In defense of capitalism

Most supporters of free market capitalism have traditionally upheld their beliefs along sound, practical lines. They argue that free market policies should be pursued because they provide the best returns for society. Adherents of this pragmatic school of capitalism are essentially devout utilitarians–people who believe in “the greatest happiness for the greatest number of people.”

Take the minimum wage issue, for example. On this politically sensitive issue, most free market pundits (economists and the like) argue that the minimum wage is best determined by natural market forces at work–in other words, by whatever the market will bear. Such experts argue that if the government raises wages too much, to a level above and beyond what the market could normally sustain, unemployment will inevitably result, since employers will then not be able to afford so many workers on their payrolls.

This pragmatic argument makes intuitive sense. We can all easily imagine what would happen to the U.S. economy if America’s minimum wage were suddenly raised to $200 an hour. Only a complete fool would argue that there would be no problem with such a policy.

So practical arguments for capitalism clearly make a great deal of sense. They point out the likely economic consequences of various government encroachments. But such arguments, while highly compelling, are still not nearly enough.

To properly advance laissez faire capitalism and bring about a freer, better world, we need to go deeper than merely looking at the immediate practical consequences of various economic ploys. We need to come to terms with the far more important moral dimension of capitalism.

Free market capitalism and free trade must be defended and advanced on forceful, unapologetic moral grounds. Those of us who believe in maximum liberty must defend capitalism from the rights-based school of philosophy. We need to be declaring that we own ourselves and are fully entitled to our private property rights.

For example, on the issue of free trade, sure, we could be saying stuff like “free trade creates jobs and tempers inflation.” Indeed, we may even proceed to back up our assertions with facts, charts, statistics, and cause-effect arguments. And we would, of course, be absolutely right and convincing.

But the far more important point is this: that we, as sovereign and free individuals, have the god-given, prima facie, inalienable right to trade with anyone we want, so long as the legitimate rights of others are not violated in the process.

On the minimum wage question, for example, we should be arguing that nobody but the individual owns his own labor–that he is not a slave to the state. The state does not own his labor and cannot properly tell him how much he should charge for his work.

In the same way that it would be preposterous for the U.S. government to tell Bill Gates, “I am sorry, citizen, but, by an act of Congress and the President, you cannot earn more than $100 million per year. We are setting a maximum cap on your annual income.”–it is also equally preposterous for the same government to declare,
“Sorry, citizen, but you are not allowed to sell your services for less than $6 an hour. You may give it out for free, if you want, but you may never sell it for less than $6 an hour. We own you. We are deciding what is good for you, citizen. You have no choice.”

We must keep pushing the moral argument for capitalism.