The Moral Defense of Capitalism
By Joel F. Wade - August 08, 2011

One reason that our founding principles are in such deep trouble today is that many years ago our parents and grandparents… and great grandparents, conceded to the enemies of freedom the moral high ground.

Those advocating socialism, communism and fascism were given credibility by the progressive movement, and the progressive movement was given credibility by generations of clueless Americans.

These ideas, brought to America by scholars who had studied in Germany during the 1800s, claimed to advocate compassion and enlightenment. These zealous scholars had a vision of transforming America from her founding principles to the more "modern" and forward thinking principles of commanding and directing government power to change people, to make them better.

Of course, what they were doing was replacing the most radical and benevolent system that the world has ever seen with the most evil and destructive ideals – to be realized with the most ancient of tools: brute force.

If we are to reclaim the political high ground in the fight for liberty, we must also hold, clearly and unequivocally, the moral high ground as well. Here, therefore, is part of what I see as the moral case for capitalism and the free market principles that allow the full creative and productive forces of capitalism to flourish.

1) Capitalism creates value.

The entire purpose and function of capitalism is to facilitate the creation and production of value — goods and services that add to a person's life and quality of life. Capitalism encourages creative, productive efforts toward fulfilling the needs and desires of others.

We take completely for granted the incredible foundation of value, which has been our inheritance from previous generations, through the free exchange of goods and services. We get used to whatever our conditions are to such a degree,that most people never bother to consider what it would be like if there were no capitalism.

Very simply, we would be living and working with a single stone tool that mankind's ancestors used for a million years. And our fundamental means for acquiring wealth would be warfare more brutal than most of us can imagine.

2) Capitalism encourages long-term planning, discourages impulsiveness and self-indulgence, and therefore facilitates the development of civilization, peace and prosperity.

If you want to create something of value, you have to think. You have to take the time to learn and practice skills and connect long threads of cause and effect in order to bring into the world something that did not exist before. And this something has to be useful or desirable for other people.

Because you have to consider the needs and desires of others, this requires you to develop empathy. You have to be able to think about and understand what other people's internal experience is, which means that you have to develop the skills that allow you to get a glimpse of what other people think, feel and desire.

You have to be able to make contact with other people in a peaceful manner, which means that you have to develop manners and other social skills. Capitalism encourages more extraverted behavior and more vigilance regarding how your own behavior affects others.

Capitalism also encourages the transmission of hard won intellectual, emotional and social skills across generations. What you have learned you want to pass on to your children and grandchildren, students and peers so that they continue to develop what you have learned indefinitely into the future.

This is what civilization is built upon, and it is the definition of culture. Mankind is unique in the world in that we have culture. Wolves are social, a herd of buffalo is social, a pod of dolphins is social; but we transfer knowledge and tangible expressions of that knowledge across generations.

We do this because we have the mental capacity to do so, but it is capitalism that encourages us to use that mental capacity, and to use it in such a way that we create improvements upon what has been created before.

3) Capitalism facilitates the development of long-term individual personal satisfaction and happiness in life. This in turn encourages people to engage in personal virtue – the virtue of happiness.

We have within us the impulses and desires that can lead us toward short-term pleasures and actions which can do great harm to ourselves and others. We can be violent, we can be abusive, we can be self-absorbed, and we can be totally oblivious to the effect that we have on others.

To indulge these impulses and desires personally on a regular basis is to create a life that is destructive, dangerous, painful and short. To encourage such a lifestyle as a culture is to create a living hell on earth.

Capitalism makes it supremely worthwhile for us to do something completely different.

We also have within us the capacity to think, to plan, to envision the potential consequences of our actions; to learn from our mistakes, and from the responses of others.

The more we use this capacity, the more we develop an appreciation for the great personal satisfaction and happiness that can follow from paying close attention to what we do; and we learn, in continually greater depth, how what we do affects ourselves and others.

Capitalism creates the external circumstances whereby using this capacity is a benefit. It is these long-term, self-reflective, empathic and externally focused qualities that make possible the great array of personal virtues – gratitude, courage, empathy, productivity, creativity, forgiveness, integrity, compassion and perseverance, to name just a few.

4) Capitalism encourages us to cooperate.

"Dog eat dog competition" is an enduring image created by capitalism's enemies. But it is the kind of brute force employed by statism that fuels such violence.

The competition of capitalism can be intense and difficult, and failure is an integral part of it. But in order to be successful at anything in business, you have to cooperate with other people, work together with other people and learn from your mistakes and failures. The better you are at this, the more possibilities you will create in the future.

It is your competitors in business who force you to hone your skills, keep up on the best practices and provide the best products and services for your customers. In this sense, your competitors are your allies – they are not out to destroy you personally; they are in competition with you, engaged in an active relationship that keeps each of you on your growing edge.

Our forefathers and mothers made the mistake of accepting socialism's moral claims. They accepted the progressives' claims of virtue in the form of compassion and they were seduced by their vision of a better world, with better people. We can forgive them for this, as they did not have the benefit of the past one hundred-plus years of witnessing the contrast and the results of such idealistic visions that we have.

I vividly remember my (conservative) grandmother saying that, "Socialism may be a good idea in theory, but it just doesn't work." What she – and millions of others – did not understand is that the theory stinks as well.

What they did not understand is that the progressives, the socialists, the communists, the fascists… the statists of all stripes – those advocating the use of government power to mold and shape human beings into the image of the wielders of that power – had nothing to compare with the benevolent power of voluntary exchange.

The contrast between capitalism and all forms of statism is as stark as the difference between what happens when a lumber company owns their own land versus when they have a short-term lease on government-owned land.

When a company owns their own land, they have an incentive to take great care of that land. Their concern is with long-term productivity, so they harvest just enough trees so that they can replace those trees over time and still have more for next year's harvest.

When a lumber company has a short-term lease, their incentive is to get as many trees cut down as quickly as possible before their lease runs out.

Capitalism leads to civilization, long term planning, empathy and the continual creation of greater value.

Statism leads to the personal and cultural equivalent of clear-cutting.

Capitalism encourages the ambitious man to think, "What can I create and/or produce that would be of value and benefit to others, enough so that they would willingly and gladly exchange their hard earned money for it? How could I communicate with them and persuade them of this value? How could they best put it to use?"

Statism encourages an ambitious man to think, "How can I get more power to do my will, by using force to compel my ideals – well intentioned or evil – upon others?"

In the honest contest for the moral high ground between capitalism and any form of statism there is no contest. It is capitalism that has made us human.

It is capitalism that encourages us to bring out the best in our nature, to consider the experience of others and to work together peacefully to make good things happen.

It is the Founding Principles of the United States of America, as envisioned in the Declaration of Independence and as set forth with crystal clarity in our supreme law of the land, the Constitution, that have brought those qualities to bear with more energy and effectiveness than the world has ever seen.

The moral defense of capitalism is not ambiguous, and it is not a matter of opinion. It is as clear and bold as war versus peace, freedom versus slavery, human sacrifice versus empathy and love.

Let's learn from the mistakes of our elders, and boldly affirm the goodness of our inheritance, a free, vibrant and ingenious country, based upon the greatest social force for good: the relationships of exchange made possible through capitalism.

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