Capitalism Needs a Socialist House to Live In

And why the economic propaganda of both Marxists and free-enterprisers should not be believed

by David Sims

AYN RAND (pictured) wrote that the purpose of government is to protect the rights of individuals by banning the initiation of force and thus “making all relations between men peaceful, i.e., free from the threat of violence and fraud.”

I see several problems with that idea.

First, rights themselves are implicitly socialist constructs: men are taxed in order to pay what it costs to protect them, and even Ayn Rand would have endorsed, in public at least, the idea that all men should have their rights protected equally. So implicitly, Ayn Rand and those who think as she did endorse the odd idea that capitalism needs a socialist house to live in.

Second, banning (or prohibiting) something isn’t the same thing as getting rid of it. A ban does not eliminate; it merely criminalizes. Which means that banning anything, including the initiation of force, gives criminals a market without competitors, except possibly the government itself. Banning drugs makes drug-lords and drug-smugglers and drug-pushers, and licensed pharmaceutical companies, rich.

Banning guns creates a black market for guns. Banning a book is one of the surest ways of making it popular and profitable to bootleg vendors.

Banning the initiation of force is similarly futile. Instead of running into the neighborhood bully a few times a week, you’ll meet, once each month or once each year, a professional killer who demands a “protection” payment.

Furthermore, banning the initiation of force corrupts the government, the guardians who have no guardians to oversee them, so that it becomes, sooner or later, merely the biggest criminal gang in the country, demanding the biggest payments from you in return for “protection.”

A capitalist will tell you that capitalism works all the time. He won’t tell you what the purpose of that work is, though. Is it to make people successful? No. Because that isn’t what capitalism does for most people. Capitalism “works” mainly to preserve capitalism. That says nothing about whether the system is worthwhile. The fact that it “works” doesn’t mean that by working it is doing anything good.

Besides, it isn’t really true that capitalism always works. Rather, it operates in such a way that it preserves itself until it has reached a natural limitation, such as the depletion of an irreplaceable energy source. When that happens, capitalism crashes, just as Marxism does. And for the same reason. Capitalism has a commons, too: the whole world.

Capitalism eats the world, and it excretes waste into the world, carefully placing that waste where the obscene sight and smell of it won’t bother the elite that most benefits from capitalism. Although it takes time, the tragedy of the commons eventually catches up with the capitalists, just like it does, much more quickly, with the Marxists. Humans being what they are, you can expect capitalists to deny any similarity between themselves and yeast in a Petri dish until the crash comes, and then after the crash try to throw the blame elsewhere.

The law was made for man, and not man for the law, and the same thing is true of economic systems. The worth of a set of laws, a form of government, or an economic system is measured by the circumstances they bring into being, on how they affect people.

But neither laws nor economic systems need treat every person equally in order to be moral. In fact, that might be immoral, depending on how equal treatment affects the survival prospects of the group involved. Rather, both laws and economic systems should treat people as they deserve to be treated, and what someone deserves is partly determined by his inborn human quality, what he might become able to do, what genetic worthiness he might transmit to his children.

The rest of what determines what he deserves is what he personally does with that quality, but what he is physically is also to be considered when judging his worth. We’ve all heard the old saying that “pretty is as pretty does,” but that’s not entirely correct. Although right behavior shows an important part of a person’s quality, it is not the whole thereof.

Pick any economic system you wish, and there will be a period of time, in the course of its evolution, when it works such that most people are satisfied with their circumstances. Marxism has this period near its beginning, before the tragedy of the commons begins to rot the commonweal. Capitalism has it around the middle, after the early tooling up, but before the concentration of wealth into the hands of a few causes the decline of the middle class. The apologists for each form of economy like to refer to this golden era as proof of the efficacy of their favored system. Each of them is prattling propagandist hogwash.

It does not matter, in the end, how unearned wealth accumulates; the only thing that does matter is whether it does. The legal inheritance of wealth in capitalism and Marxist-socialist consolidation of wealth in the state lead to exactly the same final conditions: privilege for a few, slavery for the many, and in neither case does the allocation of resources promote the increase, or even the preservation, of human quality.

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Source: David Sims