When philosophizing about the world, it is very important to define your terms. One term that is constantly misused is “capitalism.” Michael Moore, for example, in Capitalism: A Love Story, rants for an entire movie against the banking industry and profit motive in general, all under the broad term “capitalism.” The problem is that Moore never defines what he means by the term, and the end result of the film is that Moore pushes misnomers and misconceptions for the entire duration, making an educational opportunity into a hyper-slanted, unbelievable story of half-truth. It is clear the man never studied economics. Another example exists in the constant slandering of capitalism as driving our unnecessary wants and selfish desires. But consumerism and materialism are not capitalism (they are, in fact, relics of Keynesianism, a faux-socialist zombie of capitalism which assures us that the indication of economic growth is a rate of high consumption). What is capitalism?
Capitalism starts with the idea of property ownership as a human right. “Property? Capitalism is a system of the rich!” many say, already upset from just the one assertion. But before owning property in the outside world, you must own yourself. This is one of the most important ideas of capitalism and the free market, and it was a major argument for the abolition of American slavery by such men as Lysander Spooner. It is the main argument for libertarianism today, and the idea is reflected in arguments against the drug war (Why should the government tell you what you can put in your body?) and heavy rates of taxation (Isn’t working 5 months of the year to pay into government policies that you have no say in slavery?). After the principle of self-ownership, we have ownership of real and personal property as a right. If you put your labor into an object or to some monetary end, you should be able to keep the yield, or so the argument goes. Where this right is violated, libertarians argue, there if theft (since you own your property and it is taken unjustly) or again, slavery (since you own yourself and someone forcing you to work for them is wrong).
Capitalism is derived from these two ideas based on property. But it is an amorphous concept, since human choices vary to the degree that there are humans on earth. Capitalism is essentially freedom to do what you will with the fruits of your labor: to sell, to buy, to hold and save, to destroy, etc. Having free markets is essential to the growth of an economy (the imaginary aggregate of all of the exchange occurring at a particular time), and leads to the greatest growth in wealth of any economic system of thought – making the rich richer, but the poor rich faster than the rich. Hong Kong has stood as a bastion of capitalism for many years, with no minimum wage, no child labor laws, a flat tax of 15%, and very few barriers to entry in the market (regulations that prevent you from starting a business wherever, whenever, and however you want). As a result, Hong Kong has one of the most advanced infrastructures on the planet, both for the generation of wealth, and as a byproduct of that, as a social yield of the flat tax. Child labor was nearly eliminated in Hong Kong well before anywhere else could afford to pass laws to do the same. From personal experience, I can tell you that even their social services are very competitive and capitalistic – from trains, boats, taxis and buses galore for very little money; to once-tiny institutions of business that grew into empires.
I have to get to work now. But for now, there is a video that explains a bit more. I also would encourage you to go read some of Frederic Bastiat’s short sophisms such as That Which Is Seen and That Which Is Not Seen, or watch the youtube video Inequality, Consumption, and Happiness, both in “Meet Me Halfway.” Thanks for reading today.
As an etymology note, the term capitalism was coined by Karl Marx, the father of socialism and communism, to describe the system that uses capital (durable goods used to manufacture additional wealth) in private hands to produce for everyone. Under Marxist thought, the capital should be owned by the state and the proceeds dispersed in a social arrangement as opposed to privately…