The Philosophy of Capitalism



In a recent attempt to refine and condense human history to its most crucial, most fundamental turning-points, equipped with an undergraduate-level sense of anthropology, I sifted through an endless myriad of names, places, and events- some proud, others shameful- searching pointedly for the very skeleton of the subject. I recalled the ancient Greeks, the birth of philosophy, great empires risen and fallen. My thoughts then turned to histories of science and invention: Copernicus, Newton, and the internal combustion engine. The Renaissance was an unrivalled leap forward in culture and science, though its application to most men’s lives was very gradual and the period seems now, in retrospect, a question asked in the fifteenth century not to be answered until the nineteenth. A patriot, I found it hard to wrest the American Revolution from the top of my list, but ultimately found it to be, though no less astounding, a secondary result of a primary mode of thought. Where, then, was the root of that thought? What quality was so essential as to deserve credit for making possible a nation unlike all others, one which broke from traditions of oppression and injustice once thought inevitable to man? Cautiously, I soon narrowed the subject to three definitive components, a most abbreviated history which lacked many profound details, but whose remaining constituents I would dare any to challenge. They follow, “10,000 B.C. – Ancient Sumerians commence the practice of agriculture and become the first stationary people in history, effectively inaugurating human society and culture; 1776 A.D. – Capitalism is born; in between, chaos.”  That is to say, the Sumerians created society, and the capitalists found a way that it could function toward the betterment of all men, without sacrifice or subservience held as a necessary ingredient. In that way, capitalism can best be thought of as one of the few fundamental changes in man’s concept of the world and his approach to life in it. Why, then, has the only political system to ever champion equality and justice been so scorned, so derided, and so misunderstood? How have its detractors gained so much ground despite the overwhelming, ever-growing evidence of its virtues and the wrongs perpetrated every day by the contradictions of a semi-free, semi-statist economy? How can capitalism be such a fundamental aspect of each of our daily lives and remain such a vague and mysterious force, a mystical “invisible hand”, to even its most fervent advocates? The answer lies in nearly a century and a half of increased government interventionism, a society with a remarkably limited understanding of the system in which it lives, and consistent deviation from the essential moral principles which make it function- principles consonant with man’s very nature: rationality, self-interest, and self-determination.

It should come as no surprise to any student of capitalism that that ideal political system to which we forever strive was devised by a professor of two subjects crucial to its design and execution: logic and moral philosophy. Adam Smith has since been only mildly applauded by most history books for the immeasurable good his work has done for humankind every day since, often given less praise than Woodrow Wilson for his work in building the League of Nations or Taoism for laying out a philosophy whose greatest attribute is its entirely inexplicable longevity. Still, Smith’s conception of what he called “commercial society” came at a crucial time in Western history, when the people of Great Britain and Western Europe held their breath that the ephemeral and delicate period of relative peace would not be disturbed by the next mercantilist brute to grow weary of his own wares and resolve to seek those of another. Mainstream intellectualism, typically dismal, offered only the continued promulgation of numerous well-intentioned, errant political philosophers, each exhibiting his own brand of distorted, cynical teachings which said more about the chronically injured mentality of their authors than they ever could of the workings of a proper society. On the one hand was offered Thomas Hobbes, with his claims that the surest way to freedom was to be found in a benevolent dictatorship. On the other was Montesquieu, who said that “the individual’s self-interest is always to be found in the common interest.”

Here can be seen the seedlings of the tragically errant perspectives by which capitalism would come to be gauged. More than half a century before the authorship of Marx’s and Engel’s moral abominations against the foundations of free society, capitalism as a moral ambition would, in the mind of the average Westerner, die the so-called “death of a thousand tiny cuts.” Through the ethical contortions of pragmatism (another concept not to be unleashed explicitly upon man for many years, though already implicitly well entrenched) and the immediate, unchallenged acceptance, even by Smith, of the need for government interventionism, no amount of evidence to the contrary, from the meteoric rise of American industry to a plummeting child mortality rate, could stifle the notion of capitalism as merely the lesser of two evils- a system which could be perfect with just the right amount of control and regulation. Furthermore, they carried with them a concept of capitalism which still attributes to it the features of mercantilism: a world comprised of an inherent, rigid social stratification in which all parties ruthlessly clamor at the expense of the other for a finite amount of wealth. Thus, from its inception, capitalism was denied a proper moral interpretation and objective definition, leaving it subject to the slanders of any brute or power-hungry intellectual to gain an audience.

Let us proceed to briefly define capitalism by those moral traits which were so essential and so grossly evaded or unrecognized at its outset. Ayn Rand described politics as being, “based on three other philosophical disciplines: metaphysics, epistemology, and ethics.”[i] The morality of any given political system can thus be determined by the degree to which it satisfies man’s essential needs within the context of those fields. Rand also detailed the three arguments generally posed by capitalism’s purported defenders, “the argument from faith–the argument from tradition–the argument from depravity.” It will be necessary to assess how these three arguments- despite the philosophical disinclinations of their proponents- pair rather perfectly with those three branches.

Ayn Rand once noted that in political economists’ efforts to define the nature of their science, “more study was devoted to the influence and quality of [material factors of production] than to [man]’s role or quality” and that “[t]he fact that the principal “resource” involved was man himself…was given the most superficial attention, if any.”[ii] No interest was devoted to man’s basic qualities, his epistemology, the functions of his mind, and the qualities required of any system meant to guide his actions and interactions with others. Had it, what would have been realized and addressed is man’s most definitive, most inextricable characteristic: reason. It would have been seen as irrefutable that no system of political economics could aspire to successfully function nor long endure in prosperity while negating that most essential trait. “A process of thought is an enormously complex process of identification and integration, which only an individual mind can perform. There is no such thing as a collective brain.”[iii] wrote Rand. Therefore, in a system dependant upon men consistently making successful value judgments and trading based on the perceived worth to himself of a good or service, any attempts to supplant an individual’s use of reason (a patently individualistic process) with some vaguely constituted collective “hive-mind” could stand no chance of success. Accordingly, all of history since has proven without exception that the degree to which a society attempts to collectivize its economic actions and decisions is the degree to which it fails. Reason is invariably the first casualty of a statist economy.

Tragically, in modern American politics, there is no popular political philosophy espoused by either side which sufficiently rejects the altruist-collectivist doctrine. Where “liberals” grow more blatant by the day in their cries of collective “rights” to an economy‘s “natural resources”, “conservatives” espouse a horrendously atrophied system of belief which failingly attempts to reject the “liberals”’ claims in specie, if not in premise- all the while having never weaned themselves of an adherence to collective judgment. By its perpetual idealization of an undefined “American way”, harking back to some unnamed time when the world’s problems were purportedly simpler, and its treatment of history as an uncontrollable, unpredictable force of nature devoid of any patterns or scientific value, conservatism attempts to defend a system which it has yet to fully acknowledge: capitalism. As a result, it masks its ignorance with what is perhaps the oldest political bromide in human history: an appeal to tradition. Were he to awaken to the nature of his own contradiction, a “conservative” would find in his rejection of a “liberal”’s assertion of collective rights that he himself was appealing to a form of temporal collectivism all the while. When a liberal cries out for the rights of the living masses, the conservative retorts with a cry for the deceased or, at the very least, defunct. He constitutes his morality not upon his own perceptions and assertions of what is objectively good, but upon his grandfather’s. What is surrendered is no less than the most valuable quality of his being, “his basic means of survival- his only means of gaining knowledge.”[iv]

In metaphysics, capitalism rewards man with objective values for his efforts by acknowledging and securing the correlation between man’s use of his defining faculty, reason, and his success in a given endeavor. It is important to recognize those crucial factors of acknowledging and securing. Much like the U.S. Copyright Office does not grant patents and copyrights, it secures them, so capitalism does not presume to grant man his rationality, it merely permits him a political arena in which it can be fully exercised without obfuscation. Whether that faculty is directed to the design and manufacture of a new invention or whether it leads him to invest in the efforts of another, so long as he fully and faithfully utilizes his rational capacity, success will follow. Capitalism, by virtue of its consonance with objective reality, guarantees to man his self-determination, the knowledge that he and he alone is master of his own fate, and the peace of mind that existence is left open to be commanded so long as he is willing to obey its laws. Thus is the danger in arguing for capitalism, as many conservatives have and do, on the grounds of faith: by appealing to some ill-defined claims that capitalism and America are directly endorsed by religious doctrines, one commits the double fault of first appealing to religion in the management of a government explicitly devoted to the separation of church and state, then failing to objectively defend capitalism’s virtues in proper terms, thereby conceding to its detractors more ground than they could have ever dreamed of winning. In so doing, it is the realm of metaphysics that is surrendered by their implicit stance that, “Well, yes, in the earthly realm you may be justified, but…”, when all that was required to vanquish their enemies cries of irrationality was a firm defense of clearly defined concepts derived from objective reality.

If capitalism can be said to have prevailed in the fields of epistemology and metaphysics, then it is in ethics that we find its crowning achievement. No idea in the history of civilization has ever done more to end the seemingly infinite cycle of human sacrifice which so defined human events up until the last two hundred and thirty years. Only by capitalism’s implicit recognition of man as an autonomous, rational being and its rendition to him of what thousands of years of history had only found various ways of undermining, his own free will, did man finally come to see the potential for a world in which he might without impediment declare, “I swear by my life and my love of it that I shall never live for another man’s benefit, nor ask of another to live for mine.” Capitalism did this by, for the first time, setting man’s interests as consonant with those of his neighbors. Its detractors would claim that capitalism created some malicious state of existence by encouraging competition, setting man against man. The truth is quite to the contrary: where once there was the backbreaking, tooth-and-nail struggle between men over whose children would be fed, capitalism gave way to the civilized practices of mass-manufacturing, business strategy, and the tireless pursuit of greater efficiency– struggles of the mind which lead to increases in quality of life and life expectancy for all.

Most important, however, is not the ethical benefit yielded to those peripheral to the producer, but to the producer himself. Though other western societies had historically acknowledged some limited degree of property rights, no economic system had ever truly wrested itself from the archaic notion that a man’s property is his own only until another, more qualified party- either a king or the state- calls upon it. Capitalism was the first system to allow man a complete and explicit right to the products of his own mind and labor. It aligned his abilities with his degree of success and valued those qualities most essential to his nature. Just as man did not enter the world bound at the hip to his brother, so, capitalism asserted, should he not be bound by any politico-economic system which tried to force such a fissure by the altruist-collectivist moral code. Just as men desired the profits of their accomplishments, so, capitalism asserted, must they own the consequences of their missteps, misjudgments, and personal flaws. No man should be made to atone for his achievements as compensation for the inability of another. No man should be indicted for greatness.

In light of such a profoundly moral society, one may find astounding the ethical justification asserted by its purported defenders: that of the argument from depravity. Their “defense” consists of first renouncing man as inherently flawed, immoral, and limited in his knowledge and understanding of every detail of a society and its economy. Therefore, it argues, one is left to choose freedom not for its virtues, but by default, as the lesser of two evils. Let us, as Rand suggested, “grasp fully the implications of this argument: since men are depraved, they are not good enough for a dictatorship; freedom is all that they deserve; if they were perfect, they would be worthy of a totalitarian state… Thus they concede that socialism is the ideal, but human nature is unworthy of it[.]”[v] (Italics in original) In truth, most “conservatives”, when asked, would assert that socialism and, by extension, communism is ultimately a nice idea that just doesn’t work. No thought or mention is given to the question of why it doesn’t work, its inherent dissonance with basic human nature, its obfuscation of the correlation between ability and success, or its appeal to society’s lowest common denominator at the expense of its greatest. Instead, it is merely shrugged off as an unattainable ideal forbidden by man’s depravity and limitations. Thus, in response, all that is required of a “liberal” is the unqualified claim that he is of a sufficient moral and intellectual standing to confiscate the rights of individual men for the benefit of some undefined collective. Regardless of right or wrong, “[w]hen men share the same basic premise, it is the most consistent ones who win.”[vi] As such, “conservatives”, without having espoused a clearly defined moral defense of capitalism, render themselves helpless to refute the claims of the “liberal” as the “liberal” is to argue against the socialist, or the socialist against the communist.

If capitalism is to long-endure, it will be the result of having recognized and clearly defined the moral benefits attainable only in a capitalist society. Tragically, despite these virtues unrivalled by any system in the history of man, it remains, in the eyes of the majority, without objective moral grounding and is left subject to the libelous attacks of any brute in the boardroom, in the classroom, and in government. In order to defeat this, to expel the invasion of Attila and the Witch-doctor from these bastions of ideas, the greatest challenge is not in arguing for freedom as opposed to slavery or right as opposed to wrong. So long as one adheres unfailingly to reason, those arguments are impenetrable. The greatest challenge, instead, lies in showing them that there is an objective morality which is not, as collectivists would have one believe, subject to reinterpretations, contortions and degradations. History has irrefutably demonstrated that the degree to which a society adheres to that morality is the degree to which it succeeds; contrarily, the degree to which it deviates from it is the degree of its failure and, ultimately, the severity of its collapse. It is only by an explicit acknowledgment of the moral principles inherent to and inextricable from capitalism that one can begin to defend it. No argument from practicality can hope to save capitalism without first having asserted that, “man- every man- is an end in himself, not the means to the ends of others, that man must live for his own sake, neither sacrificing himself to others, nor sacrificing others to himself, and that men must deal with one another as traders, by voluntary choice to mutual benefit.”[vii] There can be no question that the realm of practicality rests soundly with the capitalists and advocates of freedom, but without first and foremost mounting a sound moral defense, one implicitly surrenders the realm of ethics to the collectivist and lends credence to the assault on the only social system which has ever fully recognized man’s right to his own existence.

The manifestations of the deplorably non-philosophical means by which the average person approaches the world he lives in are innumerable; the consequences, immeasurable. From classrooms come the silent screams of students subjected to the morally repugnant sermonizing of their professors who tell them that it is their duty to work tirelessly at study for years so that they might someday fulfill “society”’s use for them, that they are to partake of a political system in which guilt is a necessary condition, and that the greater their success in life, the greater their moral condemnation. Desperately, the youths look to their parents, elders, statesmen, and public figures. Finding only tired voices, furrowed brows, and the meager consolation that their assailants can only do so much, they enter the professional world stillborn and defeated. As businessmen, their very existence is cited as grounds for persecution and they spend years bombarded with such a myriad of undefined accusations that, having already been swindled of their self-esteem during their education and convinced that their lives would be spent in service to a society that despises them, many will ask, “Why not? Of what use are ethics when the worst is already assumed of me?” Among them, it will be the rarest of men who, out of an indomitable will and self-efficacy says, as Hank Rearden did, “I refuse to apologize for my ability- I refuse to apologize for my success- I refuse to apologize for my money. If this is evil, make the most of it. If this is what the public finds harmful to its interests let the public destroy me. This is my code- and I will accept no other.” (Atlas Shrugged)

Many- notably the “depravist” conservatives mentioned earlier- would argue that the state of the disheartened and desperate masses is an inevitable state inherent to human beings and that we must not hope to change it, but merely to adapt. Such a view can be expected from a group which has suffered most ingloriously from that fatal flaw common to both ends of the modern political spectrum and which is present at each stage of those individuals’ lives from their earliest education onward: an adherence to the altruist-collectivist code of ethics. Its advocacy in nearly every field of study and production into which man has endeavored has so obfuscated his sense of reality that those who have not surrendered are left with a prevailing unconfidence and a contradictory sense that though they believe themselves to be correct, they retain no objective rubric by which to make such bold assertions and must rely entirely upon non-objective, emotional claims to state their case. Never is this condition more explicit than when observing the desperate contortions of those who attempt to defend capitalism on improper terms and find themselves forever having to surrender ground to the assailants of freedom. They have, time and again, been rendered so handicapped by their own inconsistencies that it is a testament to the virtues of capitalism that what remains in this nation of a free economy has saved it from even further detriment and collapse.

Altruism has planted itself so firmly in our education systems, mass media, prevalent social conventions and perceptions that one generation after another has been robbed of its self-esteem, intellectually hounded to the state of pessimism, and sent into the world like a boxer into the ring with one hand tied behind his back, given the impossible task of saving it without the slightest trace of philosophical thought. If capitalism is to be saved, it is that strong arm of philosophy which must be loosed so that men might know that their thoughts, ideas, and beliefs do not exist in a vacuum unrelated to metaphysical reality, but are inextricable from it. They must understand that the history of humankind is not simply one of causeless events and random occurrences, but one of ideas which have acted as a motive force driving men to creation, destruction, invention, persecution, slavery, war, genocide, and, finally, in the last few centuries, a faint and glimmering prospect of redemption at the possibility that, should we ever come to explicitly define the morals and the ideas that make our economic system possible, we may someday wrest mankind once and for all from the cycles of depravity which have for too long made this species an enemy of himself. If man is ever to find his way out of the darkness he has made, it will be due to a proper and moral philosophy that acts as his guardian and guiding light. It is a struggle waged every day in our culture, never more explicit and pronounced than in the realm of politics and the blind assault on the only system to have ever recognized, protected, and honored the best among us and the best within us: capitalism.

[i] Rand, Ayn, Nathaniel Branden, Alan Greenspan, and Robert Allen Hessen. Capitalism the Unknown Ideal. New York: Signet, 1967. pg. 2.

[ii] Ibid., pg. 2.

[iii] Ibid., pg. 7.

[iv] Ibid., pg. 7.

[v] Ibid., pg. 222.

[vi] Ibid., pg. 218.

[vii] Rand, Ayn. “”Capitalism vs. Communism”” Speech. Second Renaissance. Web. 8 Aug. 2010. <;.


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