What is Capitalism?



By Sigrid Weidenweber

If it were not for all the Democrat candidates maligning capitalism and proposing ridiculous monetary social schemes for the population, it would never have occurred to me to write, or even think, about capitalism.  We all think that we know what the word means. It is the freedom and the opportunity to freely produce, buy and sell products.

But is it? Or is it the dehumanizing system that, according to Marx, sucks the lifeblood out of the workers?

Having written about Socialist/Communist systems and experienced them first hand, it easier for me to define their essence and core. It is a centralized, planned economy, conceived and instituted by a multi-headed elite that is in total control of all aspects of the economy and all socio-economic functioning. The latter part includes control of medical services, pensions, the taking of dues of any kind for social associations, schools, universities, the arts, all forms of entertainment and all forms of sport. The former part controls the entire monetary system, all aspects of the economy: hospitals, factories, farms and all forms of agriculture, and mass-transportation. There you have it! This is the system I lived under. It also allows to turn citizens into slaves “for the good of the people,” as it does with Cuban doctors, who are being farmed out into foreign countries. Most of these countries are in dire need of doctors and pay the Cuban government directly, which keeps most of the doctors pay. It is also the form of government impossible to dislodge, for once socialist oligarchies attain power they take full control of the police, the military and the ballot boxes in total eradication of all democratic principles. One just has to look at Cuba, Venezuela, China and Russia.

Capitalism, on the other hand, is harder to define. What comes instantly to mind is that it is a system of free trade, free exchange of finance, service and goods. People commit freely to exchange service for predetermined fees—people, citizens, decide their education, health care, their art, sports, leisure, association and all other parts they wish to conduct in their lives. We all know that is what capitalism is. Capital, after all, is nothing other than money used to build, trade, and invest in opportunities to make more money. It is capital to purchase goods for use or sale, to hire help and pay wages. This definition, unfortunately has become too simplistic. It crudely describes what Marx saw and wrote about in his The Capital. Those who have capital use it to control and rob those who have none and need to work to attain it.

The French Christian philosopher Simone Weil thought that capitalism—the word—was an empty abstraction. She believed that “to blame every societal ill on it” was a mental deficiency. It was her belief that “a modern European economy consists in certain methods of production, consumption and exchange, which are continually varying, however, and which depend upon certain fundamental relationships.” These relationships, she contends, are production and circulation of goods and money, between money and production, between money and consumption.

“This inscrutable arrangement” she says, “is arbitrarily converted into an abstraction, which defies all definition, and is then made responsible, under the name of capitalism for every hardship endured by oneself or others.”

Friedrich Hayek said in an essay in 1937, “a modern economy is an immeasurably confusing and constantly changing combination of associations and exchanges—not a system of any kind.”

That explanation of the market voids the Socialist contention that a free market economy is a created system manipulated by those in power to benefit themselves. Socialists must believe this because a socialist economy is by definition a system created, planned, and vigorously regulated to function at all.

To round out the discussion I quote David Brooks from an article in the New York Times edition of December 6, 2019. Brooks has an easily understandable take on capitalism. As a journalist, and former socialist, he admits that his Socialist/Communist beliefs did not survive the test of reality. He saw that government officials were not capable to create and plan their ideas as a working economy. He admitted, “I came to realize that capitalism is really good at doing the one thing socialism is really bad at: creating a learning process to help people figure stuff out.” He then recites the learning curve of a person wanting to run a rental car company and all the things the operator must have researched before, or is learning at the job—at his own expense. He is learning fast, mistakes are costly. Every little company has amazing amounts of knowledge, that would never exist in a state-owned shop, for no one really cares that deeply about the state’s business to painstakingly hone the fine points of the business.

The state cannot anticipate peoples fast-changing desires. It can never collect all the relevant data for the whole economy, cannot see even local context-driven factors with exponential effects. Capitalism has produced the greatest amount of wealth ever. More than a billion people have been lifted out of poverty.

Brooks quotes statistics from the Fraser Institute, a free-market think tank. “Among the freest economies in the world are Hong Kong, the U.S., Canada, Latvia, Denmark, Mauritius, Malta and Finland. Nations in the top quartile for economic freedom have an average G.D.P per capita of $36,770. For those in the bottom quartile, it is $6,140. People in free economies have a life expectancy of 79.4 years. Those in largely planned economies have a life expectancy of 65.2 years.”

I leave you with these statistics to ponder. It is impossible to state its truth better in words than these numbers tell. I wish that Elisabeth Warren, (estimated net-worth with husband 12.5 million,) Bernie Sanders (worth 2.5 million,) AOC and all the other Socialists would do a little research before proposing the ultimate ruin of this country.

The views and opinions expressed in this commentary are those of the author and do not necessarily reflect the official position of Citizens Journal.

 Sigrid Weidenweber grew up in communist East Berlin, escaping it using a French passport. Ms. Weidenweber holds a degree in medical technology as well as psychology and has course work in Anthropology.  She is co-founder of Aid for Afghans.  Weidenweber has traveled the world and lived with Pakistani Muslims, learning about the culture and religion. She is a published author and lecturer. You can find her books on Amazon.com

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