Morality and Capitalism: A Dialogue on Freedom by David Kendall

Author:David Kendall [Kendall, David]
Language: eng
Format: epub
Published: 0101-01-01T00:00:00+00:00

Part II: Capitalism

In a capitalist society, all human relationships are voluntary. Men are free to cooperate or not, to deal with one another or not, as their own individual judgments, convictions, and interests dictate. They can deal with one another only in terms of and by means of reason, i.e., by means of discussion, persuasion, and contractual agreement, by voluntary choice to mutual benefit.

Ayn Rand81

Chapter 6. What Is Capitalism?

Capitalism is what people do when you leave them alone.

Kenneth Minogue82

~ ~ ~

Tyro: Solon, I am puzzled.

Solon: That is a good thing, Tyro. Puzzlement is the beginning of wisdom. What is it that puzzles you?

Tyro: Today in school, our history teacher told us that some guy named Karl Marx wrote that capitalism is just a temporary evolutionary stage in human history that empowers the wealthy, exploits the working class, and keeps them poor. He also told us that socialism will eventually replace capitalism.

Solon: Why does that puzzle you, Tyro?

Tyro: Because our teacher also told us that America is a capitalist country. But most people in America are certainly not poor. It seems to me that America is one of the richest countries in the world, and that lots of other countries that are not anything like capitalist countries do have lots of poor people.

Solon: Perhaps your teacher does not know what capitalism really is.

~ ~ ~

Capitalism is a social system of political economy. In the words of Ayn Rand,

[A] social system is a set of moral-political-economic principles embodied in a society’s laws, institutions, and government, which determine the relationships, the terms of association, among the men living in a given geographical area. … Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.83

Milton Friedman, the preeminent Nobel laureate and defender of capitalism, offered the following description of capitalism:

A working model of a society organized through voluntary exchange, is a free private enterprise exchange economy—what we have been calling competitive capitalism.”84

Tens, if not hundreds of writers have proposed definitions and descriptions of capitalism.85 But in the end, the four essential, defining elements of capitalism are private property, voluntary exchange, freedom, and just law. To understand what capitalism is—what it really is and what it is not—we must explore the genesis, meaning, and implications of these four foundational elements of capitalism.

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