Capitalism (and entrepreneurship) are based upon the coercion that creates rights. Capitalism, like fire, is most valuable when it is used only for desired purposes (regulated), not burning indiscriminately. For example, as part of Mixed Economy or Social Democracy. Bartering and other exchanges, even in markets, do not make capitalism: private ownership of the means of production does. Indeed, markets are not distinctive to capitalism; they exist in all economic systems more sophisticated than a hunter-gatherer economy. A major problem of capitalism is that generally the upper classes rob the lower classes.
Frequently it is claimed that capitalism is responsible for alleviating world poverty. Yes, some. But Communism was also successful at alleviating poverty in the Soviet Union and China. Science (mostly publicly funded), public Education and Democracy can also take credit as well. Attributing it all to capitalism is greedy reductionism.
- Defining Capitalism [More...]
- A section of "Understanding Capitalism" by Geoff Price. Capitalism is a form of collectivist production, differing primarily in how the products of collective labor are distributed: between owners and workers. Well written and easy to follow.
- What is Capitalism? [More...]
- "The term “capitalism” gets thrown around an awful lot, both by those who take it to represent one of humanity’s great innovations, and those who take it to represent a system of oppression. But what is capitalism, such that it might be a scourge or savior? "
- Capitalism Is Coercive (6 links)
- Libertarians pretend that there is no coercion in capitalism, but its foundation in private property is coercive and allows further coercion through economic power and Private Government.
- 23 Things They Don't Tell You About Capitalism (book, online) (1 link)
- A strong proponent of mixed economies details many problems of unregulated capitalism.
- The Economy (1 link)
- Capitalism and Markets are only parts of the economy: the economy is a very heterogeneous system that includes government production, domestic economy, and gift transactions. Libertarian focus only on vanilla capitalism and markets makes easy ideology, but ignores vast and important swathes of the real economy.
- A Brief Anti-Economist History [More...]
- "The conclusion is clear, and something I have said before: western capitalism is neither harmonious nor natural. It is a product of specific historical circumstances, some of which were incredibly brutal. "
- Alternatives To Current Capitalism (22 links)
- Pitting "free market capitalism" against "socialism" is a false dichotomy. There are numerous variants and alternatives to study and choose from.
- Anthropology and Scientific Psychology (9 links)
- Libertarian philosophy and ideology (and indeed almost all economics) omit basic facts of anthropology, such as the fact that humans naturally engage in gift networks and sometimes barter, but that markets are unnatural to our psychology. They also usually ignore scientific psychology findings in favor of pop psychology. Capitalist exploitation relies on this fact.
- Capital in the Twenty-First Century (book) (14 links)
- This book shows how policies concentrate wealth in the hands of the .01%, increasing inequality. Libertarianism has always been sponsored by the extremely rich, and their positions have favored these policies or worse.
- Capitalism as a heterogeneous set of practices [More...]
- "From this perspective it becomes possible to see our economy as a complex ecosystem of competing and interacting economic forms, each with their own strengths and weaknesses, and to develop a progressive politics that seems to reshape that ecosystem rather than pursuing the imaginary perfection of one single universal economic form."
- Capitalism is the best economic system ever devised. (Not!)
- A remarkable propaganda statement that relies on the vagueness of "best", doesn't say which variant of capitalism, and requires you to overlook the fact that capitalism must necessarily be only a part of real economic systems (which include family and government production and exchange.)
- Capitalism Whack-A-Mole [More...] (1 link)
- "There is no general framework of morality or justice that supports laissez-faire capitalism. This is a problem of course for those who wish to argue on behalf of it. When you talk to such people, a familiar argumentative pattern emerges that I have come to call Capitalism Whack-A-Mole."
- Real Life Capitalism Whack-A-Mole [More...]
- "I taped a TV segment today with the Ayn Rand Institute’s Don Watkins about his book “Equal Is Unfair.” My sole goal going into the segment was to see if I could produce a Capitalism Whack-A-Mole in the wild."
- Capitalism, Markets and Laissez-Faire (15 links)
- Libertarian ideology worships these gods with feet of clay, and wishes no limits to them. History and common sense tell us that limits must be imposed on them, they must be regulated.
- Capitalist Crime (3 links)
- Criminality by capitalists is obviously the easiest way for them to increase their capital when they can get away with it. Mortgage fraud alone has stolen billions of dollars. Capitalist criminal behavior steals at all levels, from individual thefts to defrauding the government of billions. Corporations and too-big-to-fail make evasion of responsibility easy.
- Capitalist Harms (65 links)
- Capitalism doesn't shy from harming people if it is profitable. Capitalism creates slavery, pollution, disease, fraud, inequality, exploitation, black markets, organized crime and other harms. Even worse, it subverts efforts to regulate these harms by government. The overall theme is privatization of profits and socialization of costs. Capitalism largely operates through corporations, which need to be reined in.
- Capitalist success is meritocratic and thus deserved. (2 links)
- The same way the scum floats to the top? Because libertarians usually define merit as success in capitalism, this begs the question. Meritocracy still has the problem of rule by a small clique. Positive feedback in markets makes success very much dependent on random initial conditions.
- Capitalists are not your friends.
- Libertarians are cheerleaders for capitalists and capitalism. But as a worker, a consumer, or even as another capitalist, capitalists are not your friends. Not theoretically, and not in real life.
- Corporations (26 links)
- Corporations are creatures of the state, our first-class citizens, government created systems of privilege used to concentrate wealth. They are a fundamental part of our current capitalist system. Libertarian individualism seems to ignore this basic problem. A few libertarians (and some others) oppose corporations for that reason. Giant corporations exercise private tyranny because they are unaccountable to the public.
- Crony Capitalism (8 links)
- Capitalist corruption of government for private gain. Sometimes mislabelled Corporatism. Libertarians use this term to describe any government/capitalist relationship they do not like and to excuse bad behavior by capitalists. But all capitalism is fundamentally crony capitalism because government favors owners with systems of property. Corporations, with their special privileges, are an especially clear example. Crony Capitalism is one type of Privatization of Power, and is practiced by the major funders of libertarianism.
- Desert-Sacrifice-Utility Whack-a-Mole [More...]
- Another common shifting of arguments to support capitalism is from desert justifications to sacrifice justifications to utility justifications. Each one can be shown to fail as a valid justification.
- Ethical Assumptions in Economic Theory: Some Lessons from the History of Credit and Bankruptcy [More...]
- Capitalism does not "distinguish between free contracts and contracts into bondage, or between agreements reached by self-debasement or a dignified offer." Thus it will "often require constraints on the scope of freedom of contract and property rights, against the laissez faire ideal."
- For Whom the Wall Fell? A balance-sheet of transition to capitalism [More...]
- Switching to capitalism has a very low success rate over 25 years: "Only three or at most five or six countries could be said to be on the road to becoming a part of the rich and (relatively) stable capitalist world. Many are falling behind, and some are so far behind that they cannot aspire to go back to the point where they were when the Wall fell for several decades."
- History of Economic Thought, 3rd Edition: A Critical Perspective (book, online)
- A readable textbook that will clarify your understanding of the pitfalls of different economic ideas, starting with the "invisible foot of the market".
- How Natural is Capitalism, Exactly? [More...]
- "The fact is that capitalism is a highly planned system with a questionable history -- there is nothing ‘natural’ about it."
- Invisible Foot (1 link)
- A term used by E. K. Hunt to describe the second half of the capitalist incentives to privatize gain and socialize costs. It increases private gain to create negative externalities (such as pollution) rather than bear their costs: thus negative externalities will be maximized "as if by an invisible foot". See also the propaganda term Invisible Hand.
- Laissez Faire (17 links)
- Laissez faire is a hypocritical propaganda term: it is government that creates a capitalist environment, advantaging capitalists over others. Unregulated Market is a more honest term. History shows pretty clearly that unregulated, unfettered capitalism is a brutal environment where wealth accumulates in the hands of an elite leaving most people in poverty, deeply vulnerable to the inevitable economic shocks that follow.
- Libertarians are very confused about capitalism [More...]
- Elites didn't get rich off of some “free market.” Here's why libertarians should back radical wealth redistribution. Socks Rand Paul and Murray Rothbard for ignoring the coercive origins of capitalist wealth.
- Literature Critical of Capitalism
- Capitalism is criticized in a great deal of literature. This isn't necessarily opposition to ANY capitalism, but rather a call to limiting its harms.
- Market Efficiency (1 link)
- Market efficiency is the great benefit of capitalism, but capitalists hate it because it means low profits. Capitalists battle market efficiency through monopoly, marketing and other assaults on the assumptions of Free Market Theory. Except, of course, when they are arguing for free trade.
- Markets Are Created By Government (6 links)
- Modern markets rely on stable property, transportation, currency, educated workers and customers, and other factors with enormous market failures. Remove the government infrastructure of these, and markets will shrivel.
- Monopoly, Oligopoly, Market Power and AntiTrust (31 links)
- Capitalists unendingly seek monopoly, oligopoly, monopsony and oligopsony as routes to the highest possible profits. All are inefficient according to ordinary microeconomics. This is a huge, measurable cost. Capitalists cannot self-regulate this problem away: government must.
- Propaganda, Marketing and Public Relations (4 links)
- Major industries whose entire purpose is to create impressions without regard for truth. This enables manipulation of the masses for greater power and profit. All work with the same principles.
- Rent Seeking (1 link)
- Libertarians often blame government for rent seeking behavior. That is the fault of capitalist entrepreneurs themselves, who lobby government to put in place obstacles for competitors.
- That’s Just Capitalism [More...]
- "To put it in the simplest terms: the libertarian populist says that rigged capitalism creates huge inequality, but the truth is that unrigged capitalism does the same thing."
- The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives (book) (1 link)
- "Usually, private ownership creates wealth, but too much ownership has the opposite effect -- it creates gridlock. When too many people own pieces of one thing, whether a physical or intellectual resource, cooperation breaks down, wealth disappears, and everybody loses."
- Three sentences no one should forget about unions [More...]
- "[...] unions are inherently conservative institutions, which historically developed parallel with the development of capitalism itself. They are as much a part of capitalism as Henry Ford or Apple. Unions use contracts -- and there's nothing more intrinsic to capitalism than the right of contract -- to link their members to the fortunes of the companies they contract with."
- Tragedy Of The Commons (3 links)
- The tragedy of the commons is an economic theory of a situation within a shared-resource system where individual users acting independently and rationally according to their own self-interest behave contrary to the common good of all users by depleting that resource. But there is only a tragedy of an UNREGULATED commons, as history has shown. Regulation is an obvious workable solution.
- What are the myths of capitalist economics? [More...]
- An anarchist overview of problems of economics, exploitation, distribution, big business, and false claims of capitalist benefits.
- What's Wrong With Libertarianism [More...]
- Jeffrey Friedman, editor of Critical Review. thoroughly skewers four books on libertarianism. "Libertarian arguments about the empirical benefits of capitalism are, as yet, Inadequate to convince anyone who lacks libertarian philosophical convictions. Yet ‘philosophical’ libertarianism founders on internal contradictions that render it unfit to make libertarians out of anyone who does not have strong consequentialist reasons for libertarian belief. The joint failure of these two approaches to libertarianism explains why they are both present in orthodox libertarianism -- they hide each other’s weaknesses, thereby perpetuating them." Reviewed: Libertarianism, A Primer, by David Boaz; Classical Liberalism: The Unvanquished Ideal, by David Conway; What It Means to Be a Libertarian, by Charles Murray; Bringing the Market Back In, by John Kelley.
Though free market theorists are reluctant to admit it, capitalists are not fond of free markets, since open and fair competition forces them to invest in product development while they cut their prices. Monopoly and the destruction of competition is the ideal condition for the entrepreneur, and he will strive to achieve it unless restrained not by conscience but by an outside agency enforcing “anti-trust” laws.
Ernest Partridge, "A Dim View of Libertarianism, Part VII -- Some Concluding Questions"
Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate.
Bertrand Russell, Sceptical Essays (1928), Chapter 13
The bloodstained story of economic individualism and unrestrained capitalist competition does not, I should have thought, today need stressing. Nevertheless, in view of the astonishing opinions which some of my critics have imputed to me, I should […] have made even clearer […] the evils of unrestricted laissez-faire.
Isaiah Berlin, "Four Essays on Liberty"
Freedom for the wolves has often meant death to the sheep.
Isaiah Berlin, "Four Essays on Liberty" p.xlv.
Libertarian capitalism... is a curious ideology in many ways... On the one hand, the sanctity of private property and private contracts is held to be a matter of inalienable natural right, guaranteed by the fundamental facts of morality, if not a basic part of Objective Reality; capitalism is the Right Thing to Do. On the other hand, much effort is devoted to arguing that unfettered laissez-faire capitalism is also the economic system which will produce the greatest benefit for the greatest number, indeed for all, if only people would just see it. Natural right therefore coincides exactly with personal interest. A clearer example of wishful thinking could hardly be asked for.
Cosima Shalizi, "Liberty! What Fallacies Are Committed in Thy Name!"
Those who "abjure" violence can only do so because others are committing violence on their behalf.
George Orwell, "Notes on Nationalism" May, 1945
The state is the necessary but not sufficient pre-condition for capitalism’s development. There is no creative destruction, competition, innovation, and accumulation without the “shadow socialism” of the public sector and state planning.
Christian Parenti, "Reading Hamilton From the Left"
[...] a huge part of the problem is the Jeffersonian notion that “the government that governs best is the one that governs least.” While that is true as regards individual liberty, it is absolutely dangerous to think that way as regards the economy.
Christian Parenti, "Reading Hamilton From the Left"
The basic competitive-markets model dating back to Adam Smith has been modified over time by the inclusion, in rough historical order, of monopoly, externalities, scale economies, incomplete and asymmetric information, irrational behavior, and many other real world features.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
Neoliberalism and its customary remedies -- always more markets, always less government -- are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
There is nothing wrong with markets, private entrepreneurship, or incentives -- when deployed appropriately. Their creative use lies behind the most significant economic achievements of our time. As we heap scorn on neoliberalism, we risk throwing out some of neoliberalism's useful ideas. The real trouble is that mainstream economics shades too easily into ideology, constraining the choices that we appear to have and providing cookie-cutter solutions.
Dani Rodrik, "Rescuing Economics from Neoliberalism"
To demonize state authoritarianism while ignoring identical albeit contract-consecrated subservient arrangements in the large-scale corporations which control the world economy is fetishism at its worst.
Bob Black, "The Libertarian As Conservative"
The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
Adam Smith, "The Wealth of Nations", last sentences in conclusion of Book 1.
For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life.
John Maynard Keynes, "The end of laissez-faire"
We live in capitalism. Its power seems inescapable. So did the divine right of kings.
Ursula K. Le Guin at the 65th National Book Awards on November 19, 2014.
But under capitalism some are more equal than others...
Iain McKay, "What it means to be libertarian (Anarchist)"