism holds that it is much better for man to live on a deserted island, than to live in a society where he is nothing more than a pawn ready to be sacrificed to the altar of the “public good.”
As wealth is not a static quantity, to be looted and stolen, the wealth that you can earn is not affected by how much wealth someone else has, creates, or inherits. Since wealth is the result of man’s mind, as long as someone has a mind, and is left free to use it, wealth is his to create.
As the creation of wealth is not automatic, those who cannot manage their wealth, will soon lose it. As evidence of this fact witness what happens when a rich man passes on his money to a worthless heir — the heir soon loses it. Such is the meaning behind the popular American saying, “from shirtsleeves to shirtsleeves in three generations.”
No. Under capitalism ones wages depend on how much one can produce. That is why Michael Jordan — or a doctor — gets paid millions of dollars more then the minimum wage. It depends on how well and how much they produce. The reason why factory laborers receive more wages in America is because they are rendered more productive by productive use of capital.
“The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve “the common good.” It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice.” — AYN RAND
Capitalism is the moral system, since it is the only system that allows man to be virtuous — to pursue the good — by leaving him free to act by the use of his reason. Freedom to act is a precondition of morality. This is Capitalism’s moral justification.
No. As a secondary effect of allowing the creators and innovators of society freedom to create and produce, laissez-faire results in a society where progress is the norm, and the standard of living continuously rises. That capitalism serves the “public good” (properly defined as the sum of the good of all individuals) is true, though this is not its moral justification but is merely an effect of its cause: freeing the individual from the mediocrity of the collective, to live his own life as an end to himself.
Politics is not a self-evident primary. Politics is the result of the application of ethics to social issues. One’s politics depends on the more fundamental branch of philosophy called ethics (the branch of philosophy that helps man answer the question: what should I do?); and one’s ethics depends on the even more fundamental branch of philosophy known as metaphysics (metaphysics refers to the branch of philosophy that studies the universe; it asks: where am I?) and epistemology (the branch of philosophy that studies the nature and means of human knowledge; it asks: how do I know it?).
In other words ones view of what is the proper social system for men to live together in, depends on how one views man, and how he grasps the world he lives in — that is on one’s philosophy.
If a man’s basic philosophy is based on the idea that he lives in a world of miracles, where truth is a matter of revelation, and morality means sacrificing himself for the good of others, his politics will be very different from someone who thinks he lives in a world of cause and effect, that he can understand by the proper use of his mind, in order to achieve happiness.
To concretize this point, observe that if your philosophy is that of a Christian fundamentalist you believe that abortion is murder: a fetus has the right to live in a woman’s body irrespective of the woman’s thoughts on the subject. Life comes from God, and what God giveth let no man take away. If you are an Objectivist, abortion is an inalienable right, since the woman is an actual being — whose body belongs to her — and the fetus is a potential being — a part of the woman’s body — to be disposed of as the woman pleases. In other words, ones philosophical premises shape and determine ones political views.
Politics is an inseparable “branch” of the “tree” of philosophy. Separate a fruitful branch from the tree of a proper philosophy, and attempt to graft it onto dead, rotting oak that branch will wither, crumble, and die.
Capitalism is a political system that if based upon the wrong philosophical base, is like a towering skyscraper, built on a foundation of quicksand. That is what philosophy has to do with capitalism.
What Philosophy Is, and How to Study It by Leonard Peikoff
Objectivism: The Philosophy of Ayn Rand