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Ask almost anyone to define “capitalism” to you and you will inevitably get a blank stare. If you try and push the question I suspect you’ll get people answering something like the way people are asked to identify “porn” … they can’t, but they know it when they see it. Except, of course, with capitalism, no one sees it and it certainly is not thrust upon anyone. You may call me guilty for not defining capitalism for you here or for my students, and maybe I will in due time explain why. It might be better to define capitalism by defining what it is not, or by defining its opposite, for your reference. And you should consider that it is not at all correct to define capitalism by searching for synonyms that you either like or dislike – such as democracy, anarchy, crony-ism, slavery. It is none of those things. And it is not sufficient to define capitalism by illustrating several features of capitalism – for they are likely neither necessary nor sufficient identifications. For example, under capitalism, we are very likely to see free labor markets, product markets and capital markets, but it is not at all the case that capitalism does not or cannot “exist” under much more regulated versions of (at least two) of those markets. Similarly, while you may be inclined to suggest that capitalism equals small government, again that is not at all a definition or a requirement. Capitalism can and has existed alongside with governments of many shapes, configurations and sizes.

One reason for the confusion is that people are prone to straw-manning ideas they do not like. Straw-manning is not the quite right term here, for it happens in both directions and in different forms. But here’s the point – if someone does not like corruption, and they see that in a world where there is corruption there also happens to be capitalism, then they are prone to arguing a weak-form argument against capitalism, “when we have capitalism, the forces of corruption are really unleased.” In some cases, you see a stronger form argument, and one I believe people are prone to because of mental substitutions, “capitalism IS corruption!” That latter of course is as silly as arguing that Wintercow IS a hockey stick.

For now, I do not wish to get into the psychology of anticapitalist beliefts, rather I’d like to take a more inquisitive tone. There seems to me to be a common perception that “capitalism is awful” or that it at a minimum has led to a state of the world that is undesirable. How  do I know this? I read hundreds and hundreds of student essays each year – the sentiment is spelled right out for me, and this is true even though students regularly try to blow smoke up my butt thinking that if they write something like, “capitalism is, like, um, so, awesome …” that this secures them an automatic A. What this really secures for them is a heavily marked-up paper with a poor grade that they never bother to pick up, yet complain about nonetheless – but I digress.

If there is a common thread among the serious intellectual arguments for why capitalism is awful, it really would (and does) focus on what changes have been wrought by capitalism (again even this line of questioning is awkward given that no one “installed” capitalism and chose it from among a panoply of options). To do this one would want to compare the world before anything like capitalism seemed to be happening to the world most of us live in today. And to make that comparison meaningful you’d have to first zero in on what changes, exactly, were caused BY capitalism itself. Remember a zillion things have happened under capitalism. For example, the rotation of the Earth has slowed each and every year since capitalism “started” … no serious person is going to argue that capitalism caused the Earth to slow down. My sense is that there are at least three basic observations made by people worried about capitalism, and each seems to be derived from a different (and perhaps unknowable) counterfactual and which I think change depending on the time period people focus on.

First, did capitalism CREATE NEW negative forces and features in the world that DID NOT EXIST PRIOR to capitalism?

Second, while there were clearly bad things going on in the world before capitalism, did the emergence of capitalism perpetuate or exacerbate the bad things that were going on?

Third, is capitalism awful because it is not awesome enough? In other words even though the world is unquestionably richer, people are living longer, material comforts are higher, and this is true for even the poorest people in the world, capitalism itself did not undo the world’s existing evil and perhaps it highlights, starkly, the evils from our past?

There are many other arguments of course that are not nearly as straightforward or logical, and we can ask similar questions about the various forms of government that are out there. Without answering the above three questions, I suggest that most people who are talking or arguing about capitalism are not asking those questions, and virtually no one is honestly answering them.

3 Responses to “Holiday Capitalist Inquisition”

  1. Gabriel Wittenberg says:

    I think the most important claim against capitalism is the question of what constitutes legitimate ownership of property, and what is property? I’m not sure if it’s useful to view the world as it is and say “capitalism contributed to this good/bad thing”. The detractors , at least in my view the ones to be taken seriously, attack the legitimacy of our property rights system. Does it matter that I exchange something that was taken with coercion, even if I had nothing to do with it being taken with said coercion, with someone who agrees to the exchange? So those who argue that capitalism causes global warming or promotes human trafficking are a waste of our time. With near certainty, these are the same people who would rather the Federal Government have more revenue for building more roads and airports to make transportation more affordable while increasing our emissions. The state is just as culpable as any sort of free exchange for our material prosperity and all of the emissions that go along with it.

  2. Doug M says:

    the rotation of the Earth has slowed each and every year since capitalism “started”

    The rotation of the earth has increased a few microseconds / year since 2004.

    What is capitalism? At a minimum capitalism requires private property and markets.

    Is capitalism good or bad? Capitalism is highly efficient. It is not necessarily equitable. And we can go on at length of whether this makes it inherently unfair, or whether it is in fact the only fair system. Or, we can argue that efficiency should trump “fairness.”

  3. Roger says:

    I would start by saying I think even calling it capitalism is misleading. Names matter.

    I would call it Free Enterprise. I would define it simply as a complex adaptive problem solving system involving the division of labor and voluntary exchange using mutually agreed conventions of decentralized property rights and contracts.

    The important measure of success is whether it solves more problems, better within its domain than alternative systems while creating fewer problems. This of course depends partially upon ones values, but history certainly reveals an admirable track record if considering prosperity, health, opportunity, flexibility, adaptability, peacefulness, trustworthiness, and such.

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