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The Absurd Claim that "Capitalism Kills"

by Darkademic in Politics   0 comments

Background

In response to declarations that communism and/or socialism have killed in excess of 100 million people, it has become common on social media to see claims that capitalism is responsible for an even greater number of deaths. The reasoning behind such assertions is rarely made clear, but ultimately they amount to blaming a significant portion of humanity's problems on a notion of capitalism so all-encompassing as to be meaningless. Here are some examples:

In a recent article on The Guardian website, Owen Jones listed the trans-atlantic slave trade, colonialism and the rise of 20th century fascism as either components or consequences of capitalism. Add starvation, disease, war and natural disasters into the mix and it should be painfully obvious that—far from providing evidence of "killer capitalism"—the conditions and institutions that are being described have no casual or necessary relationship with capitalism, and range from the merely coincidental to the fully irreconcilable.

At first this may seem like a weak "no true Scotsman" defence, similar to the "real socialism has never been tried" argument whereby the catastrophic and blood-soaked history of socialism is brushed off as simply not being "real socialism". Criticisms of socialism however need not modify the definition provided by socialists (or found in Marxist literature); an explanation can be given as to why the ideal is unattainable by identifying the steps that necessarily lead to its unravelling, irrespective of the intentions of those attempting to implement such a system.

In contrast, when someone asserts that "capitalism kills" they have to rely on their own definition of capitalism which may include specious, superfluous characteristics such as "where profit is more important than people" or "where workers are exploited via wage slavery" or "where the bourgeoisie and proleteriat exist in a state of perpetual conflict".

The pretence is that the Marxist interpretation of capitalism is somehow scientific, and that these qualities are unavoidable symptoms of said economic system, however this is nonsense and critiquing a concept of capitalism that depends on such qualities is to critique a contrivance that nobody is defending.

What is Capitalism?

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.Merriam-Webster Dictionary

Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.Ayn Rand Lexicon

The recognition of individual rights entails the banishment of physical force from human relationships: basically, rights can be violated only by means of force. In a capitalist society, no man or group may initiate the use of physical force against others. The only function of the government, in such a society, is the task of protecting man's rights, i.e., the task of protecting him from physical force; the government acts as the agent of man's right of self-defense, and may use force only in retaliation and only against those who initiate its use; thus the government is the means of placing the retaliatory use of force under objective control.Capitalism.org

Even just referring to the dictionary definition, it should be fairly clear that when you strip away any non-essentials, capitalism is simply a system in which property is privately owned. Capitalism also explicitly protects more basic individual rights, but in the current context the private ownership of property is the key component. Capitalism is roughly synonymous with economic freedom, in that individuals are free to create and trade without their property being subject to confiscation and redistribution at the whim of the government or wider society.

There are many things that may be found within a capitalist system that are often incorrectly regarded as being necessary elements, for example corporations, wage labour, or even money. Similarly there are things which are often seen as being in opposition to capitalism but which are actually entirely compatible, such as charities/non-profit organisations, communes and worker co-operatives.

Socialism and communism on the other hand, are systems in which—at minimum—the so-called means of production are publicly owned, either via the state, or collectively in some form.

Analysis

The "capitalism kills" argument fails in three major ways. Firstly, no causal relationship can be demonstrated between capitalism and the harm it is allegedly responsible for. Secondly, it completely ignores the fact that capitalism doesn't merely "exist or not", it exists in degrees that vary by location and over time. It is a double-standard to claim that socialism cannot be held responsible for anything that occurs when it is only partially or imperfectly implemented, while simultaneously claiming that capitalism is to blame for anything harmful without any reference to the amount of economic freedom that is actually present (capitalism even tends to be blamed for the failures of socialist regimes). Thirdly, there exists a strong positive correlation between economic freedom and prosperity.

The lack of a causal relationship is easily demonstrated. For example slavery is a violation of the most basic of rights to the extent that it could be considered the very antithesis of capitalism. The fact that slave traders made a profit—pointed to as evidence of the capitalistic nature of slavery—is entirely irrelevant; profit is not what defines capitalism. Indeed, as Daniel Hannan (2018) pointed out, "Capitalist Britain 'literally' overthrew slavery", a point echoed by Michael Hurd (2015) with regards to slavery in the United States; "In the 19th century, it was the comparatively capitalist North which drove out slavery from the plantation-based, anti-capitalist economy of the South."

Colonialism is similarly at odds with capitalism, as it involved the state-sanctioned seizure and incorporation of foreign land and resources.

The existence of colonies, i.e., underdeveloped territories dependent on a ruling power, is not a phenomenon of capitalism, as its enemies so ardently contend, but of the very absence of it. The colonial empires of the Western nations were built in periods of mercantilism or rising nationalism Sennholz (1956)

Fascism, again, is diametrically opposed to capitalism. It does not follow that because private property existed to some degree in Nazi Germany, capitalism is therefore an accomplice of fascism. Businesses being co-opted or hijacked by the state in order to kick-start an economy and facilitate massive rearmament is thoroughly anti-capitalist.

With regards to hunger, disease and a lack of clean water, it firstly must be noted that these are not conditions that have arisen in the 200 or so years since anything resembling capitalism came into existence, they are simply the default. They are issues that, after plaguing humanity throughout history, are rapidly disappearing thanks to capitalism. Tens of millions have been lifted from poverty as a result of people being free to innovate, produce and trade goods and services, and there are a plethora of statistics that could be cited to support this.

The basis for blaming capitalism for the world's problems disintegrates further when it is taken into account that no country is (or ever has been) fully capitalist. As Rand (1966) explained "we are a mixed economy, i.e., a mixture of capitalism and statism, of freedom and controls."

This isn't to say that "real capitalism has never been tried", echoing the tiresome socialist defence mentioned earlier. Capitalism has and does exist to varying degrees, and this means it must be shown to be the capitalist elements of the world economy that cause the aforementioned ills. Blaming "capitalism" means nothing if it is unaccompanied by an explanation of how the defining characteristics of capitalism necessarily lead to whatever is being blamed on it.

Which brings us to the third point; it can be shown that increased economic freedom strongly correlates with increased prosperity, whereas increased amounts of economic planning (the fundamental characteristic of socialism) correlates with decreased prosperity.

Economies are immensely complicated systems composed of innumerable moving parts (which is the reason all attempts to plan any economy beyond a certain size are doomed to fail, regardless of how benevolent the planners are), so there are countless factors other than economic freedom that can impact an economy's success, however said freedom undeniably coincides not only with economic growth, but with the full gamut of prosperity-defining measures including lowered child mortality rates, increased literacy rates, increased life expectancy, and overall perceptions of well-being.

Economic freedom and economic wealth are inextricably linked. All signs point in the same direction: those who would like people to enjoy greater prosperity must work to assure greater economic liberty. Hanke & Walters (1997)

[There are] many benefits of economic freedom: more prosperity, faster and more sustained economic growth, higher income levels, faster reduction in poverty rates, even better air quality. The correlations between high levels of economic freedom and societal well-being, and low levels of economic freedom and societal ills, are numerous. Dowd (2015)

With respect to economic growth, which over time leads to greater average incomes, the evidence is solid that economic freedom is highly important, and that in turn, economic freedom is more potent than democracy in fostering growth. Lawson (2009)

A growing body of evidence seems to suggest that liberty is indeed important and necessary for the enhancement of economic well-being. Farr et al. (1998)

If we take a middle-of-the road interventionist economy and start introducing partial, half-way free-market liberal reforms, does this cause the economy to collapse? Certainly not. Indeed, everywhere we look and find a relatively less socialistic economy, the less poverty and more prosperity we find. McMaken (2018)

Closing Thoughts

Capitalism is responsible for the greatest increase in living standards the human race has ever experienced, whereas socialism has by some estimations resulted in 100+ million deaths alongside unimaginable misery and suffering. Attempts to blame capitalism for all manner of societal problems and historical atrocities are difficult to take seriously.

Far from causing death, capitalism has been steadily (and mostly thanklessly) extending and improving people's lives across the globe. The fact that people still die from hunger or disease are not criticisms that can be reasonably aimed at capitalism, any more than it would make sense to lambaste a surgeon whose patient dies despite doing everything they possibly could. Worldwide prosperity is a process that takes considerable time and effort on the part of millions of people, and is only possible if people are free to innovate, create and trade.

Preventable deaths are not a result of people being free. One could argue that if people were more charitable, or if businesses were less profit driven, that the world would be a better place, however this would be a criticism of people, not of any particular economic system. The greater the propensity for people to act immorally, the more reason there is to restrict the amount of political power available for such people to wield.

Response to Criticisms

A Twitter user with the username @R850Mango decided to respond to this blog post. I have provided my response to his response here.

References

Dowd, A. (2015). Economic Freedom and the Building Blocks of Prosperity and Stability. American Thinker [online]. Available from: https://www.americanthinker.com/articles/2015/11/economic_freedom_and_the_building_blocks_of_prosperity_and_stability.html [Accessed: 29/07/18]

Farr, W. K., Lord, R. A. and Wolfenbarger, J. L. (1998). Economic Freedom, Political Freedom, and Economic Well-Being: A Causality Analysis. Cato Journal [online], 18(2), pp.247–262. Available from: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.482.8647&rep=rep1&type=pdf [Accessed: 29/07/18]

Hanke, S. H. and Walters, S. J. K. (1997). Economic Freedom, Prosperity, and Equality: A Survey. Cato Journal [online], 17(2), pp.117-146. Available from: https://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1997/11/cj17n2-1.pdf [Accessed: 29/07/18]

Hannan, D. (2018). Capitalist Britain ‘literally’ overthrew slavery. The Telegraph [online]. Available from: https://www.telegraph.co.uk/news/2018/07/28/capitalist-britain-literally-overthrew-slavery/ [Accessed: 28/07/18]

Hurd, M. (2015). Slavery Is Impossible Under Capitalism. Capitalism Magazine [online]. Available from: http://capitalismmagazine.com/2015/12/slavery-is-impossible-under-capitalism/ [Accessed: 29/07/18]

Islam, S. (1996). Economic freedom, per capita income and economic growth. Applied Economics Letters [online], 3(9), pp.595-597. Available from: https://www.tandfonline.com/doi/abs/10.1080/135048596356032 [Accessed: 29/07/18]

Jones, O. (2018). Condemn communists' cruelties, but capitalism has its own terrible record. The Guardian [online]. Available from: https://www.theguardian.com/commentisfree/2018/jul/26/communists-capitalism-stalinism-economic-model [Accessed: 28/07/18]

Lawson, R. A. (2009). Economic Freedom and the Wealth and Well-Being of Nations. In: Chamlee-Wright, E. (eds.) The Annual Proceedings of the Wealth and Well-Being of Nations [online], 2, pp.65–80. Beloit College. Available from: https://www.beloit.edu/upton/assets/Lawson.pgs.pdf [Accessed: 29/07/18]

McMaken, R. (2017). Why Do Half-Measures Work for Markets, But Not for Socialism? Mises Institute [online]. Available from: https://mises.org/wire/why-do-half-measures-work-markets-not-socialism [Accessed: 28/07/18]

McMaken, R. (2018). "Real Socialism" Has Indeed Been Tried — And It's Been a Disaster. Mises Institute [online]. Available from: https://mises.org/wire/real-socialism-has-indeed-been-tried-%E2%80%94-and-its-been-disaster [Accessed: 28/07/18]

Niemietz , K. (2017). Has ‘real’ socialism never been tried? Institute of Economic Affairs [online]. Available from: https://iea.org.uk/has-real-socialism-never-been-tried/ [Accessed: 28/07/18]

Piątek, D., Szarzec, K. and Pilc, M. (2013). Economic freedom, democracy and economic growth: a causal investigation in transition countries. Post-Communist Economies [online], 25(13), pp.267-288. Available from: https://www.tandfonline.com/doi/full/10.1080/14631377.2013.813137?src=recsys [Accessed: 29/07/18]

Rand, A. (1966). Capitalism: The Unknown Ideal., p.185. New York: Signet.

Sennholz, H. F. (1956). The Myth of Capitalist Colonialism. Foundation for Economic Education [online]. Available from: https://fee.org/articles/the-myth-of-capitalist-colonialism/ [Accessed: 29/07/18]

Sturm, J. E. and De Haan, J. (2001). How robust is the relationship between economic freedom and economic growth? Applied Economics [online], 33(7), pp.839-844. Available from: https://www.tandfonline.com/doi/abs/10.1080/00036840121977?src=recsys [Accessed: 29/07/18]

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