Capitalism: The Unknown Ideal

Is it unfair to punish success instead of failure? To punish innovation to reward stagnation, honor idleness at the expense of the diligent, and to burden the hard-working to carry along those barely working at all? If you answered yes to any of these questions, it is time to stop corroborating against and accepting the villanization of big business.

At the heart of capitalism is the recognition of individual liberties.In Capitalism: The Unknown Ideal,  Rand states that, “the social recognition of man’s rational nature-of the connection between his survival and his use of reason-is the concept of individual rights (Capitalism: The Unknown Ideal).”

Capitalism at its core appears to be a valuation system. A paradigm that gives societal objective values to everything from an idea to a piece of  fruit to a brand new car. Capitalism’s objective value, value that is external,  unlike intrinsic valuation or subjective, allows freedom to the individual. Intrinsic value is oftentimes placed on a pedestal; however, intrinsic value allows for worth to be completely relative without external justification. Objectives, goals, and missions which are deemed intrinsically valuable are pursued at the expense of citizens.

Statism makes the individuals nothing more than a commodity, and “the good of some men takes precedence over the good of others, with those others consigned to the status of sacrificial animals”(13). Animals value only is in what physical effort they can exert, beyond reason and intellectual ability.  

Capitalism leads to the greatest prosperity, growth, innovation, creativity, and eventually peace. Rand makes the strong claim that “Laissez-faire capitalism is the only social system based on the recognition of individual rights and, therefore, the only system that bans force from social relationships. By the nature of  its basic principles and interests, it is the only system fundamentally opposed to war”(33). Other systems try to gain prosperity by using individual’s resources to prop up or subsidize ideas at the expense of everyone. Only capitalism leads to prosperity by allowing individuals freedom to better themselves and through that process better all of society.

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6 thoughts on “Capitalism: The Unknown Ideal”

  1. Capitalism is the key to America’s success… it is the key to all of our successes. I totally agree with the author of this blog.

  2. Dear Sir-

    I’m very excited that you’ve found some time to post to your blog again! Your posts are always interesting, timely, and informative. Although I disagree with some of your sentiments about capitalism, I think your intelligence and expression contribute positively to the wider discussions that your posts are inherently involved in.

    1. Most Respected Sir-
      Thank you for taking the time away from your busy schedule full of formal academic pursuits to comment. You bring a sharp intellect and a courteous attitude to every discussion. Entering into the conversation in the market place of ideas is my motivation for writing so I eagerly await a time when we can discuss the sentiments you find disagreeable in more detail.

      1. Let me begin by stating that I am not here to hi-jack your blog in any way. I am simply engaging in the conversation your post is a part of. If you would prefer that we have these conversations in instant messaging, email, or snail mail (which I am sending you one tomorrow, but not on this topic) then feel free to remove this post and we can certainly continue this discussion in any way you prefer.

        That being said, I’ll attempt to describe why I disagree with some of your sentiments about capitalism. To begin, I’ll lay out a few broadly conceived notions that I hold about capitalism and then proceed into some of your specific points:

        First, I want to be very clear that I am not anti-capitalism any more than I am anti- any other socio-economic system. In other words, I do not believe there is a perfect socio-economic system that humanity has thought of. Due to the long historical record of inherent weaknesses within individuals (and groups of individuals) I am skeptical that there ever will be a perfect socio-economic system. In short, capitalism may be the best socio-economic system available; however, this does not mean that it is perfect or that other socio-economic systems are necessarily worse in all instances. For example, few people would say that Scandinavian countries, or Canada, operate in a system of pure capitalism yet these countries consistently rank among the most stable and their citizens the most happy.
        http://www.forbes.com/fdc/welcome_mjx.shtml
        http://www.prosperity.com/rankings.aspx

        Now on to some more specific points:

        “At the heart of capitalism is the recognition of individual liberties.”
        -One might compare this to how in communist theory every person is equal. However, there has never been a communist nation that turned this theory into practice. Communism, in practice, usually means that some people are more equal. Similarly, in theory capitalism may place every individual on a level playing field of opportunity but in practice, and therefore outside of the theory vacuum, this has been much more the exception than the rule. For instance, a person born with access to capital or with social connections to people with capital has much greater access to opportunity in capitalism that a person born without access to capital or social connection to people with capital. Furthermore, this is not necessarily an either/or scenario but a continuum of unequal access to capital and therefore to opportunity. Put another way, in capitalism access to capital means some people (and more and more likely, corporations) have more liberties than other people. For instance, corporations are now allowed to make unlimited donations to political campaigns while citizens are still limited.
        http://topics.law.cornell.edu/supct/cert/08-205

        “…it [capitalism] is the only system fundamentally opposed to war”
        -This is demonstrably false all throughout history. Capitalism must have ever-expanding markets to operate and historically this often leads to war. Some particularly revealing examples are found in the rhetoric surrounding the United States annexing the Philippines and wars (now called “The Banana Wars”) in Central America fought on behalf of a US Corporation, United Fruit Company. And these do not include the market expansionism that accompanied manifest destiny with its war on native peoples.
        http://www.jstor.org/stable/40401321?seq=3
        http://www.jstor.org/stable/494551
        http://www.amazon.com/Financial-Missionaries-World-Encounters-Interactions/dp/0822332191/ref=pd_sim_b_4
        http://en.wikipedia.org/wiki/Banana_Wars

        I think there is much more that could be said, but this is plenty long enough for now. I look forward to your thoughts.

    1. Debate Buddy-

      Your arguments are well thought out and your eloquence makes for quite a powerful presentation of your point of view. With the number of people reading this blog, it is fair to say that we are practically communicating via email, except with an occasional guest dropping by.

      I find myself divided over how to best address your broad, overarching notion that, “capitalism may be the best socio-economic system available; however, this does not mean that it is perfect or that other socio-economic systems are necessarily worse in all instances.” On one hand I agree that there is no such thing as a perfect socio economic system. I will go farther by saying that anything that is solely based on the wisdom and intelligence of man will be imperfect. I find the second part of your notion misplaced in that some socio-economic systems when implemented appear inherently immoral, ineffective, and inefficient. You might argue that the implementation is not a pure or non-contaminated form and yet routinely the implementation of communism (Soviet Union, China, Germany during the time of Bismarck) results in a similar outcome even thought the countries had distinct cultures, traditions, and the implementations occurred in different time periods. In each case the implementation resulted in the society being plagued with infringements of personal liberty, dictatorial leadership, illegitimate elections, significant downturns in economic output, technological advancement, decreased religious activity, depravity of artistic creation, declines in philanthropic giving, and the devaluation of human life. Instead of the individual being valued, the state takes on superior importance.

      Your point about how capitalism has given more liberty to corporations than individuals speaks to the need to get the tentacles of government out of so many different aspects of life. The very fact that government growth has the power to influence the success or failure of a business, and not the consumer is disgraceful. This is another strike against communism or statism (a system that I already feel is immoral). “A person born with access to capital or with social connections to people with capital has much greater access to opportunity in capitalism that a person born without access to capital or social connection to people with capital.”
      The great thing about capitalism is that it does not force people to fit into a certain mold. Instead it allows diversity to be a point of differentiation. This diversity brings innovations to market, changes consumer tastes, and profits because of the risk inherent in such an undertaking. So although a person might be born with access to capital or social connections this DOES NOT guarantee a path to success. The people who have access to an easy source of capital or social connections and can use nepotism are not guaranteed success in capitalism In fact, the opposite is often true. The challenges, adversity, and trials we go through and overcome provide the best capacity for success. We must avoid the mindset that a socio-economic systems value is in its ability to make everyone equal. Capitalism is the only system that I know of, to date, that does not squash opportunity in the name of equality, tolerance, or social utility.

      Communists put forth the idea that poor education + poor connection=a poor job, generally, and that through a communist economic system aptitude will be the measure of a man. The failure in communism is the decline of motivation, evaporation of rewards for risk, and the overwhelming force of mediocrity. I recently heard about a situation from a close relative who works in state government. He went to training to improve himself and to improve his skills which would overall positively impact his employer (the state); however, when a co-worker complained about him going to the training he was forced to stop attending. The co-worker felt it was unfair that he was going to training, when she wasn’t. Personal initiative is destroyed in the name of equality. We all should be equal to take our God given characteristics and use them in whatever way we see fit based on our moral ethic, circumstances, and ambition.

      “…it [capitalism] is the only system fundamentally opposed to war”

      This is demonstrably false all throughout history. Capitalism must have ever-expanding markets to operate and historically this often leads to war.

      The Banana Wars was more complicated than one corporation trying to protect its business. The United States government was trying to advance politics interests as well as protect the Panama Canal to ensure global influence and naval power. I’m not trying to minimize the fact that economics was a concern; however, it needs to be pointed out that it was far from the only influence. In major wars that have changed the world forever the cause has been a lack of freedom, nationalist tension, and dictators who had visions of greatness and world control. These world wars weren’t done to expand markets, but instead they were done at the expense of the majority of business. The owner of Great American Tours, Inc., said, “I’ve lost a lot of business due to the uncertainty of what is going on.” Wars which resulted from the idea of manifest destiny derive from government, not capitalism.
      Ayn Rand puts it succinctly suming up the idea that capitalism is the best path for those concerned about peace:
      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.
      I have rambled enough so i’ll stop for right now. I look forward to getting your snial mail. Talk to you soon buddy! This reminds me of our debating days. 🙂

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