This is Not Capitalism

 
This is Not Capitalism

Sometimes it is claimed that «capitalism kills children», «capitalism is the exploitation of people and the earth», and that «crises of capitalism kill».

Another common claim is that «capitalism is not governed by the ideals of freedom and prosperity, but by the constant pursuit of maximum profit». This is wrong, since capitalism revolves around the individual’s right to live and be free. The system does not require that one must «chase after maximum profits», but doing something more efficiently (profit = less effort for the same or a better result) is something that comes to us naturally. Evolution as a whole is all about steadily increased efficiency.

Even so, there are companies that run roughshod over or destroy resources for others, and Wall Street with its close ties between the bank and the government is the epitome of the bankrupt capitalist system, or?

This is not capitalism, but rather corporatism, or so-called «crony capitalism» These are the systems that are often are criticized and called capitalism, but it is important to know that they are not the capitalism, for which liberalists argue.

A Mixed Form

Real capitalism implies full private ownership and minimal government that only takes care of the military, the judiciary, and the police. On the other hand, the type of «capitalism» that is often criticized is a form of mixed economy.

Thus, a system involving the state distributing the pros and cons («benefits and burdens»), a central bank, government bailouts to banks facing bankruptcy, lobbying activities to obtain tax money for one’s particular organization or interest group, and lack of respect for private property is not capitalism.

In fact, it does contain elements of both capitalism and socialism, but in that case, the system is called corporatism or crony capitalism – meaning a form of mixed economy and social democracy.

Summary

  • Capitalism is often criticized unfairly
  • Critics are really referring to corporatism and «crony capitalism»
  • Capitalism represents protection of individusl rights
  • Capitalism does not represent mixed economy, financial monopolies, bailouts, and subsidies for companies that violate private property rights

Resources

 
 

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