Book Review: The Morality of Capitalism

capitalismThis book, edited by Tom G. Palmer, is intended for college students. It consists of 14 contemporary essays from all over the world. The major topics are the virtues of entrepreneurial capitalism, voluntary interaction and self-interest, production and distribution of wealth, and globalizing capitalism.

The essayists make a specific distinction between free-market capitalism and “crony” capitalism in which failed firms are “bailed out” with money taken from taxpayers. Of crony capitalism one essayist writes, “the national capital is little more than a gigantic pulsating hive of rent-seeking lobbyists, bureaucrats, politicians, consultants, and hacks, and in which appointed officials of the Treasury Department and the Federal Reserve System take it upon themselves to reward some firms and punish others.”

The essayists favor ending all subsidies.

The essayists discuss the theory of capitalism in relation to Marxism, socialism, the welfare state, and “social justice.”

John Mackey, founder of Whole Foods, says, “The beautiful thing about capitalism is that it’s ultimately based on voluntary exchange for mutual benefit.” In other words, capitalists and free societies prosper because capitalists produce the goods and services people want.

David Boaz of the Cato Institute writes, ” The market arises from two facts: that human beings can accomplish more in cooperation with others than individually and that we can recognize this.” “Critics of markets often complain that capitalism encourages and rewards self-interest. In fact, people are self-interested under any political system.”

David Kelley of the Atlas Society writes: “The principle of rights says that we must deal with others peaceably, by voluntary exchange, without initiating the use of force against them.” Kelly asks what about people who are poor, disabled or otherwise unable to support themselves. His harsh answer is ” No one can claim a right to make others serve him involuntarily, even if his own life depends on it.” This is tempered by the observation that such people are better off in free societies and benefit by voluntary charity. Kelly also discusses distribution of wealth, the communist idea of egalitarianism.

Temba Nolutshungu, a South African economist, notes, “Government-generated jobs are at the taxpayers’ expense and amount to subsidized employment. Being unsustainable, they have no positive economic consequence. The private sector is the main creator of wealth, and the state sector a consumer.”

That gives you a taste of the book. A couple of the essays are a bit heavy going, but most are lucid and all are thought-provoking. In essence, capitalism is an amazing vehicle for social cooperation because such cooperation benefits the capitalist individually and society as a whole.

The book is available from Amazon here. The publisher is Jameson Books, Inc. Of Ottawa, Illinois.

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13 comments

    1. I would also recommend “The Road to Serfdom”, by Freidrich Hayek.  (No relation to the hottie)

  1. Just in time for Christmas too. I know a few Marxists that will be getting this stocking stuffer. What’s your zip code again, Lefty? 

  2. “In essence, capitalism is an amazing vehicle for social cooperation because such cooperation benefits the capitalist individually and society as a whole.”

    I thought that this pretense had been abandoned in favor of promoting the notions “The poor are only poor because they lack personal responsibility”, i.e., they were given every opportunity to succeed, but blew it, and “The poor will always be with us”, i.e., poverty is an inevitability.

    “The beautiful thing about capitalism is that it’s ultimately based on voluntary exchange for mutual benefit.”

    Wage slavery is anything but voluntary.  It is not voluntary to eat, nor voluntary to seek medical care, nor voluntary to preside somewhere, nor voluntary to wear clothing.  

    Are the authors and the reviewer deliberately avoiding using the libertarian label to describe what they are promoting?    

    1. “I thought that this pretense had been abandoned in favor…”

      Dialectic are so bourgeois.

      I’m curious, does your concept of “wage slavery” include somebody who works at the MVD? A school teacher? An employee of a non-profit organization? An investigator for the EPA?

      1. The essential element is the concept of using one person’s labor to add value.  The excess value beyond labor and production costs is the profit.  The examples you give are all examples of non-profit enterprises. 

        Right now, Steve, I have to head off to my petit bourgeois job.

      2. So the concept has little to do with the practical experience (or “material reality”) of the employee? Someone could do the same work for two different entities, but an employee making more money for a shorter workweek would be a wage-slave if their employer is for-profit, while the non-profit employee working long hours for substandard pay is not a wage-slave? Because they’re not creating “excess value” beyond what they’re paid for?
         
        The term “production costs” in your equation can cover a lot of territory, from facilities to materials to marketing expenses to research and development costs and more. Why assign the “source” of excess value to the labor and not to these areas? Not only is that fairly random, it seems verifiably false.

      3. I like it, Steve.  Seeing you use terms like “excess value” warms my heart and gives me hope that our time together is not wasted.  You are correct – “Wage slavery” is not a well-defined term, at least as I use it.  But you can think of it the next time you see some poor sap working at 7-11, or perhaps waiting outside to go to his landscaping job.   You know, the guy or girl who is two paychecks away from homelessness.  For that person, going to work at a soul-killing job is anything but “entering into a mutually beneficial voluntary relationship”. 

        The “source” of all profit is labor.  A facility sitting there without labor is just an empty building.  Only labor adds value.  All profit is thus expropriated from the working class.  The essential relationship to remember about capitalism is that your friends the bourgeoisie control what is known as the means of production.  Those that control the “means of production” are the bourgeoisie or the ruling class.  Those that do not control the means of production are the working class.   

        How about those people on Wall Street, huh?  The “American Autumn” perhaps?  They may not know about “production costs”, marketing, etc, but they do know the score.    

      4. The “poor sap at a soul-killing job” scenario is hardly unique to a capitalist system. I don’t see how working in a state-run factory or mine, or as a filing clerk in the Offices of Citizen Oversight would be any less soul-killing.

        Your proclamation that labor is the source of profit seems based more on doctrine than on reasoning. You can flip your logic to: labor without a facility to work in, or without materials to work with, or (best of all) without a market to buy the products and fund the entire operation, is just an idle workforce. Therefore the source of profit is the facility. No wait, it’s the materials. Maybe the market? Or is it the computers?

        If labor is the source of profit, then automating the processes should…reduce profits. If labor is the source of profit, then companies with sufficient labor won’t go bankrupt. If labor is the source of profit, then the Edsel should have been as profitable as the Mustang.

        This is the problem when complex systems are reduced to simplified models and false binaries, especially from antiquated eras. They’re useful for crowd control, but the logic eventually breaks down in the details.

        None of this is incompatible with getting that top 0.1% back under control.

      5. “The “poor sap at a soul-killing job” scenario is hardly unique to a capitalist system. I don’t see how working in a state-run factory or mine, or as a filing clerk in the Offices of Citizen Oversight would be any less soul-killing.”

        Probably right about that.  How about working in a worker’s cooperative where the workers own and operate the place?  

         

      6. I like those places. I actually would like to see more of them. On the small scale I think the “soul-killing” aspect is definitely mitigated. I don’t think the same would be true if the workers’ coop model were ubiquitous and/or organized on a large scale. I also suspect we wouldn’t have the iPhone or portable defibrillators. Organize a state or a planned economy around the model, and things will get ugly quick.

      7. “I also suspect we wouldn’t have the iPhone or portable defibrillators.”

        Likely not.  Even your Uncle Karl was quick to admit that capitalism is a superior system for  innovation.  I am willing and ready to give up an iphone I do not care to own, stores full of millions of products and relentless bombardment with advertising telling me about consumer products I must have (even though I didn’t even know they existed one minute before) to see the poorest receive the same health care, the same education and the same system of justice as the richest.  

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