"The modern grocery store is a marvel that we take for granted..."

While the humble supermarket gets a bad press from every political direction, Emma Camp reckons "the modern grocery store is a marvel that we take for granted..."

Markets are people too

[Hat tip Being Objectivist]

"Your needs don't automatically become claims on somebody else's effort"

"Capitalism says inequality can exist, but your needs don't automatically become claims on somebody else's effort. You produce, trade, improve yourself, or persuade others to help voluntarily. 

"Socialism teaches the opposite moral lesson: need itself creates an entitlement and someone else's success creates the corresponding obligation. Follow that premise far enough and failure never teaches self-reliance, it merely produces another person to blame and another demand to make."

~ Rock Chartrand

"None of us are greedy. It’s only the other fellow who’s greedy."

"Q: When you see the bad distribution of wealth, so few who have so much and so many who have nothing… did you ever have a moment of doubt about capitalism and whether Greed's a good idea to run on? 

"A: Well, first of all tell me: do you know of any society that does NOT run on greed? Do you think Russia doesn't run on greed? You think China doesn't run on greed? 

"And what is greed? None of us is greedy, of course. It's only the other fellow who's greedy.

"The world runs on individuals pursuing their separate interests. The great achievements of civilization did not come out of government offices. Einstein didn't build his theory on the order of a bureaucrat. Ford didn't revolutionise the automobile industry that way. The only cases in which the masses have escaped the kind of grinding poverty you're talking about -- the only cases in recorded history -- are those where they had capitalism and largely free trade. 

"If you want to know where the masses are worse off it's exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by free enterprise system.

"Q: But it seems to reward the ability to manipulate the system, not virtue. 

"A: And what does reward virtue? Do you think a communist commissar rewards virtue? You think a Hitler? Do you think American presidents reward virtue -- do they choose their appointees on the basis of the virtue of the people appointed, or on the basis of their political clout?

"Is it really true that political self-interest is nobler somehow than economic self-interest? 

"You know I think you're taking a lot of things for granted. And just tell me: where in the world are you going to find these angels who are going to organise society for us? I don't even trust you to do that, let alone myself."

~ Milton Friedman, in conversation with Phil Donahue

Poverty...

"For most of human history, poverty was normal. Prosperity is the strange achievement. 

"Young people should learn what made that achievement possible before they vote to destroy it."

~ Magatte Wade

The natural condition of humanity before capitalism expanded globally: Poverty

 

"In 1820, 94 out of every 100 people lived in extreme poverty. Forty-three children out of every 100 died before the age of five. Eighty-eight adults could not read. Not a single person was vaccinated against diphtheria, whooping cough, or tetanus.

"That was the natural condition of humanity before capitalism expanded globally.

"Two centuries later, those numbers are 10 people in extreme poverty, 4 child deaths per 100, 85 who can read, and 86 vaccinated. The world's population grew nearly eightfold during that period, and the number of people living in misery fell in absolute terms.

"The explanation lies in the mechanisms capitalism introduced at global scale. The price system began allocating resources to where they were most valued. Property rights gave people a reason to innovate, invest, and save. Free trade connected regions that had been isolated from one another, generating mutual gains where precarious self-sufficiency had existed before. Together, these mechanisms made wealth creation a continuous process.

"No other economic system in human history has produced this result. Socialism promised equality and delivered scarcity. Feudalism kept the majority trapped in subsistence for centuries. Capitalism was the only one that raised the floor for everyone."

~ Students for Liberty [Data: OurWorldInData]

"'Real Socialism' has never been tried in the same way that 'Real Capitalism' has never been tried. 

"The difference is 'Almost Socialism' resulted in the impoverishment & death of hundreds of millions of people. 

"While 'Almost Capitalism' has lifted billions from absolute poverty."

~ Mark Antro

Lies, Damn Lies, and the History of Capitalism

Modern historians have rarely told the truth about the history of capitalism, especially about the early days of the Industrial Revolution. In this Guest Post, Wanjiru Njoya reckons it's time to set the record straight...

Lies, Damn Lies, and the History of Capitalism
by Wanjiru Njoya

Mark Twain popularised the phrase, “There are three kinds of lies: lies, damn lies, and statistics.” It could equally well be adapted to depict the role of socialist narratives taught as “history”—narratives that wreak even more economic havoc than outright lies. Lies can be debunked with facts, but socialist narratives appeal to political and moral ideologies that are less easily dislodged once they take root.

The socialist view of economic history teaches that capitalism is based on exploiting the poor. It alleges that Western nations are rich due to colonising the Third World. As the economist Peter Bauer observed:

The principal assumption behind the idea of Western responsibility for Third World poverty is that the prosperity of individuals and societies generally reflects the exploitation of others.

The industrial revolution is said to have been powered by theft from poor countries, with white nations acquiring wealth by subjugating other races. Bauer details the essential facts proving these beliefs to be false. He also identifies some of the reasons why these types of anti-capitalist narratives are so influential, arguing that “acceptance of emphatic routine allegations that the West is responsible for Third World poverty reflects and reinforces Western feelings of guilt.”

These guilt narratives, which masquerade as “historical facts,” are more pernicious and more difficult to defeat than blatant lies because, much like statistics, they are assumed to be objective and factual—even when they bear no relationship to the truth. Bauer describes them as “not only untrue, but more nearly the opposite of the truth.”

These myths have fed the prevailing tendency to view “capitalism” as a catch-all phrase denoting cruelty to the less fortunate. In his book Capitalism and the Historians, Hayek explains that this hostile view of capitalism is based on false history:

Who has not heard of the “horrors of early capitalism” and gained the impression that the advent of this system brought untold new suffering to large classes who before were tolerably content and comfortable? We might justly hold in disrepute a system to which the blame attached that even for a time it worsened the position of the poorest and most numerous class of the population. The widespread emotional aversion to “capitalism” is closely connected with this belief that the undeniable growth of wealth which the competitive order has produced was purchased at the price of depressing the standard of life of the weakest elements of society.

That this was the case was at one time indeed widely taught by economic historians.

Hayek argued that despite the “thorough refutation of this belief,” it has not lost its influence—“Yet, a generation after the controversy has been decided, popular opinion still continues as though the older belief had been true.” He warned that this “socialist interpretation of history,” and in particular economic history, had “governed political thinking for the last two or three generations.” Like Bauer, he emphasised that it has no basis in truth:

Most people would be greatly surprised to learn that most of what they believe about these subjects are not safely established facts but myths, launched from political motifs and then spread by people of good will into whose general beliefs they fitted. . . most of what is commonly believed on these questions, not merely by radicals but also by many conservatives, is not history but political legend.

These political legends are depicted as merely descriptive of historical reality. Hayek attributed this in part to the claim of some historians to be objective:

One reason for this probably is the pretension of many modern historians to be purely scientific and completely free from all political prejudice. . . . There is indeed no legitimate reason why, in answering questions of fact, historians of different political opinions should not be able to agree. But at the very beginning, in deciding which questions are worth asking, individual value judgments are bound to come in.

Lacking a huge amount of time for independent study, many people rely on historians for factual analysis. When professional historians push their ideology over as “history” their readers are often none the wiser. Hayek saw this as a major reason why socialist ideology had become entrenched:

The remarkable thing about this [socialist] view is that most of the assertions to which it has given the status of “facts which everybody knows” have long been proved not to have been facts at all; yet they still continue, outside the circle of professional economic historians, to be almost universally accepted as the basis for the estimate of the existing economic order.

Why are false claims that have “long been proved not to have been facts at all” still taught as historical reality? It is not necessarily because socialist historians deliberately try to promote their own ideology—although that is sometimes the case. The more serious issue is failure to appreciate that interpretation of history requires selection and interpretation. As Hayek put it, value judgments necessarily influence historical interpretation:

And it is more than doubtful whether a connected history of a period or a set of events could be written without interpreting these in the light, not only of theories about the interconnection of social processes, but also of definite values—or at least whether such a history would be worth reading.

Further, the dissemination of historical narratives is not confined to formal study. When a historical narrative is dominant, in the manner described by Hayek, it is embedded as part of the general culture and generally accepted as being “obviously true.”

. . . it is via the novel and the newspaper, the cinema and political speeches, and ultimately the school and common talk that the ordinary person acquires his conceptions of history. But in the end even those who never read a book and probably have never heard of the names of the historians whose views have influenced them come to see the past through their spectacles.

Hayek emphasised the importance of getting the facts right, as “we can hardly hope to profit from past experience unless the facts from which we draw our conclusions are correct.” And one could certainly provide the detractors of capitalism with the facts about productivity and economic progress. Bauer’s work on economic development is a great resource for that purpose.

But it is not a simple matter of presenting the facts. Given people’s prior understanding of what they assume to be meant by “capitalism,” which reflects the commonly accepted narratives, any defense of capitalism merely reinforces their moral and ideological objection. Such defenses seem to be saying “yes, the rich brutally exploit the poor, but it’s worth it.”

To illustrate this point, take the example of Bauer’s observation that colonialism in fact introduced economic progress. He explained:

In the early 1890s there were in the Gold Coast no railways or roads, but only a few jungle paths. Transport of goods was by human porterage or canoe. By the 1930s there were railways and good roads; journeys by road required fewer hours than they had required days in 1890. In British West Africa public security and health improved out of all recognition over the period. Peaceful travel became possible; slavery, slave trading and famine were practically eliminated, and the incidence of the worst diseases greatly reduced.

You would expect that to settle the matter for anyone who is genuinely concerned with the facts. But, on the contrary, socialists respond with yet more mockery —“just because you built railroads does not mean colonial brutality was acceptable.” They miss the point entirely, because they cling to their erroneous view of what capitalism is in the first place. Propaganda is based on false ideology and cannot be displaced by highlighting the facts. The underlying ideology itself must be countered: pointing out that capitalism itself is the only system allowing wealth and riches to be attained without exploitation, that the trader principle of capitalism allows each party a win-win, and that it is the only political system protecting an individual's rights.

Nor is it enough to inform people of the correct definition of capitalism, because socialist ideology cannot be displaced by semantic debates. Rather than merely informing socialists that they do not understand what “real” capitalism is, it is necessary also to defeat the underlying ideology, by defending the foundational principles of civilisation—private property, individual liberty, voluntary exchange, and limited government.

* * * * 

Dr. Wanjiru Njoya is the Walter E. Williams Research Fellow for the Mises Institute, and the author of Economic Freedom and Social Justice (2021), Redressing Historical Injustice (2023), “You Stole Our Land: Common Law, Private Property, and Rothbardian Principles of Justice” (2024) and “Individual Liberty, Formal Equality, and the Rule of Law.”
    Dr. Njoya earned her Ph.D. in Law from the University of Cambridge (UK) and taught law for over 20 years at a number of UK universities, including the University of Oxford and the London School of Economics.

    Her article previously appeared at the Mises blog.

Should we end capitalism? Or embrace it.

"Capitalism ... has been, blamed for various ills, from poverty and income inequality to pollution, inflation, child labour, and war. ... Capitalism is misunderstood because it is often confused with today’s mixed economy that combines varying degrees of economic freedom and statism. Statism gives the government unlimited power that it uses to tax, regulate, and subsidize individuals and businesses and to hand out favors (government contracts, lower tax rates, subsidies) to companies that make political contributions and do the government’s bidding.

"Because of this confusion, people blame capitalism for problems caused by the mixed economy and statism in particular.

"Consider poverty and income equality. Poverty is most persistent in countries where the government deters wealth creation through high levels of market controls, taxation, and corruption that constrain economic growth, entrepreneurship, job opportunities, and people’s ability to work themselves out of poverty and improve their incomes. The same can be said of child labour (a consequence of poverty), inflation (caused by government manipulation of the money supply, not by business seeking to maximise profits in a free market), and war (caused by government invasion of another country).

"Capitalism does not cause the problems it is blamed for but provides solutions by safeguarding freedom. ...

"In Ayn Rand’s definition, “capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.” In such a system, the government’s role is limited to protecting individual freedom ... by deterring and punishing the initiation of physical force against others ... Under capitalism, the only way to get others to collaborate is through persuasion and voluntary trade.

"Although pure laissez-faire capitalism has never fully existed ... some historical periods and countries have approximated capitalism ... [Northern] America during the 19th century (the longest uninterrupted period of peace); England, France, and other European countries during the Enlightenment (that brought about the Industrial Revolution); Hong Kong (before China’s takeover); and smaller countries like Estonia (that liberalised their economies after the collapse of the Soviet Union).

"Capitalism is good for people and their environment because it produces and protects freedom, the social condition that human flourishing requires. ... [C]apitalism did not create today’s problems but has helped solve or reduce them. ...

"If we want human flourishing to increase, we must not reject and banish capitalism but embrace and defend it ... "

~ Jaana Woiceshyn from her post 'Should we end capitalism?'

"'Real Socialism' has never been tried..."

"'Real Socialism' has never been tried in the same way that 'Real Capitalism' has never been tried.

"The difference is 'Almost Socialism' resulted in the impoverishment & death of hundreds of millions of people.

"While 'Almost Capitalism' has lifted billions from absolute poverty."

~ Mark Antro

"Capitalism is the only system where the state’s role is servant, not master."

"Capitalism is the only system where the state’s role is servant, not master, limited to protecting rights and banning force and fraud. When it oversteps, that isn’t capitalism failing, it’s the state abandoning capitalism. 

    "In every other system, there’s no confusion: the state is master by design. 

    "And anarchism doesn’t escape this dynamic, without a rights-protecting state, power doesn’t vanish, it shifts to gangs and warlords. The real choice isn’t no master, but whether the state is master over men or servant to their rights."

~ Rock Chartrand

"Underlying most arguments against the free market is a lack of belief in freedom itself.”

“Indeed, a major source of objection to a free economy is precisely that it does this task so well. It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.”

~ Milton Friedman from his 1962 book Capitalism and Freedom

"The essence of capitalism's foreign policy is free trade ... "

"The essence of capitalism's foreign policy is free trade — i.e., the abolition of trade barriers, of protective tariffs, of special privileges — the opening of the world's trade routes to free international exchange and competition among the private citizens of all countries dealing directly with one another.
    "During the nineteenth century, it was free trade that liberated the world, undercutting and wrecking the remnants of feudalism and the statist tyranny of absolute monarchies."

~ Ayn Rand, from her 1966 article 'The Roots of War'

REMINDER: "Freedom, in a political context, means freedom from the coercive power of the state—and nothing else."

 

"Freedom, in a political context, means freedom from government coercion. It does not mean freedom from the landlord, or freedom from the employer, or freedom from the laws of nature which do not provide men with automatic prosperity. It means freedom from the coercive power of the state—and nothing else." 

~ Ayn Rand, from her essay 'Conservatism: An Obituary,' collected in her book Capitalism: The Unknown Ideal. [See also 'Cue Card Libertarianism: Freedom']

 

Socialists once argued that socialism was superior to capitalism because it would deliver a higher standard of living and more consumer goods. When it became abundantly clear that this was bollocks, the socialists shifted their arguments and began to claim that socialism—while perhaps economically inferior—was superior morally and philosophically. And thus was born the post-modern denial of that outrageous success in human progress, and environmentalists' objection to it. 

Stephen Hicks writes about this in his 2004 book Explaining Postmodernism. Ludwig Von Mises was on to this a half-century before when he penned his short book The Anti-Capitalist Mentality, explaining why the intellectuals of his day so loathed the free market.... 

The Noneconomic Objections to Capitalism

by Ludwig Von Mises

1. The Argument of Happiness

Critics level two charges against capitalism: First, they say, that the possession of a motor car, a television set, and a refrigerator does not make a man happy. Secondly, they complain that there are still people who own none of these gadgets. Both propositions are correct, but neither casts blame upon the capitalistic system of social cooperation.

People do not toil and trouble in order to attain perfect happiness, but in order to remove as much as possible some felt uneasiness and thus to become happier than they were before. A man who buys a television set thereby gives evidence to the effect that he thinks that the possession of this contrivance will increase his well-being and make him more content than he was without it. If it were otherwise, he would not have bought it. The task of the doctor is not to make the patient happy, but to remove his pain and to put him in better shape for the pursuit of the main concern of every living being, the fight against all factors pernicious to his life and ease.

It may be true that there are among Buddhist mendicants, living on alms in dirt and penury, some who feel perfectly happy and do not envy any nabob. However, it is a fact that for the immense majority of people such a life would appear unbearable. To them the impulse toward ceaselessly aiming at the improvement of the external conditions of existence is inwrought. ... One of the most remarkable achievements of capitalism is the drop in infant mortality. Who wants to deny that this phenomenon has at least removed one of the causes of many people’s unhappiness?

No less absurd is the second reproach thrown upon capitalism — namely, that technological and therapeutical innovations do not benefit all people. Changes in human conditions are brought about by the pioneering of the cleverest and most energetic men. They take the lead and the rest of mankind follows them little by little. The innovation is first a luxury of only a few people, until by degrees it comes into the reach of the many. 

It is not a sensible objection to the use of shoes or of forks that they spread only slowly and that even today millions do without them. The dainty ladies and gentlemen who first began to use soap were the harbingers of the big-scale production of soap for the common man. If those who have today the means to buy a television set were to abstain from the purchase because some people cannot afford it, they would not further, but hinder, the popularisation of this contrivance. 

The inherent tendency of capitalism is towards shortening the interval between the appearance of a new improvement and the moment its use becomes general.

2. The Argument of Materialism

Again there are grumblers who blame capitalism for what they call its mean materialism. They cannot help admitting that capitalism has the tendency to improve the material conditions of mankind. But, they say, it has diverted men from the higher and nobler pursuits. It feeds the bodies, but it starves the souls and the minds. It has brought about a decay of the arts. Gone are the days of the great poets, painters, sculptors and architects. Our age produces merely trash. ...

'Fallingwater,' Frank Lloyd Wright, 1936

Among those who make pretense to the appellation of educated men there is much hypocrisy. They put on an air of connoisseurship and feign enthusiasm for the art of the past and artists passed away long ago. They show no similar sympathy for the contemporary artist who still fights for recognition. Dissembled adoration for the Old Masters is with them a means to disparage and ridicule the new ones who deviate from traditional canons and create their own.

John Ruskin will be remembered — together with Carlyle, the Webbs, Bernard Shaw and some others — as one of the gravediggers of British freedom, civilisation, and prosperity. A wretched character in his private no less than in his public life, he glorified war and bloodshed and fanatically slandered the teachings of political economy which he did not understand. 

He was a bigoted detractor of the market economy and a romantic eulogist of the guilds. He paid homage to the arts of earlier centuries. But when he faced the work of a great living artist, Whistler, he dispraised it in such foul and objurgatory language that he was sued for libel and found guilty by the jury. It was the writings of Ruskin that popularised the prejudice that capitalism, apart from being a bad economic system, has substituted ugliness for beauty, pettiness for grandeur, trash for art.

'Nocturne in Black and Gold: TheFalling
Rocket,' James McNeil Whistler, 1875

As people widely disagree in the appreciation of artistic achievements, it is not possible to explode the talk about the artistic inferiority of the age of capitalism in the same apodictic way in which one may refute errors in logical reasoning or in the establishment of facts of experience. Yet no sane man would be insolent enough as to belittle the grandeur of the artistic exploits of the age of capitalism.

The preeminent art of this age of “mean materialism and money-making” was music. Wagner and Verdi, Berlioz and Bizet, Brahms and Bruckner, Hugo Wolf and Mahler, Puccini and Richard Strauss, what an illustrious cavalcade! What an era in which such masters as Schumann and Donizetti were overshadowed by still superior genius!

Then there were the great novels of Balzac, Flaubert, Maupassant, Jens Jacobsen, Proust, and the poems of Victor Hugo, Walt Whitman, Rilke, Yeats. How poor our lives would be if we had to miss the work of these giants and of many other no less sublime authors.

Let us not forget the French painters and sculptors who taught us new ways of looking at the world and enjoying light and color.

Nobody ever contested that this age has encouraged all branches of scientific activities. But, say the grumblers, this was mainly the work of specialists while “synthesis” was lacking. One can hardly misconstrue in a more absurd way the teachings of modern mathematics, physics, and biology. And what about the books of philosophers like Croce, Bergson, Husserl, and Whitehead?

Each epoch has its own character in its artistic exploits. Imitation of masterworks of the past is not art; it is routine. What gives value to a work is those features in which it differs from other works. This is what is called the style of a period.

In one respect the eulogists of the past seem to be justified. The last generations did not bequeath to the future such monuments as the pyramids, the Greek temples, the Gothic cathedrals and the churches and palaces of the Renaissance and the Baroque. In the last hundred years many churches and even cathedrals were built and many more government palaces, schools and libraries. But they do not show any original conception; they reflect old styles or hybridise diverse old styles. Only in apartment houses, office buildings, and private homes have we seen something develop that may be qualified as an architectural style of our age. Although it would be mere pedantry not to appreciate the peculiar grandeur of such sights as the New York skyline, it can be admitted that modern architecture has not attained the distinction of that of past centuries.

The reasons are various. As far as religious buildings are concerned, the accentuated conservatism of the churches shuns any innovation. With the passing of dynasties and aristocracies, the impulse to construct new palaces disappeared. The wealth of entrepreneurs and capitalists is, whatever the anticapitalistic demagogues may fable, so much inferior to that of kings and princes that they cannot indulge in such luxurious construction. No one is today rich enough to plan such palaces as that of Versailles or the Escorial. The orders for the construction of government buildings do no longer emanate from despots who were free, in defiance of public opinion, to choose a master whom they themselves held in esteem and to sponsor a project that scandalised the dull majority. Committees and councils are not likely to adopt the ideas of bold pioneers. They prefer to range themselves on the safe side.

Side table by Eileen Gray, chair by Marcel Breuer

There has never been an era in which the many were prepared to do justice to contemporary art. Reverence to the great authors and artists has always been limited to small groups. What characterises capitalism is not the bad taste of the crowds, but the fact that these crowds, made prosperous by capitalism, became “consumers” of literature — of course, of trashy literature. The book market is flooded by a downpour of trivial fiction for the semi-barbarians. But this does not prevent great authors from creating imperishable works.

The critics shed tears on the alleged decay of the industrial arts. They contrast, e.g., old furniture as preserved in the castles of European aristocratic families and in the collections of the museums with the cheap things turned out by big-scale production. They fail to see that these collectors’ items were made exclusively for the well-to-do. The carved chests and the intarsia tables could not be found in the miserable huts of the poorer strata. 

Those caviling about the inexpensive furniture of the American wage earner should ... [realise that w]hen modern industry began to provide the masses with the paraphernalia of a better life, their main concern was to produce as cheaply as possible without any regard to aesthetic values. Later, when the progress of capitalism had raised the masses’ standard of living, they turned step by step to the fabrication of things which do not lack refinement and beauty. Only romantic prepossession can induce an observer to ignore the fact that more and more citizens of the capitalistic countries live in an environment which cannot be simply dismissed as ugly.

3. The Argument of Injustice

The most passionate detractors of capitalism are those who reject it on account of its alleged injustice.

It is a gratuitous pastime to depict what ought to be and is not because it is contrary to inflexible laws of the real universe. Such reveries may be considered as innocuous as long as they remain daydreams. But when their authors begin to ignore the difference between fantasy and reality, they become the most serious obstacle to human endeavours to improve the external conditions of life and well-being.

The worst of all these delusions is the idea that “nature” has bestowed upon every man certain rights. According to this doctrine nature is openhanded toward every child born. There is plenty of everything for everybody, they say. Consequently, everyone has a fair inalienable claim against all his fellowmen and against society that he should get the full portion which nature has already allotted to him. The eternal laws of natural and divine justice require that nobody should appropriate to himself what by rights belongs to other people. The poor are needy therefore only because unjust people have deprived them of their birthright. It is the task of the church and the secular authorities to prevent such spoliation and to make all people prosperous.

Every word of this doctrine is false. Nature is not bountiful but stingy. It has restricted the supply of all things indispensable for the preservation of human life. It has populated the world with animals and plants to whom the impulse to destroy human life and welfare is inwrought. It displays powers and elements whose operation is damaging to human life and to human endeavours to preserve it. Man’s survival and well-being are an achievement of the skill with which he has utilised the main instrument with which nature has equipped him — reason.

Men, cooperating under the system of the division of labour, have created all the wealth which the daydreamers consider as a free gift of nature. With regard to the “distribution” of this wealth, it is nonsensical to refer to an allegedly divine or natural principle of justice. What matters is not the allocation of portions out of a fund presented to man by nature. The problem is rather to further those social institutions which enable people to continue and to enlarge the production of all those things which they need.

The World Council of Churches, an ecumenical organisation of Protestant Churches, declared in 1948: “Justice demands that the inhabitants of Asia and Africa, for instance, should have the benefits of more machine production.” This makes sense only if one implies that the Lord presented mankind with a definite quantity of machines and expected that these contrivances will be distributed equally among the various nations. Yet the capitalistic countries were bad enough to take possession of much more of this stock than “justice” would have assigned to them and thus to deprive the inhabitants of Asia and Africa of their fair portion. What a shame!

The truth is that the accumulation of capital and its investment in machines, the source of the comparatively greater wealth of the Western peoples, are due exclusively to laissez-faire capitalism which the same document of the churches passionately misrepresents and rejects on moral grounds. 

It is not the fault of the capitalists that the poorer countries did not adopt those ideologies and policies which would have made the evolution of autochthonous capitalism possible. 

Neither is it the fault of the capitalists that the policies of these nations thwarted the attempts of foreign investors to give them “the benefits of more machine production.” No one contests that what makes hundreds of millions in these nations destitute is that they cling to primitive methods of production and miss the benefits which the employment of better tools and up-to-date technological designs could bestow upon them. But there is only one means to relieve their distress — namely, the full adoption of laissez-faire capitalism. What they need is private enterprise and the accumulation of new capital, capitalists, and entrepreneurs. It is nonsensical to blame capitalism and the capitalistic nations of the West for the plight the backward peoples have brought upon themselves. The remedy indicated is not “justice” but the substitution of sound, i.e., laissez-faire, policies for unsound policies.

It was not vain disquisitions about a vague concept of justice that raised the standard of living of the common man in the capitalistic countries to its present height, but the activities of men dubbed as “rugged individualists” and “exploiters.” The poverty of the backward nations is due to the fact that their policies of expropriation, discriminatory taxation, and foreign exchange control prevent the investment of foreign capital while their domestic policies preclude the accumulation of indigenous capital.

All those rejecting capitalism on moral grounds as an unfair system are deluded by their failure to comprehend what capital is, how it comes into existence, and how it is maintained — and what the benefits are which are derived from its employment in production processes.

The only source of the generation of additional capital goods is saving. If all the goods produced are consumed, no new capital comes into being. But if consumption lags behind production and the surplus of goods newly produced over goods consumed is utilised in further production processes, these processes are henceforth carried out by the aid of more capital goods. 

All the capital goods are intermediary goods, stages on the road that leads from the first employment of the original factors of production, i.e., natural resources and human labour, to the final turning out of goods ready for consumption. They all are perishable. They are, sooner or later, worn out in the processes of production. If all the products are consumed without replacement of the capital goods which have been used up in their production, capital is consumed. If this happens, further production will be aided only by a smaller amount of capital goods and will therefore render a smaller output per unit of the natural resources and labor employed. To prevent this sort of dissaving and disinvestment, one must dedicate a part of the productive effort to capital maintenance, to the replacement of the capital goods absorbed in the production of usable goods.

Capital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving.

Neither have capital or capital goods in themselves the power to raise the productivity of natural resources and of human labor. Only if the fruits of saving are wisely employed or invested, do they increase the output per unit of the input of natural resources and of labor. If this is not the case, they are dissipated or wasted.

The accumulation of new capital, the maintenance of previously accumulated capital and the utilisation of capital for raising the productivity of human effort are the fruits of purposive human action. They are the outcome of the conduct of thrifty people who save and abstain from dissaving, viz., the capitalists who earn interest; and of people who succeed in utilizing the capital available for the best possible satisfaction of the needs of the consumers, viz., the entrepreneurs who earn profit.

Neither capital (or capital goods) nor the conduct of the capitalists and entrepreneurs in dealing with capital could improve the standard of living for the rest of the people, if these noncapitalists and nonentrepreneurs did not react in a certain way. If the wage earners were to behave in the way which the spurious “iron law of wages” describes and would know of no use for their earnings other than to feed and to procreate more offspring, the increase in capital accumulated would keep pace with the increase in population figures. All the benefits derived from the accumulation of additional capital would be absorbed by multiplying the number of people. However, men do not respond to an improvement in the external conditions of their lives in the way in which rodents and germs do. They know also of other satisfactions than feeding and proliferation. Consequently, in the countries of capitalistic civilisation, the increase of capital accumulated outruns the increase in population figures. To the extent that this happens, the marginal productivity of labour is increased as against the marginal productivity of the material factors of production. There emerges a tendency toward higher wage rates. The proportion of the total output of production that goes to the wage earners is enhanced as against that which goes as interest to the capitalists and as rent to the land owners. 

To speak of the productivity of labour makes sense only if one refers to the marginal productivity of labour, i.e., to the deduction in net output to be caused by the elimination of one worker. Then it refers to a definite economic quantity, to a determinate amount of goods or its equivalent in money. The concept of a general productivity of labour as resorted to in popular talk about an allegedly natural right of the workers to claim the total increase in productivity is empty and indefinable. It is based on the illusion that it is possible to determine the shares that each of the various complementary factors of production has physically contributed to the turning out of the product. If one cuts a sheet of paper with scissors, it is impossible to ascertain quotas of the outcome to the scissors (or to each of the two blades) and to the man who handled them. To manufacture a car one needs various machines and tools, various raw materials, the labour of various manual workers and, first of all, the plan of a designer. But nobody can decide what quota of the finished car is to be physically ascribed to each of the various factors the cooperation of which was required for the production of the car.

For the sake of argument, we may for a moment set aside all the considerations which show the fallacies of the popular treatment of the problem and ask: Which of the two factors, labour or capital, caused the increase in productivity? But precisely if we put the question in this way, the answer must be: capital. What renders the total output in the present-day United States higher (per head of manpower employed) than output in earlier ages or in economically backward countries is the fact that the contemporary American worker is aided by more and better tools. If capital equipment (per head of the worker) were not more abundant than it was three hundred years ago, say, then output (per head of the worker) would not be higher. What is required to raise, in the absence of an increase in the number of workers employed, the total amount of America’s industrial output is the investment of additional capital that can only be accumulated by new saving. It is those saving and investing to whom credit is to be given for the multiplication of the productivity of the total labour force.

What raises wage rates and allots to the wage earners an ever increasing portion out of the output which has been enhanced by additional capital accumulation is the fact that the rate of capital accumulation exceeds the rate of increase in population. The official doctrine passes over this fact in silence or even denies it emphatically. But the policies of bureaucrats and labour unions clearly show that their leaders are fully aware of the correctness of the theory which they publicly smear as silly bourgeois apologetics. They are eager to restrict the number of job seekers in the whole country by occupational licensing and anti-immigration laws, and in each segment of the labour market by preventing the influx of newcomers.

That the increase in wage rates does not depend on the individual worker’s “productivity,” but on the marginal productivity of labour, is clearly demonstrated by the fact that wage rates are moving upward also for performances in which the “productivity” of the individual has not changed at all. There are many such jobs. A barber shaves a customer today precisely in the same manner his predecessors used to shave people two hundred years ago. A butler waits at the table of the British prime minister in the same way in which once butlers served Pitt and Palmerston. In agriculture some kinds of work are still performed with the same tools in the same way in which they were performed centuries ago. Yet the wage rates earned by all such workers are today much higher than they were in the past. They are higher because they are determined by the marginal productivity of labour. The employer of a butler withholds this man from employment in a factory and must therefore pay the equivalent of the increase in output which the additional employment of one man in a factory would bring about. It is not any merit on the part of the butler that causes this rise in his wages, but the fact that the increase in capital invested surpasses the increase in the number of hands.

All pseudo-economic doctrines which depreciate the role of saving and capital accumulation are absurd. What constitutes the greater wealth of a capitalistic society as against the smaller wealth of a noncapitalistic society is the fact that the available supply of capital goods is greater in the former than in the latter. 

What has improved the wage earners’ standard of living is the fact that the capital equipment per head of the men eager to earn wages has increased. It is a consequence of this fact that an ever increasing portion of the total amount of usable goods produced goes to the wage earners. None of the passionate tirades of Marx, Keynes and a host of less well known authors could show a weak point in the statement that there is only one means to raise wage rates permanently and for the benefit of all those eager to earn wages — namely, to accelerate the increase in capital available as against population. If this be “unjust,” then the blame rests with nature and not with man.

* * * * 

Ludwig von Mises (1881-1973) was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. Mises' writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. (Some cogent quotes here from the great man.)

This post previously appeared at the Mises Blog.

The Myth of Finite Resources

"Intellectuals, politicians, and journalists treat the idea that capitalism inevitably leads to ecological disaster as an unquestionable truth — ... that free markets cause the destruction of Mother Earth and that we must enact socialist policies to prevent an ecological doomsday scenario. But, what if I told you that economic facts do not buttress this hypothesis at all? And what if I added that an ingenious economist already proved the compatibility of capitalism and environmentalism as early as 1981? ...
    "One of the charges most frequently levelled against capitalism is that this social system must necessarily lead to ecological disaster. After all, the earth’s resources, the eco-socialist argument goes, are finite. Evil capitalists and greedy businessmen will gradually exploit non-renewables until we are doomed because we are out of natural resources. Karl Marx proposed this hypothesis as early as 1867 ...

"Inspired by Jean-Jacques Rousseau, Marx believed that the cause for ecological disaster is to be found in the introduction of private property rights. ... Rousseau and Marx’s solution to this alleged problem was the abolition of capitalism and property rights, a solution which has presently been voiced as vociferously as never before by the eco-socialists. ... While reading fairy tales and fables can certainly be an entertaining pastime activity, it is by now about time to return to reality ...

"In a free-market economy, the price of a resource is determined by its scarcity. If a resource becomes more abundant due to an increase in supply and/or a decrease in demand, its price will typically drop. If a given resource, vice versa, becomes more scarce due to a decrease in supply and/or an increase in demand, its price will usually rise. This change in scarcity and price, in turn, affects the behaviour of any rational market participant with an entrepreneurial mindset, producer and consumer alike. In his groundbreaking monograph, 'The Ultimate Resource,' American economist Julian L. Simon observes, 'Heightened scarcity causes prices to rise. The higher prices present opportunity and prompt inventors and entrepreneurs to search for solutions.' In a capitalist society, the depletion of a nonrenewable resource is prevented by three emerging patterns of behaviour, all of them caused by the increase in the resource’s price.
    "[Between them, rising prices and] the profit motive offer an incentive to the rational businessman to obtain and store more units of the nonrenewable resource in question. ... and to start developing substitutes for the nonrenewable resource in question ... [Meanwhile] the desire to economise motivates rational buyers to become less dependent on the nonrenewable resource in question. ...

"Ultimately, there is only one resource which is necessary to replenish all others, namely the human mind. It is for this reason that Julian Simon chose to name his groundbreaking study 'The Ultimate Resource.' 'The main fuel to speed the world’s progress,' he explains, 'is our stock of knowledge, and the brake is our lack of imagination. The ultimate resource is people—skilled, spirited, hopeful people—who will exert their wills and imaginations for their own benefit.' ...

"The eco-socialists are undoubtedly right in pointing out that the earth contains only a certain amount of nonrenewable resources in a fixed quantity. ...  More importantly, though, the eco-socialist errs in concluding that natural resources must be finite because the earth contains them in a limited quantity. Rather, in a free-market economy, as the resource becomes more scarce the price of the natural resource increases. Changes in producer and consumer patterns, in turn, prevent its depletion. In Simon’s words, 'Population growth and increase of income expand demand, forcing up prices of natural resources. The increased prices trigger the search for new supplies [or substitutes, and provides more human capital for the search and investigation.] Eventually new sources and substitutes are found.' ...

"The key economic problem of a socialist economy [however] is that the price of a resource will not rise if it becomes more scarce. Price ceilings effectively prevent an increase in price, thereby demotivating businessmen from increasing their production of non-renewables, and/or developing substitutes for them. The result, as can be witnessed in socialist countries all over the globe, are shortages and famines.
    "Thus, if people are truly concerned with the potential depletion of finite resources, they should start questioning their political convictions. The solution to preventing the exhaustion of the earth’s resources are not government controls but free markets and free minds. To paraphrase Ayn Rand, 'If concern with [the environment] and human suffering were the [eco-socialists]’ motive, they would have become champions of capitalism long ago; they would have discovered that it is the only political system capable of producing abundance'.”

~ Martin Hooss from his post 'The Myth of Nonrenewable Resources'

RELATED POSTS

• Why We Need Private Property to Deal with Scarce Resources - Patrick Barron, NOT PC
• Environmentalism Refuted - George Reisman, MISES DAILY 
• Some propositions on property rights – and IP - NOT PC

"Their wealth is not at the expense of others – it is by providing things of value"

"One-hundred years ago almost all the wealthy inherited their wealth. Today most billionaires become one through being entrepreneurs. They create something of value. ...
    "I don’t begrudge [the Mowbray family] that they are worth $20 billion. Their wealth is not at the expense of others – it is by providing things of value.
    "The left parties want to introduce an asset or wealth tax on anyone who gets too successful. Not content with taxing income, they want to redistribute assets also. But what do you think will happen if they ever succeed in NZ? I can tell you what – the Mowbrays will probably relocate somewhere and take all the income tax, company tax etc. they pay with them."

~ David Farrar, from his post 'A Kiwi success story'

UPDATE: Isn't it funny what massive success brings out of the woodwork. David Farrar's praise above for the Mowbray's non-sacrificial entrepreneurial success is in stark contrast to an envy-ridden screed about their success by failed former Labour minister Michael Wood, who skips quickly from suggesting their success shows New Zealand is "a little out of balance" [?] to calling for the government to tax the bastards.

Thomas Cranmer takes the oily former minister to task, making an excellent recommendation to remedy his thinking:

Mr Wood, of course, is a former Labour MP and Cabinet Minister who lost his seat – a relatively safe Labour one at that. Now as a union organiser – what a surprise – he carries on the collectivist messaging that characterises the Left. To understand the fundamental importance of individual effort and, as Ayn Rand put it "to show how desperately the world needs prime movers and how viciously it treats them" and "what happens to the world without them" Mr Wood might like to try reading Atlas Shrugged.
    I applaud the Mowbrays. I admire their initiative. I extol their entrepreneurship. I could not take the business risks that they obviously have to get to the position that they now are in. But that is not common for New Zealand nor is it common for the media to express unqualified praise for those who have done well. There is always a “Good on them, but….” And it is the “but” that evidences the Groupthink of the tall poppy syndrome which is an aspect of New Zealand culture that we could well do without and that Atlas Shrugged condemns.

 Damned right.

"Fascism and communism are not two opposites, but two rival gangs fighting over the same territory"

                                     

"It is obvious what the fraudulent issue of fascism versus communism accomplishes: it sets up, as opposites, two variants of the same political system; it eliminates the possibility of considering capitalism; it switches the choice of 'Freedom or dictatorship?' into 'Which kind of dictatorship?' — thus establishing dictatorship as an inevitable fact and offering only a choice of rulers. The choice — according to the proponents of that fraud — is: a dictatorship of the rich (fascism) or a dictatorship of the poor (communism).
       "That fraud collapsed in the 1940s, in the aftermath of World War II. It is too obvious, too easily demonstrable that fascism and communism are not two opposites, but two rival gangs fighting over the same territory — that both are variants of statism, based on the collectivist principle that man is the rightless slave of the state — that both are socialistic, in theory, in practice, and in the explicit statements of their leaders — that under both systems, the poor are enslaved and the rich are expropriated in favour of a ruling clique — that fascism is not the product of the political 'right,' but of the 'left' — that the basic issue is not 'rich versus poor,' but man versus the state, or: individual rights versus totalitarian government — which means: capitalism versus socialism."

~ Ayn Rand, from her article '“Extremism,” or The Art of Smearing' [hat tip Δημήτριος Τσίκας]

 

"The capitalist system was termed 'capitalism' not by a friend of the system, but by Karl Marx" [updated]

"The capitalist system was termed 'capitalism' not by a friend of the system, but by an individual who considered it to be the worst of all historical systems, the greatest evil that had ever befallen mankind. That man was Karl Marx. Nevertheless, there is no reason to reject Marx’s term, because it describes clearly the source of the great social improvements brought about by capitalism. 

    "Those improvements are the result of capital accumulation; they are based on the fact that people, as a rule, do not consume everything they have produced, that they save—and invest—a part of it. 

    "There is a great deal of misunderstanding about this ... [not least that] capitalist savings benefit workers.

"An often unrealised fact about capitalism is this: savings mean benefits for all those who are anxious to produce or to earn wages. When a man has accrued a certain amount of money—let us say, one thousand dollars—and, instead of spending it, entrusts these dollars to a savings bank or an insurance company, the money goes into the hands of an entrepreneur, a businessman, enabling him to go out and embark on a project which could not have been embarked on yesterday, because the required capital was unavailable.
    "What will the businessman do now with the additional capital? The first thing he must do, the first use he will make of this additional capital, is to go out and hire workers and buy raw materials—in turn causing a further demand for workers and raw materials to develop, as well as a tendency toward higher wages and higher prices for raw materials. Long before the saver or the entrepreneur obtains any profit from all of this, the unemployed worker, the producer of raw materials, the farmer, and the wage- earner are all sharing in the benefits of the additional savings.
    "When the entrepreneur will get something out of the project depends on the future state of the market and on his ability to anticipate correctly the future state of the market. But the workers as well as the producers of raw materials get the benefits immediately....
    "The scornful depiction of capitalism by some people as a system designed to make the rich become richer and the poor become poorer is wrong from beginning to end. Marx’s thesis regarding the coming of socialism was based on the assumption that workers were getting poorer, that the masses were becoming more destitute, and that finally all the wealth of a country would be concentrated in a few hands or in the hands of one man only. And then the masses of impoverished workers would finally rebel and expropriate the riches of the wealthy proprietors....
    "If we look upon the history of the world, and especially upon the history of England since 1865, we realize that Marx was wrong in every respect. There is no western, capitalistic country in which the conditions of the masses have not improved in an unprecedented way. All these improvements of the last eighty or ninety years were made in spite of the prognostications of Karl Marx.
    "We must realise, however, that this higher standard of living depends on the supply of capital. ... A country becomes more prosperous in proportion to the rise in the invested capital per unit of its population."

~ Ludwig Von Mises, from the collection of six of his lectures titled Economic Policy: Thoughts for Today and Tomorrow, and in Brazil under the title As Seis Lições (The Six Lessons) [hat tip Renato Moicano]

UPDATE:  Sad news just in that economic historian Robert Hessen has just died. David R. Henderson remembers him, and quotes from his contribution to the Concise Encylopaedia of Economics on Capitalism. 

"Capitalism,” a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Wealth of Nations).   Economic individualism’s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and profits; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international markets.

Here’s another great paragraph:

In early-nineteenth-century England the most visible face of capitalism was the textile factories that hired women and children. Critics (Richard Oastler and Robert Southey, among others) denounced the mill owners as heartless exploiters and described the working conditions—long hours, low pay, monotonous routine—as if they were unprecedented. Believing that poverty was new, not merely more visible in crowded towns and villages, critics compared contemporary times unfavourably with earlier centuries. Their claims of increasing misery, however, were based on ignorance of how squalid life actually had been earlier. Before children began earning money working in factories, they had been sent to live in parish poorhouses; apprenticed as unpaid household servants; rented out for backbreaking agricultural labor; or became beggars, vagrants, thieves, and prostitutes. The precapitalist “good old days” simply never existed (see industrial revolution and the standard of living).

And:

Despite these constraints, which worked sporadically and unpredictably, the benefits of capitalism were widely diffused. Luxuries quickly were transformed into necessities. At first, the luxuries were cheap cotton clothes, fresh meat, and white bread; then sewing machines, bicycles, sporting goods, and musical instruments; then automobiles, washing machines, clothes dryers, and refrigerators; then telephones, radios, televisions, air conditioners, and freezers; and most recently, TiVos, digital cameras, DVD players, and cell phones. ...

That these amenities had become available to most people did not cause capitalism’s critics to recant, or even to relent. Instead, they ingeniously reversed themselves. Marxist philosopher Herbert Marcuse proclaimed that the real evil of capitalism is prosperity, because it seduces workers away from their historic mission—the revolutionary overthrow of capitalism—by supplying them with cars and household appliances, which he called “tools of enslavement.”Some critics reject capitalism by extolling “the simple life” and labeling prosperity mindless materialism. In the 1950s, critics such as John Kenneth Galbraith and Vance Packard attacked the legitimacy of consumer demand, asserting that if goods had to be advertised in order to sell, they could not be serving any authentic human needs. They charged that consumers are brainwashed by Madison Avenue and crave whatever the giant corporations choose to produce and advertise, and complained that the “public sector” is starved while frivolous private desires are being satisfied. And having seen that capitalism reduced poverty instead of intensifying it, critics such as Gar Alperovitz and Michael Harrington proclaimed equality the highest moral value, calling for higher taxes on incomes and inheritances to massively redistribute wealth, not only nationally but also internationally.

Some Fundamental Insights Into the Benevolent Nature of Capitalism

Just what it says on the label--the book the heart of which F.A. Hayek reckoned
every "fully trained commentator ought to read if he wants to talk sense" [PDF copy here]

"By the 'benevolent nature of capitalism,' I mean the fact that it promotes human life and well-being and does so for everyone. There are many such insights, which have been developed over more than three centuries, by a series of great thinkers, ranging from John Locke to Ludwig von Mises and Ayn Rand. I present as many of them as I can in my book 'Capitalism.'
    "I'm going to briefly discuss about a dozen or so of these insights that I consider to be the most important, and which I believe, taken all together, make the case for capitalism irresistible. I'll discuss them roughly in the order in which I present them in my book. Let me say that I apologise for the brevity of my discussions. Each one of the insights I go into would all by itself require a discussion longer than the entire time that has been allotted to me to speak today. Fortunately, I can fall back on the fact that, in my book at least, I think I have presented them in the detail they deserve.

"1) Individual freedom—an essential feature of capitalism—is the foundation of security, in the sense both of personal safety and of economic security. Freedom means the absence of the initiation of physical force. When one is free, one is safe—secure—from common crime, because what one is free of or free from is precisely acts such as assault and battery, robbery, rape, and murder, all of which represent the initiation of physical force. Even more important, of course, is that when one is free, one is free from the initiation of physical force on the part of the government ...
    "The fact that freedom is the absence of the initiation of physical force also means that peace is a corollary of freedom. Where there is freedom, there is peace, because there is no use of force: insofar as force is not initiated, the use of force in defence or retaliation is not required. ...

"2) A continuing increase in the supply of economically useable, accessible natural resources is possible as man converts a larger fraction of the virtual infinity that is nature into economic goods and wealth, on the foundation both of growing knowledge of nature and growing physical power over it. ...

"3) Production and economic activity, by their very nature, serve to improve man's environment. This is because from the point of view of physics and chemistry, all that production and economic activity consist of is the rearrangement of the same nature-given chemical elements in different combinations and their movement to different geographical locations. The guiding purpose of this rearrangement and movement is essentially nothing other than to make the chemical elements stand in an improved relationship to human life and well-being. ...

"4) The division of labour, a leading feature of capitalism, which can exist in highly developed form only under capitalism, provides among other major benefits, the enormous gains from the multiplication of the amount of knowledge that enters into the productive process and its continuing, progressive increase.

"5) At least since the time of Adam Smith and David Ricardo, it has been known that there is a tendency in a capitalist economy toward an equalisation of the rate of profit, or rate of return, on capital across all branches of the economic system. ... The operation of this principle not only serves to keep the different branches of a capitalist economy in a proper balance with one another, but it also serves to give the consumers the power to determine the relative size of the various industries, simply on the basis of their pattern of buying and abstention from buying ...

"6) As von Mises has shown, in a market economy, which, of course, is what capitalism is, private ownership of the means of production operates to the benefit of everyone, the non-owners, as well as owners. The non-owners obtain the benefit of the means of production owned by other people. They obtain this benefit as and when they buy the products of those means of production. To get the benefit of General Motors' factories and their equipment, or the benefit of Exxon's oil fields, pipelines, and refineries, I do not have to be a stockholder or a bondholder in those firms. I merely have to be in a position to buy an automobile, or gasoline, or whatever, that they produce....

"7) A corollary of the general benefit from private ownership of the means of production is the general benefit from the institution of inheritance. Not only heirs but also nonheirs benefit from its existence. The nonheirs benefit because the institution of inheritance encourages saving and capital accumulation...

"8) Under capitalism, not only is one man's gain not another man's loss, insofar as it comes out of an increase in overall, total production, but also—in the most important cases, namely, those of the building of great industrial fortunes—one man's gain is positively other men's gain. This follows from the fact that the sheer arithmetical requirements of building a great fortune are a combination of the earning of a high rate of profit on capital for a prolonged period of time, and the saving and reinvestment of the far greater part of the profits earned, year after year....

"9) As von Mises has shown, the economic competition that takes place under capitalism is radically different than the biological competition that prevails in the animal kingdom. In fact, its character is diametrically opposite. The animal species are confronted with scarce, nature-given means of subsistence, whose supply they are unable to increase. Man, by virtue of his possession of reason, can increase the supply of everything on which his survival and well-being depend. Thus, instead of the biological competition of animals striving to grab off limited supplies of nature-given necessities, with the strong succeeding and the weak perishing, economic competition under capitalism is a competition in who can increase the supply of things the most, with the outcome being practically everyone surviving longer and better. ...

"10) And now, once more with credit to Mises, so far from being the planless chaos and 'anarchy of production' that is alleged by Marxists, capitalism is in actuality as thoroughly and rationally planned an economic system as it is possible to have. The planning that goes on under capitalism, without hardly ever being recognised as such, is the planning of each individual participant in the economic system. ...

"11) I turn now to the subject of monopoly. Socialism is the system of monopoly. Capitalism is the system of freedom and free competition....

"12) Capitalism is a system of progressively rising real wages, the shortening of hours, and the improvement of working conditions. ...

"13) Finally, my last point: a one-hundred-percent-reserve, precious-metals monetary system would make a capitalist society both inflation-proof and deflation/depression-proof. ...

"Here, for lack of time. I must close. I'd like to do so by saying that if you've found my talk today to be of interest, I hope you will explore the matters I've discussed, at greater length and in detail in my book. Its entire sum and substance can be understood as a systematic exposition of the benevolent nature of capitalism."

~ George Reisman, from his pamphlet 'Some Fundamental Insights Into the Benevolent Nature of Capitalism'. Read it all on the web here. And for the full(est) argument, head to Reisman's full book-length argument in Capitalism -- on free PDF here, on Kindle here, hardback here, or paperback here: Vol. 1 and Vol. 2.