Philosopher economist historian Sheldon Richman has this excellent article Capitalism and the Free Market, on the Future of Freedom Foundation’s website, in which he continues with his argument from a few months ago against using the word “capitalism” to describe free markets. He notes how prominent economists and mainstream journalists use the phrase “capitalist” to describe America’s economic system with their implying “free markets,” as they blame the so-called “free market” system for the current economic downturn.
Richman points out that we have no free market system. If you want to describe America’s economic system as “capitalist,” then you need to clarify that by being more specific with the description “State capitalist” or “crony capitalist” system, but to say that we have a “laissez-faire” capitalist system is just inaccurate. Because of business-State collusions (such as in national defense and defense contractors, Big Pharma-FDA etc., Big Medicine-Kathleen Sebelius/Zeke Emanuel/ObamaCare, etc.), the system in question is better described as State capitalism, not “free market” capitalism.
And it is also not accurate to describe “capitalism” as with its generally accepted mainstream definition: private ownership and control of property and the means of production. At least, that’s how I have been defining it. Richman notes,
But a capitalist is not one who advocates capitalism in the way that a socialist is one who advocates socialism. He is rather one who owns capital. A capitalist can be a socialist without contradiction.
It is also useful to bear in mind that the word was not initially embraced by free-market advocates; that was apparently a 20th-century phenomenon. According to the Oxford English Dictionary, the word “capitalist” came first and was used pejoratively in the late 18th century. Of course, Marx used it and related words as condemnation. But it was not only opponents of private property who used the words that way. Most notably, Thomas Hodgskin (1787–1868), a free-market liberal and Herbert Spencer’s mentor, preceded Marx in this usage. By “capitalist” he meant one who controlled capital and exploited labor as a result of State privilege in violation of the free market.
Richman describes the history of the use of the word “capitalism,” and notes how throughout much of capitalism’s history, it has mostly involved State interventionism into private economic matters, with compulsory State powers used for the elites who enmeshed themselves with the State, benefiting from the State’s land grabs and confiscatory taxation, as well as the interference by the State into various trades and commerce activity, and the elites benefiting from State-created monopolies. (Of course, King Lincoln was especially devilish in that area, as he waged war against the South primarily for the purpose of protecting his favored Northern industries, especially in his home state of Illinois.) Economist Murray Rothbard points out that there is little difference between this State capitalism and mercantilism:
There is very little difference between state monopoly capitalism, or corporate state capitalism, whatever you want to call it, in the United States and Western Europe today, and the mercantilist system of the pre-Industrial Revolution era. There are only two differences; one is that their major activity was commerce and ours is industry. But the essential modus operandi of the two systems is exactly the same: monopoly privilege, a complete meshing in what is now called the “partnership of government and industry,” a pervasive system of militarism and war contracts, a drive toward war and imperialism; the whole shebang characterized the seventeenth and eighteenth centuries. The really key difference is that they didn’t have a gigantic P.R. apparatus; they didn’t have a fleet of intellectuals trumpeting to all and sundry the wonders of the system: how it promotes the common good and the general welfare, how this is Liberalism In Action. They said, “We’re out to shaft the public and we’re doing it!” They were very honest in those days.
But now, Chris Matthews and Andrea Mitchell et al. are the P.R. apparatus for the Obommunist leftist State agenda, David Frum and Andy McCarthy et al. are the P.R. apparatus for the warmonger-military industrial complex State agenda, and they, with their Big Gun Statists Cheney, Obama et al. have been saying, “We’re out to shaft the public and we’re doing it!” Murray Rothbard knew what he was talking about!
Sheldon Richman concludes his article by noting,
Thus those who call today’s system “capitalism” cannot be said to be misusing the term. Advocates of the real free market therefore would be well advised to avoid using it to describe their preferred social system.
Now, I did a post a few months ago on Sheldon Richman’s argument against using the word “capitalism,” and I felt there was nothing wrong with using that word to describe “private ownership and control of property and the means of production,” but now that I am better informed about the history behind the creation of that word, I’m not too sure. In my post then, I suggested “voluntarism” and “privatism” as substitutes for “capitalism” to describe free markets, laissez-faire. “Laissez-faire” means “to let be,” let people be free from intrusions, or, in the case of social economic matters, free from State interventions and State intrusions.
“Market liberalism” is probably the best phrase, because, to me, to “liberalize” means to make free. And here I mean free from intrusions and aggression. People have a right to be free from the aggression and intrusions of others. That is why we have laws against trespassing, against theft, and so on. This is why the Fourth Amendment specifically notes (I’m paraphrasing) a “right to be secure in one’s person, papers, houses and effects.” If individuals have the inherent right to life and liberty, as the Declaration of Independence declares, that means that one has a right to one’s person and property — one’s life — be free from the aggression and intrusion by one’s neighbors — and IT OUGHT TO BE THE CASE! that the right of one’s person and property be free from aggression and intrusions BY THE STATE!!
I’ll be more specific here: Take ObamaCare. Please. What Obama, Pelosi and all the other State fascists and communists want is for the State to completely control what goes on in the doctors office, the doctor’s examination and tests of the patient, the billing procedures, ordering the doctor’s office what kind of medical equipment to use (and which State-connected companies to provide it!), what insurance companies people may or may not use etc. It should be called ObamaFascism — these people are nothing but little dictators (as well as ignoramuses, parasites and racketeers — we really ought to throw them in jail for racketeering, and that’s no exaggeration!). In other words, they oppose freedom.
What these miserable wretches really are are communists, in which communism is State ownership — not just control, but ownership — of property and the means of production. One of the most important means of production is the people. They want State ownership of the people as well as industries and resources.
But individuals have an inherent right to have voluntary associations and contracts with doctors and insurance companies or hospitals, have a right to trade whatever and however much they want with whomever they want who provides a service they need, based on mutually beneficial agreements, and NO ONE — no third party — has any moral right to use the armed power of government to intrude in those matters! I’ve said this before and I’ll say it again: If our medical matters are none of our neighbors’ business, then it’s none of the State’s business!
And we have a right to own our own lives and a right to our freedom. Tell the State to get lost!