Where Have All the Capitalists Gone?

Defending what is right--for the right reasons

I borrowed the title for this piece from economist Richard Salsman’s book, Where Have All the Capitalists Gone?: Essays in Moral Political Economy. I can’t recommend Mr. Salsman’s book strongly enough, so please buy it and read it. A central premise of Mr. Salsman’s book is that those who believe in freedom and capitalism need to show up. They must champion, defend, and promote capitalism on its moral basis, and that abandoning that moral basis is a sure strategy for losing the incredible opportunity, prosperity, and justice that is inherent in capitalism.

“Persistent animosity toward capitalism today rests on moral, not practical grounds. Unless rational self-interest is understood as the one moral code consistent with genuine humanity, and the moral estimate of capitalism thus improves, socialism will keep making comebacks, despite its deep and dark record of human misery.”-Richard Salsman

This article was further inspired by a quote from Steve Forbes in Reason that illustrates the point perfectly:

"Capitalism, free enterprise, free markets, whatever you call it," replies Forbes, "is a moral system because success comes from meeting the needs and wants of others….Go to the old Soviet Union, to Cuba, North Korea and compare opportunities. It's a reason people want to come here. They can flourish here whereas they get crushed by regulation elsewhere."

I’m a fan of Steve Forbes. He’s always been a quality thinker with good ideas and a good perspective.

What Steve notes is certainly correct: nothing meets human needs as effectively as capitalism.

However, there is a hidden package deal in this part of the quote: “capitalism…is a moral system because success comes from meeting the needs and wants of others [emphasis added].” This is a fatal philosophical flaw committed a thousand times a day by those who know capitalism is the only moral social system, as I’m sure Mr. Forbes does. It’s why good people continue to be attracted to the siren song of socialism that will leave them dashed upon the rocks of reality.

“Meeting the needs and wants of others” is an effect of capitalism, but that is not why it's moral. A proper morality has good effects. The mistake is to treat those consequences as the basis of the morality itself. Mr. Forbes's formulation replaces the cause with the effect, putting the cart before the horse. It is a utilitarian defense of capitalism rather than a moral one. In the long run, the moral argument always wins because every political philosophy ultimately rests on an underlying moral philosophy.

The moral is also the practical—that which can actually be practiced in reality with consistently positive results—because it is consistent with reality.

Capitalism is moral because it is based on individual rights and individuals pursuing THEIR OWN interests, not because they serve the needs of others. It is moral because of self-interest; because of egoism (the rational pursuit of one’s own happiness; not empty “egotism”). The fact that you must meet the needs of others in a trade for it to take place freely is true, and why capitalism is peaceful, harmonizing, and mutually beneficial, but you do it for your interests, for your life, for your achievement. And that is selfish. And it is moral. And everybody wins.

Human beings have a nature, certain attributes that make them human, as does everything in the physical world. Human beings, by their nature—according to the type of creature we are—must take self-interested, goal-directed action to survive, prosper, and flourish. To say our nature is inherently immoral makes morality impossible, and a successful human existence impossible. No amount of force or number of brutal socialist gulags would ever be able to change that. Life becomes struggle, becomes gray and dismal—the inevitable legacy of socialism.

Capitalism is moral because self-interest and individual liberty are moral and morally essential. Capitalism recognizes the individual's right to pursue his own rational self-interest. Rights are not moral because they produce prosperity. Prosperity results because rights are moral.

If, instead, serving the needs of others as a primary is what determines morality, then think of all the moral opportunity we gave slaves to serve others! Slavery was their salvation! The ultimate "otherism" versus self-interest! Slavery is the ultimate altruism!

Altruism is not simple kindness or generosity. It is the doctrine that the needs of others are morally primary over one's own life, and this is not the basis of morality. Taken consistently, it reduces the individual to a sacrificial offering to others.

Altruism is the basis of evil, of slavery, of sacrifice of others to oneself, and exploitation. That is the morality of socialism in every form, not capitalism.

Capitalists must give no quarter, make no apologies, and proudly defend what is right, what works, what is real.

As Ayn Rand wrote in Atlas Shrugged:

The world you desire can be won. It exists… it is real… it is possible… it’s yours.

But first we must stop giving it away, stop apologizing for it, stop rationalizing it, and start defending capitalism’s moral foundation with pride at every opportunity.