Mises Wire

Capitalism, Socialism, and Libertarianism

There’s been a good deal of debate recently in libertarian circles about the word capitalism. Is it compatible with libertarianism? A synonym for it? Should we use it? For example:

As some of my posts linked above indicate, I find this debate extremely frustrating because the nature of the debate is rarely made clear. In that respect it is reminiscent of the interminable debates over gay marriage and thick v. thin libertarianism. On the gay marriage issue, it’s often the case that the arguments of gay marriage opponents boils down to opposition to the word marriage being used by the state in the caption in the statute, though they usually won’t come clean and admit it. In my view (not shared by all my fellow libertarians), the thick-thin paradigm adds nothing of substance and is used to equivocate–engaging in non-rigorous argument about what “libertarianism” “is” semantically and then using this to argue for one’s particular substantive positions; it’s like trying to prove that marriage implies slavery or wife-ownership because the word “my” is used in “my wife.”

The libertarian opponents of “capitalism” often engage in equivocation, I believe. If challenged they say they are just opposed to the word, as if this is a semantic or maybe tactical/strategic issue. But because of confused leftist beliefs, many of them are actually opposed to aspects of the underlying social order that we anarcho-libertarians refer to as (non-corporatist) “capitalism”–the modern industrial free market. They oppose “absentee ownership” (see my post A Critique of Mutualist Occupancy), favor localism and self-sufficiency, are leery of the division and specialization of labor, buy into Marxian ideas about “alienation” and “labor”; they accuse standard libertarians of putting undue stress on “capital” while they do the same with “labor” and “the workers”; some flirt with crankish Georgist ideas, and so on. Some of the opponents of the word “capitalism” seem to have genuine strategical or even semantic concerns, such as Sheldon Richman, instead preferring the term “free market.” But some of them seem to oppose even this term–preferring instead the bizarre and annoying term “freed market,” or outright opposing the word “market” in the phrase “free market” (see Markets vs Free Markets).

In my view we should separate the semantic and strategical debate from a debate about substance. Conflating these leads to dishonest argumentation, confusion, and equivocation. On the substantive issues, we can have that debate; I think “left-libertarianism” is a confused project. To the extent it is correct, it is just standard libertarianism and adds little new; see my post Wombatron’s “Why I Am A Left-Libertarian”, noting: “yes we need to be aware that modern day ‘big business’ is not pure; it’s too in bed with the state (as Rothbard, say, recognized long ago in criticizing Rand’s bemoaning of Big Business as being America’s most persecuted minority). Yes, corporatism is bad. Yes, “big business” is often in bed with the state. We know this. And to the extent left-libertarianism says things standard libertarians do not say qua libertarians, then it is either wrong, or incompatible with libertarianism, or, at best, compatible but completely orthogonal to it as much as one’s religious or recreational or cultural preferences are outside of libertarianism (see why the “thick-thin” debate can worm its way in here by unduly and unnecessarily expanding what libertarianism “is”?). In my view, we libertarians are neither left nor right; both left and right are confused, wicked doctrines. We are better than both of them. Which one is “more” evil is a question that may have no answer; from the libertarian point of view, both are wrong, which is why we have an original, fresh, consistent, and radical view focused on individual rights. But my point is not to debate this here. The point is that it’s a substantive debate. It won’t be solved one whit by pointing out that the word “capitalism” was originally attached to us by our enemies as a pejorative.

So to my mind, the only legitimate debate about using the word “capitalism” is a semantic one, or perhaps a strategical/tactical one. As for semantics, this is not really an interesting debate. As a semantical matter, “capitalism” technically means a system with private ownership of the means of production. This is true regardless of its origin, and regardless of whether corporatism is prevalent in the West. It is at least arguable that “a system of private ownership of the means of production” is an acceptable definition of “capitalism”. So much for the semantic issue. If this is what the word means, is it a synonym for libertarianism, as Rand, Friedman, and other founders of modern libertarianism used it; or at least for “free market”? Is it at least compatible with libertarianism? It seems to me that capitalism should not be used as a synonym for libertarianism. For this reason in the last few years I tend to refer to myself as an anarcho-libertarian instead of anarcho-capitalist. I believe capitalism–especially if it is made clear that it does not include corporatism–is closely associated with libertarianism in that it describes the free market in any libertarian society above a primitive level. That is, libertarianism supports property rights, which clearly imply a free market, so long as men engage in trade; and a free market is characterized by capitalism since the means of production (if there are any) are of course privately owned. This is true even of the left-libertarians’ kibbutzes, communes, and coops–such arrangements are simply voluntary coownership which is just one type or application of private ownershp rights.

What about tactical or strategical concerns? This one has more weight. The West is often referred to as “capitalist” because it allows a much higher degree of genuine capitalism than have other countries. Yet because the western states have never been fully libertarian, there has been a large and growing degree of corporatism or mercantalism. Thus in popular usage “capitalism” has some corporatist connotations. If we call ourselves capitalism we may mislead outsiders and open ourselves to unjust criticism. This is one reason I tend to say anarcho-libertarian instead. But so long as we are clear that we mean laissez-faire capitalism, or to condemn corporatism, mercantalism, and protectionism, I see nothing wrong with using the term capitalism to describe an important aspect of libertarian theory and society. Due to the constant drumbeat of the left-libertarians, there is a temptation to just give them this one. To stop using the word. To retreat. But we have to be careful in siding with them on their ostensibly “semantic” battle. In my view, we standard libertarians do not want to give the impression that we agree with the leftists’ substantive attacks on (laissez-faire, Lockean, private-property, modern, industrialized) capitalism. That debate should be a separate one, not mired in semantics.

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