“”Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.
|The dismal "science"|
|More about economics|
Most people agree that it has been more productive than any other economic system the world has tried, and requires comparatively small amounts of centralized oversight to keep it from running out of control. However, critics of capitalism object to the fact that the benefits of this often fall disproportionately to the rich, pointing to persistent and in some cases growing material and social divides in capitalist societies, and believe that other economic systems are more just or can improve on capitalism.
In particular, capitalism is a far sight better than its predecessors, mercantilism and guilds, and has outlasted the idea of a command economy; it has also proven itself much more compatible with liberal social ideals than either of these systems. There is a body of academic literature that suggests that capitalism may in fact be a prerequisite for the growth of progressive social values, or at the very least something that can help with their spread. On the other hand, there have been plenty of countries that loosened economic restrictions while maintaining violations of political and civil rights, leading some observers to comment that it may be that capitalism is a necessary but not sufficient condition for political freedom.
 What exactly IS capitalism?
- The right for each person to have sacrosanct and untransferable ownership of his/her own mind and body;
- The exclusive right to do whatever he/she wishes with his/her own property.
This entails, in theory, that one does not have to work except on terms acceptable to him/her. However, this also means that employers do not have to provide work except on terms acceptable to them, so people are not free to set the terms of their employment and both parties must arrange a compromise that they both find acceptable. This concept of mutual benefit is an important idea in capitalist theory - the idea that no exchange will take place unless both parties benefit, barring fraud. This assumes that both parties to a contract have comparable amounts of social, political, and economic power, so it doesn't always pan out the way Milton Friedman promised.
While the exact origins of the private-property concept are hard to trace, it's widely recognized that capitalism developed pretty organically in the 18th century, possibly in popular response to Enlightenment philosophers such as John Locke. Feudalism and (later) mercantilism had protected ruling economic classes in Europe reaching back to the 9th century. Capitalism slowly undid these centers of power as entrepreneurs convinced landowners to invest in businesses enterprises, developed their own means of production, exploited the peasants for their cheap labor, and contributed to increasing standards of living.
Capitalism has trucked along, exploiting peasants and increasing standards of living into the present. There may have been a few people who disagreed along the way, but their country imploded so almost everybody has written off the idea of a complete alternative. Capitalism is also well known for inspiring such stoic and moral attitudes in the people who benefit from its fruits.
 Capitalist societies in history
No societies of notable size have allowed for complete laissez-faire (or "leave it alone") capitalism. Moreover, no mainstream economists now view this as an admirable state of being, and even ardent pro-capitalism economists view extreme minimization of the government as politically unfeasible. It became clear in the age of monopolistic trusts that, in a totally unregulated free market, there is nothing to keep the more powerful and wealthy from manipulating the economy. The effect of these manipulations is to close markets to competition and coerce workers into below-equilibrium wages, thereby making a total free market a far cry from "free". The question has instead become to what extent societies and markets should be regulated. Three examples of this tension follow:
- United States of America: The United States has long been viewed as one of the freest economies in the world. Despite some not-insignificant increases in government size since the more laissez-faire 19th century, the US still ranks highly in economic freedom. The United States is (for now) the largest economy in the world, producing roughly 23% of world GDP. Most economists believe it is the relative freedom to start a business, secure property rights and stable political environment that allow for this growth. Other commentators believe this success is due to aggressive imperialism in which the US government bullies, bombs, and intimidates other nations into giving up resources. Yet others point to the tremendous natural resources available on US territory as the reason for this wealth.
- Singapore: This tiny city-state is rated one of the economically freest countries in the world, and it has obtained considerable wealth despite its lack of natural resources. However, the state (also known as "Disneyland with the Death Penalty") has draconian social laws that run contrary to the theory of free-market capitalism, restraining (for example) free trade in chewing gum. Singapore is also considered state-capitalist, which is but a hair away from the dreaded s-word.
- Japan: Since the end of World War II, Japan has flourished as a capitalist nation striving for more economic expansion. Following rebuilding under the Marshall Plan, Japan was internationally viewed as a rising power and a model for other countries to emulate. However, as predictable capitalists, Japan went into a recession in 1990. Unfortunately, they never came out. It's hard to say exactly what is going on, but just to be safe capitalists are blaming old people and their social safety net.
 Capitalism and American politics
Conservatives and Republicans fancy themselves defenders of capitalism, or pretend they are for the sake of party unity. Though some right wing measures are indeed pro-free-market (e.g., offshore drilling, reduced spending, reduction of income taxes, deregulation), the fact is that conservatives and Republicans have been just as hostile to capitalism as liberals and Democrats. Examples of this include George W. Bush's tariffs on steel that could make a liberal economist cry, conservative think tanks coming up with crazy liberal ideas such as the individual health insurance mandate, and an ongoing war on drugs that seems counter-intuitive if you claim to believe that free-markets are great because people best know how to run their own lives.
In a similar vein, one could point out that Democrats have been as friendly to the free-market as have conservatives and Republicans, as seen in the Clinton administration's many neoliberal reforms, such as welfare reform and friendliness towards businesses.
 Capitalism and religion
Religious people involve themselves in politics all over the spectrum, usually claiming that God personally shares their political beliefs. For this reason, most of them are cranks and the powers-that-be appease them only as much as necessary to get their votes; hence, the Christian right's failure to bring in a theocracy.
Although there is a strong tradition of religious involvement in left-wing politics (e.g., the early Christian church vs. the Roman Empire, Liberation theology), in the United States most politicians who make religion an explicit part of their political identity are right-wingers and adhere to a form of Christianity that fits these beliefs.
This is ironic, because most of the particular policies that set the Religious Right apart from the secular right are contrary to the principles of free-market capitalism; however, knowing so would require reading and that's difficult. Capitalism is rooted in the Lockean notion of self-ownership and self-determination, and there is little evidence that Locke was implying the government should be used to stop gay people from getting married or teenage girls from aborting their pregnancy. Christians seem to want capitalism in that they want BMWs and leather bound Bibles, but if other people want to spend their money on cocaine and hookers then clearly freedom is going a little too far. Another layer of irony is added when you consider that Christ spoke out, in no uncertain terms, against what is considered today to be the core of capitalist doctrine. It took an act of staggering cognitive dissonance — helped along by the fact that, due to the influence of Marxism, anti-capitalist politics in the 20th century had become firmly associated with atheism — for Jesus to be portrayed as a long-haired version of Ronald Reagan. Seriously, anybody who has not had the joy of asking a wealthy fundamentalist to explain Matthew 19:24 to them should get down to their nearest Baptist Church immediately and start asking around. It's the most awkward fifteen seconds of half-remembered excuses. (Some, however, have actively attempted to reconcile theology and laissez-faire ideology as in the Reconstructionists' concept of "Christian economics.")
A truly free market, which is based on self-ownership as opposed to the doctrine that all people are the chattel property of God, is a Christian fundamentalist's worst dream; the only reason they sometimes pretend to defend it is because they can't spell "theocracy."
Max Weber, the pioneering sociologist, argued that Protestant religious sentiment (what he called the "Protestant work ethic") was a primary factor in the development of capitalism. Other people insist that this is wrong, and that Protestant religious sentiment was actually a primary factor in the development of capitalism — but only indirectly, through the increased literacy that it caused.
 Criticisms of capitalism
Ideologies like socialism, communism, and fascism are all categorically opposed to free-market capitalism for various reasons, such that it oppresses workers or spits in the face of tradition. Fascism, historically, kept in some facets of what it defined to be capitalism, such as formal private ownership (although vastly restricting what "ownership" means), while communism kept in some facets of what it defined to be capitalism, such as worker oppression.
Milder criticisms of unregulated capitalism are made by everyone except fanatical libertarians and anarcho-capitalists.
This stems from the observation that capitalism, at its heart, is about each person working to benefit themselves as much as possible, and without regulations to ensure that this benefit does not come at the expense of others, capitalism changes into something altogether different. Even the strongest proponents of capitalism among economists allow for government intervention to address, if nothing else, these kinds of negative externalities.
 Quotes about capitalism
"I could say to you that I have done more good for my fellow men than you can ever hope to accomplish --- but I will not say it, because I do not seek the good of others as a sanction for my right to exist." - Ayn Rand, extreme free-market devotee, Atlas Shrugged.
"With all its flaws, capitalism remains the most productive economic engine we have yet invented. Like Churchill's line about democracy, it is the worst of all economic systems, except for all the others." - Fareed Zakaria, Newsweek, June 22, 2009.
"Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate." - Bertrand Russell, Philosopher and mathematician.
"Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people." - Adam Smith, notable anti-capitalist.
"We are socialists, we are enemies of today’s capitalistic economic system for the exploitation of the economically weak, with its unfair salaries, with its unseemly evaluation of a human being according to wealth and property instead of responsibility and performance, and we are determined to destroy this system under all conditions." - Adolf Hitler, model anti-libertarian.
 See also
- Capitalism by George Reisman
- Capitalism explained
- "Capitalism has killed democracy"
- "The political economy of hunger"
- The shit we have to deal with everyday
- ↑ On the other hand, some of the least unequal states are those that practice modified versions of capitalism, such as the Nordic countries.
- ↑ Thomas Friedman referred to this as the "McDonald's Effect".
- ↑ http://www.nytimes.com/2009/01/25/business/25bernie.html?pagewanted=all
- ↑ http://www.youtube.com/watch?v=mzGDZ9nThro
- ↑ http://www.time.com/time/specials/packages/0,28757,2021097,00.html
- ↑ http://www.youtube.com/watch?v=pGRSDecufLk&feature=related
- ↑ http://www.heritage.org/index/ranking
- ↑ http://www.imf.org/external/pubs/ft/weo/2011/02/weodata/index.aspx
- ↑ http://www.heritage.org/index/ranking
- ↑ http://www.washingtonpost.com/opinions/japans-economic-crisis-is-a-cautionary-tale-for-the-united-states/2012/03/09/gIQAb8fx5R_story.html
- ↑ http://www.economist.com/node/17492860
- ↑ http://www.economist.com/node/1021395
- ↑ http://online.wsj.com/article/SB10001424052970204618704576641190920152366.html
- ↑ http://bible.cc/matthew/19-24.htm
- ↑ Sascha O. Becker and Ludger Wößmann. Was Weber Wrong? A Human Capital Theory of Protestant Economic History. Munich Discussion Paper No. 2007-7
- ↑ Snow Crash and Diamond Age in particular
- ↑ Notably Jennifer Government and Syrup
- ↑ A private statement made by Hitler on March 24, 1942. Cited in "Hitler's Secret Conversations." Translated by Norman Cameron and R.H. Stevens. Farrar, Straus and Young, Inc. 1953. p. 294.
- ↑ Sceptical Essays (1928), Chapter 13
- ↑ Wealth of Nations
- ↑ Hitler Quotation from Boston University Page