Capitalism – the System of Evil?
Much todo recently regarding capitalism. Apparently, there are those who view capitalism as a form of evil incarnate. From the Occupy Wall Street protestors to socialists, criticisms of capitalism range in flavors from it being the tool of elitists to affect wealth divide, to it being an economic system which relies on oppression of other systems and cultures worldwide. Let’s review capitalism and see how many of the various assertions are true.
First, know that capitalism is simply a type of economic system. It means that businesses are privately owned, as opposed to government run. Private businesses are driven by profit, and thus will try to maximize profits by increasing efficiency. The fact that the business owner profits from the business, seems to be what stems the largest criticism from socialists, who believe that the government should own and run everything. Karl Marx stated that people sell their labor to the business owner, which only augments the business owner’s profit, suggesting that the laborer gets nothing out of it. But is that true?
If you went to apply for a job and they said that they would pay you $1 an hour for your work, and that you would have to work 120 hours a week for them, would you take the job? – of course not. However, if a business offers you competitive wages along with fair labor practices, if you are like most Americans, you will take it. And why would you do so? – because you do get something out of it. You get money that you can use to purchase products that you want, from other businesses. You also hope that the price that you will pay for that product is low, based on that business having done its best to maximize efficiency and thus offer a quality product at an affordable price. If the price is too high, or the quality is too poor, the power of the buyer will effectively tell that business whether or not they can expect to remain in business. That is the true essence of capitalism. The business owner is just as beholding to the customer, (people who work at jobs), as the average person is to working for a living. Thus, Karl Marx is completely off base in his erroneous assertion that the laborer gets nothing in return. Apparently, he was thinking of the old days of kings, where the king’s subjects were at the mercy of their kingdom’s master.
One of the critics of capitalism relates to businesses trying to get as cheap of labor as possible – that is true. However, once again, ultimately the labor pool holds the power. If no one is willing to work for the wages a business is willing to offer, then that business will have to adjust its offering to compete. Laborers have much more power than critics seem to recognize, they just don’t seem to realize it nor exercise it.
But let’s not forget that the majority of businesses are small businesses, in which the owner is the laborer. The small business owner works very hard, often reaches success to the point that they hire others to help them, and rely on the free market for the success of their business. In a capitalist free market, everyone has the right to start a business and benefit from that business. In a purely socialist society, a person is told what job they will do by, and for, the government. In a capitalist society, a person has the right to buy property and a home of their choice. In a socialists society, a person is required to live in a government owned apartment, and told who will be their neighbors. Which of the two sounds more oppressive to you?
In a capitalist society, a person who succeeds, saves, invests well, etc, gain wealth. In a socialist system, a person is not allowed ownership, and thus has no avenue toward wealth. Yet, in a socialist society there are still those who hold power and wealth – iow, a socialist society still has its elitists who make the rules for everyone else. The only difference is, those who live in a socialist society have no avenue toward wealth unless they have an “in” with those who do hold the power, while the remainder of the population remains oppressed.
Capitalism offers incentives that other forms of economies do not. With private ownership and freedom of choice, one tends to take more pride in their work and in the property that they own. One need not look much further than government owned welfare housing to see what happens when a person is given free housing and a free livelihood with no expectation of labor in return. Such housing quickly becomes very shabby and run down. There is no pride in their dwelling, neighborhood, or standard of living. We have these examples because America is not purely a capitalist society, but rather a hybrid of capitalism and socialism. The benefactors of socialism are the welfare recipients and the free K-12 education available to every child.
Finally, to suggest that capitalism is the root of cross cultural problems is quite misinformed. There were wars between nations long before capitalism existed. There are religiously based political systems that conquer other lands for the sake of forcing their theology on other people. There are socialist nations that engage in political jousting with other nations with the intent of furthering their own nation. To blame capitalism for inter-national conflict is like blaming a child born today for the existence of the moon.
Capitalism, like all other forms of economic systems, has its issues. However, it is the only system that maintains a basis in human nature fact, and that is that a person is best encouraged toward achievement when they are able to receive a measurable reward for their efforts. Alternately, one either works for no reward, or the threat of death for not succeeding – and that is as oppressive as an elitist can act toward a non-free laborer.