Capitalism creates inequalities.
Nature creates inequality. Different socio-economic systems reward different natural inequalities – intelligence, physical health, strength and beauty – with the incentives they create. Capitalism rewards the “bourgeois values” whose left makes fun of: economy, honesty, perseverance, hard work, prudence, tolerance and civility. Socialism rewards cruelty.
Material inequality is the inevitable result of material progress. If a new product is created, it is impossible for it to be distributed instantly and simultaneously to every person on earth. Thus, the first time that someone invented something – the stone hammer, perhaps – inequality has appeared instantly in the world.
To demand complete material equality is to demand the end of material progress.
Capitalism results in the concentration of wealth in the hands of a few.
Wealth is more concentrate In many socialist countries and with a socialist tendency (for example, South Africa, Zimbabwe and Nicaragua) only in free market countries. In addition, the free market automatically sees resources to those who use them most effectively to improve the lives of consumers around the world. In contrast, socialism and communism have historically channeled resources to the most ruthless and murderous: Lenin, Stalin, Mao Zedong, Castro, Pol Pot, Mugabe, Ortega, Chavez, Maduro.
Previously, trade meant the literal exchange of one good or service for another good or service. Today, this more often means the exchange of goods or services for paper debt recognition that we call “money”. In a free market, money is documentary evidence that the bearer has provided goods and services that others value, as evidenced by the fact that they have voluntarily exchanged the products of their own labor for them.
In other words, people with money in their pockets have benefited others but have not yet received anything comparable value in exchange. The idea that these people “owe to society” or should “give back to society” is exactly upside down. They don’t have to, they are due.
Unregulated markets lead to wealth inequality.
Regulated markets create even more inequalities. In fact, a large part of the regulations are designed to allow “wealthy” to keep and increase their material advantages. The problem of “regulatory catchin which regulators work to benefit the industries they were meant to control is very real.
First, when an agency is initially created, it needs experts on the industry it is supposed to oversee. Where can it go if not to the industry itself? Second, no one has a greater incentive to put pressure on the agency than regulated companies. Third, if the industry were to disappear, the raison d’être of the agency would also disappear, so that the employees of the agency have every interest in keeping “their” industry alive, even if it is at the expense of the consumers.
Finally, there is no “unregulated” market or “unfettered” capitalism. A company’s heaviest chains are forged by its customers and competitors. In a free market, no company, no matter how large, can survive for long if it does not satisfy its customers with products and services at least as good as those offered by its competitors.
Capitalism is a winner-takes-all game.
Free market countries tend to have the largest middle and upper classes, which means that most people who “play the game” do quite well.
Yes, the 1% own the lion’s share of “symbolic” or “paper” wealth, but they don’t own most of the physical wealth and they certainly don’t own more than a tiny fraction of the country’s human capital. (for example, knowledge and experience). Jeff Bezos is a multi-billionaire, but most of his wealth comes in the form of Amazon stock. It does not have a large part of houses, cars, planes, computers, televisions, microwaves, dishwashers, washing machines, etc. from the country. Confiscating his wealth would mean he would have to sell his shares on Amazon, which would reduce his value, causing much, if not most, of that “wealth” to disappear.
Most of us are neither geniuses nor inventors, but the free market allows us to benefit from the genius and inventions of others. When someone “wins” and gets richer by producing a good or service that improves our lives, we win too.
Capitalism turns workers into wage slaves.
Slavery is an economic system in which people can arbitrarily demand time, labor and products from others. Socialism is an economic system in which politically favored can arbitrarily require time, work and products from others.
In a capitalist system, no one can enslave me or force me to work. But at the same time, I cannot enslave others either; I cannot force them to provide me with food, clothing and shelter. If I want these things, I either have to make them myself – in which case I’ll probably live in abject poverty – or I have to produce goods and services that I can trade for them.
Capitalism rewards merit and rewarding people based on their merit is discrimination.
Well yes. Selecting people with merit is discrimination-that is to say “recognition and understanding of the difference between one thing and another”.
But if I’m faced with having to choose between applicants – whether for a job, a promotion, or getting into a college or a club – I’m forced to, well…choose. And if I have any basis for making the choice, then I look for the differences between one person and another.
My responsibility to my organization requires me to discriminate on “merit,” as defined by the traits that my organization believes will best advance the organization’s goals.
Capitalism fuels corruption.
After the Civil War, companies repeatedly tried and failed to form cartels to keep prices high and prevent competitors from entering markets. Each attempt failed because none of the cartels could use force to stop cartel members from cheating. The incentives to lower prices and take market share were too great.
The problem was “resolved” during the The progressive erawhen the government created cartels to prevent “ruinous” competition and created agencies such as the Interstate Commerce Commission, Federal Trade Commission, and Federal Reserve Bank to enforce the rules.
FDR’s New Deal extended the cartels to agriculture and the auto and airline industries, while LBJ’s Great Society Medicare and Medicaid programs extended them to health care.
In short, the progressives have created cartels and monopolies supported by the government and now blame capitalism for the unfortunate results.
Read part 1 here.
Richard Fulmer has worked as a mechanical engineer and systems analyst in industry. He is now retired and writes freelance. He has published over 50 articles and book reviews in free market magazines and blogs. Along with Robert L. Bradley Jr., Richard wrote the book Energy: The Master Resource.