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Home | Mises Library | Capitalism and the Columnist

Capitalism and the Columnist

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Tags Calculation and KnowledgeOther Schools of Thought

04/18/2001Robert P. Murphy

In his April 15 article, "Why I am not a libertarian," Charley Reese offers some fairly standard arguments against libertarianism.  Though the following analysis will be largely unfavorable to his claims, such criticism cannot detract from the honesty and good sense so characteristic of Reese’s work.  With this caveat in mind, let us examine the ostensible flaws Reese has perceived in the libertarian position.

"First, capitalism, unless moderated by Christian virtue or government, is just as brutal and cruel as communism."

Now, Reese’s style is of the no-nonsense, plain-shooting variety, so I may seem quite the prig for taking his remarks literally, but this quoted statement leaves the bounds of acceptable hyperbole and enters the realm of ridiculous falsehood.  As Joseph Sobran tirelessly points out, the "robber barons" never killed anybody.  Yet how many millions have perished in the various workers’ paradises this century has seen?

And, as Murray Rothbard pointed out, libertarianism—unlike Marxism—does not require some new "Anarchist Man," who obeys property rights out of Kantian duty.  Libertarianism simply says:  Given any level of morality, a society will function less smoothly if shackled by government.  The more moral the populace, the better, but this is a different matter altogether.

Reese, perhaps anticipating this author’s objections, provides further argumentation:  

Most [baby boomers] have never experienced really hard times.  Most have not bothered to read much history or literature.  Many were content to believe the fairy tales woven by Ayn Rand and her cohorts.

Try digging coal for a few pennies a ton in an unsafe mine where you are forced to buy your own tools.  Try imagining a disabling injury and, instead of receiving workers’ compensation or disability insurance, your broken body is just tossed off the company property.

That’s capitalism.

Although I have not read much history or literature, I believe that what Reese has described is not "capitalism," but capitalism in the early days of the Industrial Revolution.

This reasoning is quite typical, and thus deserves close scrutiny.  Living and working conditions have undeniably improved since the early days of capitalism.  But at the same time, there are two other trends:  First, "pro-labor" forces—i.e., government regulation and labor unions—have grown tremendously.   Second, the level of capital has steadily grown.  Reese and all labor leaders believe that the first trend, the increase in the power of government and unions, is the cause of human progress.  Ludwig von Mises believed, on the other hand, that it was the steady accumulation of capital that allowed the Western world to grow richer over time.  Both explanations are equally consistent with the historical record, yet only Mises’s has a sound theoretical basis.

Reese continues:  "Try a six- or seven-day work week with 12-hour days, a pittance for wages, in a hellish and unhealthy environment and absolutely no benefits."

Again, Reese is simply attributing the low productivity of human labor in the late 1800s to the fact that labor unions and regulations had not yet blossomed.  Reese does not stop to consider that it takes time to construct machines and factories, and to develop new methods of production and distribution.  There were also "absolutely no benefits" during the Stone Age.  If only Neanderthal man had threatened Mother Nature with a strike!  Thousands of years of human misery could have been cleverly sidestepped!

"You can still see pure capitalism in places such as Calcutta or Mogadishu."

Now, the Mogadishu reference is understandable; many people consider the truly lawless area to be in utter chaos.  As I have argued elsewhere, however, chaos should not be confused with anarchy.  And the reference to Calcutta is simply unfair.  Calcutta is not a city submerged in laissez-faire.  It seems Reese is now equating "pure capitalism" with simple poverty.

"I wonder how many Americans would be willing to cut and sew a pair of finished blue jeans for 75 cents in a sweltering, bug-infested building."

I know not what course other men may take, Mr. Reese, but hell no, I’d never cut and sew a pair of finished blue jeans for anything under two bucks.  Does that admission make me a federalist?  (And when you say "bug-infested," exactly what kind of bugs are we talking about?)

"How many pair [of finished blue jeans] do you think you would have to cut and sew in order to feed your family?"

Well, I have no family; thanks for pointing that out.  Let’s stick to economics, okay?

"Those $30 to $50 pair [sic] of jeans we wear were made by what amounts to slave labor in Central America or Asia."

First, I must again object to Reese’s fighting words.  By definition, slave labor cannot exist under "pure capitalism."  It is a fair (though still incorrect) argument to claim that the totally free society could not function, but in no way can one liken its operation to slavery.

Second, is Reese implying that "we" all wear the same pair of jeans?  May I reserve them for Thursday night?

Third, why is it that non­-union workers have benefitted as well?  Shouldn’t these workers currently be in the same lot as those miserable wretches working in the coal mines of yesteryear?

Fourth, Reese’s theory fails to relate material progress (which has been growing constantly) to the absolute size of union membership (which sharply rose and then fell).  If wages and working conditions were always proportional to union membership and the number of government regulations, Reese’s case would be more plausible.  But since union strength has bounced around, while the lot of the worker has steadily improved, surely Reese must remove this independent variable from his list of factors leading to improvements in human welfare.

"So, although I strongly believe in the maximum possible freedom, I also believe in community and in responsibility to that community.  Not only is no man an island, but no man is self-made.  Some people are just good at forgetting all the people who helped them get where they are."

This too is a typical statist argument.  Just because many libertarians (including the present author) happen to be lonely introverts who wonder what it would be like to marry Deanna Troi from Star Trek: The Next Generation, Mr. Reese assumes that libertarianism itself requires one to be antisocial.

This is simply not true.  Indeed, the libertarian realizes that without government busybodies stealing their money and trying to run their lives, free individuals would have both the means and the inclination to engage in great acts of philanthropy, just as many of the much-maligned robber barons did with the fortunes they earned while serving consumers.

(Also, can someone please explain the "no man an island" metaphor?  Taiwan is an island.  Now does that mean it doesn’t rely on trade with others?  Also, I had sometimes pictured Ayn Rand and Murray Rothbard as a volcano and an isthmus, respectively, but never once have I likened a libertarian to an island.)

"[If you claim to be a self-sufficient person,] don’t live in a community with all its protections and benefits, don’t go to public schools, ride on public roads, enjoy the benefits of publicly provided clean water and sanitary sewers and proclaim yourself an individual who owes nobody anything."

Reese has fallen for the government’s simplest trick.  The government outlaws private provision of a service, then uses the money it steals from taxpayers in order to hire ambitious or shiftless people to carry out its "functions," and then expects everyone to be grateful for its farsighted benevolence.  Reese no doubt would have informed the dissidents of the Soviet Union to either shut up or stop hypocritically eating the food so kindly provided by their rulers.

After stating that pure socialism doesn’t work either, Reese closes with a seemingly sensible compromise:  "The idea of a mean, something-short-of-pure, unregulated capitalism and pure, over-regulated socialism is what we should strive for."

This Goldilocks view of government is very common; why not strive for a third ideal, which avoids the evils of communism and the excesses of capitalism?  Cannot the interventionist state, properly straitjacketed by a constitution (and this time, we mean it), provide just the perfect mix of liberty and oppression?

Not so, argued Ludwig von Mises.  Interventionism always results in a state of affairs that is worse even according to the (publicly stated) aims of the interventionists.  Each intervention ineluctably leads to a further one, until the drive toward socialism is completed.

Mises says, "But for the inefficiency of the law-givers and the laxity, carelessness, and corruption of many of the functionaries, the last vestiges of the market economy would have long since disappeared."

He continues:

The unsurpassed efficiency of capitalism never before manifested itself in a more beneficial way than in this age of heinous anticapitalism. While governments, political parties, and labor unions are sabotaging all business operations, the spirit of enterprise still succeeds in increasing the quantity and improving the quality of products and in rendering them more easily accessible to the consumers. In the countries that have not yet entirely abandoned the capitalistic system the common man enjoys today a standard of living for which the princes and nabobs of ages gone by would have envied him. A short time ago the demagogues blamed capitalism for the poverty of the masses. Today they rather blame capitalism for the "affluence" that it bestows upon the common man.  (Human Action, Scholar’s Edition, p. 859.)

In other words, Mises is pointing out that the very success of capitalism has allowed the rise of an "intellectual" class, a group of opinion-makers who are actually paid to come up with reasons to disparage the very freedom that affords them such luxury.

That’s capitalism.

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