Where some of the socialists get it wrong.

Scanning through Richard M. Stallman’s home page (more on this in a second) I came across a link to a medium article arguing that there really is no point to capitalism because the whole point of capitalism is to escape capitalism.

All with the summary “What Would Happen if We Gave Each Other the Things Capitalism Tells Us to Keep From Each Other?”.

False Pretenses

It was obvious by the second paragraph that the author has somehow managed to project the goal of corporations onto the goals of capitalism. He’s also somehow managed to call the business owner - the one shouldering the risks, the responsibilities, the one staying up late at night working, the one fighting competitors and at times unnecessary (and stupid) regulations, the one that in many cases has their whole livelihood on the line - the capitalist.

First, I’d like to address those notions, and then I’ll address why no one who believes in capitalism is trying to escape capitalism.

Capitalism is not a Corporation or Corporatism

It’s usually the socialist’s go-to argument for attempting to dismantle the case for capitalism: the economy is run by large mega-corporations thus effectively creating an oligarchy and it’s the fault of capitalism.

This is blatantly and patently false in a liberal society.

Economic policy is governed by the government of that sovereignty. They put into place the required means and mechanisms for whatever economic system they choose - should it be capitalism or socialism or something in between. The government also has the power, through force, to coerce those not willing to participate into participating or suffering (sometimes extreme) consequences.

Capitalism can only work in free societies where individual freedoms are front and center to the basic tenets of that society. Individuals make choices that are necessary to their own self-interests, and will continue to do so as long as force or the threat of force is not used upon them. Sometimes that force is necessary: for example there should be consequences for stealing your neighbor’s television, but these are cases of morality and not economic persuasion.

Capitalism is merely an extension of the liberal society: to freely trade amongst others with little to no hinderance from outside parties.

Capitalism pre-dates corporations especially really large ones by several centuries. But for the sake of argument let’s use Adam Smith’s and David Hume’s mid-1700’s philosophy as the basis for modern capitalism. The first corporations in the U.S. didn’t come along until around 60 years later with the Boston Manufacturing Company, expanded during the Gilded Age after the U.S. Civil War, and even more so after World War II. The mega-corporations that we see today are a relatively new phenomenon appearing in the 1980s.

I’ll concede that much of the bad behavior that corporations engage in started early on in the Gilded Age (investment for preferential treatment). However, this tit-for-tat isn’t the fault of capitalism. It’s the fault of bad actors on behalf of the government and the corporations. If a government makes policy that is solely beneficial to the corporation (and usually to the government itself in the form of some sort of kick-back) it’s the government’s fault, and those elected officials should be duly punished for that. Remember, the government is the only entity that we’ve given the power to use force. No one is letting Amazon tax you as they see fit without recourse.

The point is that capitalism is not corporatism and the two should not be confused.

If You Participate in Capitalism, You’re a Capitalist

The author chose to label the business owner, not the workers and managers and everyone participating in the system, as the capitalist. Let’s assume this notion is true for a moment. That would mean only the business owner is participating in such a system, and that only they benefit from the economics freedoms therein. So what of the workers? What economic system are they participating in? Certainly not socialism, since they are being paid for their work in accordance to the value it brings. Certainly not agrarian traditional systems where surpluses are rare since they are able to go home and feed their family (and if they cannot they go and find a job to which they can). Certainly not Georgism, since they bought the house they live in.

Workers, managers, business owners all are capitalists to the degree for which the entire system lets them. The American economic system is a mixed economy (mostly capitalistic but with some restrictions) so everyone participating in the American economy is a mostly-capitalist. There’s a good chance that the author (revealed after a quick Google search) gets paid for his efforts at FastCompany and Business Insider.

The point is you shouldn’t label business owners as capitalists - it mishapes the language, which I suspect is an underlying motive. As George Carlin has famously said “control information and control language because that’s the way you control the thought”. He was specifically talking about government in that bit but anyone can adopt that tactic, including those looking to demonize an opposing ideology.

There’s also a loose comparison of the capitalist [sic] to a slave owner that’s rather appalling, even in his admittedly extreme example. He goes on to state that the capitalist [sic] is above moral law, which is funny because slavery was outlawed because it is immoral. This is by no means an accident. A common socialist argument is that capitalism is successful because it rides on the coat tails of slave labor. The problem with that argument is that slavery has existed since the dawn of man all over the world. If slavery really were the impetus for success why are the economies of many South American and African countries so poor? Why isn’t North Korea, who arguably has modern the worst of modern-day equivalent slavery, an economic powerhouse. The argument is full of holes.

People Who Enjoy Capitalism Are Not Trying to Escape Capitalism

The author, as I understand it, is trying to make this point: people work to climb the ladder to become successful via capitalism. Once they are running things they attempt to escape that work by working towards nobler causes: Bezos and Musk attempting to flee to Mars, Gates assigning you books to read.

The fundamental problem with this argument is that the capitalists [sic] must still maintain livelihood. They still have bills to pay. The nobler capitalists [sic] work to create more profit to enable their charitable works. They are still playing the game, and the capitalists [sic] that I know enjoy it: it is their life’s work. No other economic institution in the history of man has created more wealth and reduced so much poverty than capitalism.

After more rather incoherent ramblings, the author goes on to provide very faulty solutions to the “problem” by basically printing money and turning healthcare, transportation, finance, technology, and child care into socialist institutions but relabeling it as “post-capitalism”.

The utopia that is socialism, isn’t.

RMS and Tinfoil Hats

And now a little about Stallman. I’ve always found him rather quirky but with the tone and frequency of the outrage that is oh so common these days I think he’s gone off the rails and has been slurped up into that madness. His writings and links have a very certain tin foil hat aspect to them: the evils of the world (greedy corporations) are coming after us.

I think there’s a bit of a pathology to this. I appreciate what he’s done for the open source community (yes, a capitalist just said that) but I wish he’d focus more on that instead of the paranoia.