A Voice of Sanity – RobertRinger.com

The Moral Case for Capitalism

It is important to understand that capitalism is nothing more than a subcategory of freedom — the freedom to achieve financial success without government interference. If people are truly free, then, by definition, they must be free to enter into transactions with consenting adults.

Specifically, capitalism is the freedom to trade goods, services, and labor with other people and companies, free of government interference. True capitalism is unfettered and unregulated, which means that people are free to buy and sell whatever they please to anyone who, without being coerced, is willing to deal with them.

Contrary to the progressive’s belief that the government must regulate “greedy” entrepreneurs, the truth is that the market, through the law of supply and demand, is an infinitely more effective (and just) regulator than all of the politicians in the world combined. In fact, it would be accurate to say that the market can never be wrong. Why? Because it always rewards those who produce products and services at prices people are willing to pay.

The free market is, in fact, a giant hodgepodge of goods, services, labor, and capital coming together naturally and mixing with the unique wants, needs, desires, personality, and financial situation of each consumer. In other words, it is not a collective concept. On the contrary, it’s all about the individual and his desire to better his existence.

The Founders did not give the federal government the authority to “create jobs,” “get the economy moving,” or “strengthen the middle class.” These are nothing more than progressive euphemisms for increasing government power and crowding out entrepreneurs who create wealth, real jobs, and a fundamentally strong economy through the natural workings of the marketplace.

The belief that a president or Congress has the power to create private-sector jobs and legitimately stimulate the economy is ludicrous on its face, yet the vast majority of voters accept it as though it were a fact. The truth is that economic downturns are only prolonged by government intervention, because an important key to entrepreneurial growth of the economy is smaller, less intrusive government.

Greed

The dictionary defines greed as “an excessive desire to acquire more than what one needs or deserves.” But who has the wisdom, let alone the moral authority, to decide what someone else needs or deserves?

Since the words “excessive” and “more than what one needs or deserves” are subjective, what greed really means is possessing a desire to acquire. And, though it may ruffle the feathers of the progressive to hear it, the reality is that all human beings have an unlimited desire to acquire.

Normal people, however, realize that, due to limited time and resources, they must pick the things that are most important to them and be willing to let go of other items that are of lesser importance. That doesn’t mean they don’t want the items they don’t acquire. On the contrary, they may want them very badly. It just means that they want other items even more, and, thus, those are the ones they choose to buy.

But different people have different desires. One person might desire to acquire material wealth by providing products or services that people are willing to purchase from him. Another person might desire to acquire power over others by leading or joining a crusade of one kind or another. And still another individual might desire to acquire the respect of others through artistic achievements. Regardless of their objectives, all of these people are “greedy” in the sense that they have a “desire to acquire.”

The fact is that greed is neither good nor bad; it’s neutral. It is only the methods that a person employs to fulfill his desires (i.e., satisfy his “greed”) that are good or bad. Just as guns do not kill people, neither do greed or ambition, of and by themselves, harm anyone. However, some people do use greed and ambition to cause harm to others, just as some people use guns to harm others, and to that extent they — not greed itself — are immoral.

So long as you do not use force or fraud to acquire what you desire, you need not apologize for being “greedy” — and certainly not for any success you are able to achieve as a result of hard work and creativity.

The Myth of the Zero-sum Game

Contrary to popular belief, capitalism is not a zero-sum game. The idea of being forced to give up some of your pie assumes not only that the pie is fixed, but that there is only one pie. The inarguable truth, however, is that there is no limit to the number of pies that can be baked.

The only way to stop an entrepreneur from baking more pies is through force — usually government force. Lacking that, he will continue to bake pies that he believes people will like — and buy — and everyone will benefit from his “selfish” efforts.

What the progressive cannot seem to grasp is that when the entrepreneur creates wealth for himself, he creates value for others in the process. Or, to continue the metaphor, he increases the size of the pie.

Even though capitalism is the most moral economic system ever conceived, the progressive loves to paint those who believe in capitalism as greedy, selfish, and ruthless. And because we live in a country moving rapidly from soft socialism to hard socialism, advocating a laissez-faire capitalistic society is considered extreme. But, in truth, capitalism has done more to fulfill the needs and desires of people throughout the world than all of the efforts of all of the governments on earth combined.

The Marketplace

In a capitalistic society, a person has a right to be lazy. But under true laissez-faire capitalism, laziness would be the exception, because the marketplace doesn’t reward laziness. The marketplace rewards those who produce products and services that people want.

That is what capitalism is all about — what consumers are willing to buy and how much they are willing to pay for what they buy, not what politicians and government bureaucrats think they should buy and how much they think they should pay.

It’s also why capitalism is the eternal enemy of the progressive. If people are free to buy what they want from whomever they want, it prevents the progressive from using what he believes to be his superior intellect to make those decisions for them. The fact is that people’s choices about their purchases are nobody else’s business — including and especially the government’s.

Capitalism is not a static system. It is a robust system, always changing, always evolving. The free market really does work. It’s just not the way the progressive would like it to work, which is why the reality that unbridled capitalism is the best solution to poverty is a source of never-ending frustration for him. Even more frustrating is the fact that so-called trickle-down economics not only works, but works especially well for those at the lower end of the economic ladder.

It’s important to point out that it is the entrepreneur’s self-interest that is the driving force behind the success of capitalism. In his quest to be successful, the invisible hand of the marketplace guarantees — repeat, guarantees — that others will benefit from his efforts.

In fact, the entrepreneur is almost always the last person in a venture to realize financial benefits. Employees and vendors, among others, must be paid if he is to stay in business, and he must stay in business in order to have any hope of eventually turning a profit for himself.

Unfortunately, too many high-profile capitalists try to defend capitalism by arguing that capitalists are motivated by altruism; i.e., that a capitalist’s real desire is to help others, and, as a by-product, he, too, ends up benefiting financially. Whether such an argument is the result of ignorance or a lack of courage, it is patently untrue and misleads those who do not understand how capitalism works.

In truth, it’s the other way around. In order to achieve his financial objectives, the smart entrepreneur knows that he must create value for others. This is precisely what drives competition. Thus, many people benefit as a result of the entrepreneur’s pursuit of his own financial objectives.

While it is true that capitalism works best for the greatest number of people, that is not a moral justification for it. The moral justification for capitalism is that all men, no matter how rich or how poor, have a right to pursue their own economic well-being and enjoy all the fruits of their labor.

More specifically, all people have a right to trade their goods, their services, and their labor for any price they can secure in a free market, without interference from the government or anyone else. Freedom from all forms of coercion is a morally sound objective, regardless of whether or not the actions of free individuals benefit others. Fortunately, however, competition assures that consumers will benefit as a result of free-market activity.

Some people marvel at how far mankind has advanced in such a short period of time. But, in truth, what they marvel at is not a reflection of man’s true potential; it is his true potential minus government interference.

In a true laissez-faire economy — which has never existed on this planet — the entrepreneur would be able to create wealth on a scale that is impossible for the progressive to comprehend. It is hard to fathom where mankind might be today had government never been allowed to go beyond its original purpose of protecting the lives and property of its citizens.

One last but very important point: Under capitalism, every individual has a right to go as far as his talents and efforts can take him — and the exceptional individual has the right to be exceptional. What could possibly be more “fair” than that?