Redefining Capitalism

‘When I use a word,’ Humpty Dumpty said, in rather a scornful tone, ‘it means just what I choose it to mean – neither more nor less.’

I’ve long criticized President Obama, his spokespeople and his supporters for playing fast and loose with the definition of and the intent behind words. This, apart from the bald-faced lies like “you can keep your insurance plan if you like it” and “we are not spying on American citizens.” A couple examples:

¥ÊCivilian deaths due to drone strikes have been downplayed and obscured by redefining the term “militant” to include all adult males who happened to be within collateral damage distance of the drone strike target. So, the kid delivering kabobs to the house at the wrong time gets dubbed a “militant” until his family proves otherwise.

¥ÊIn Syria, we engaged in “kinetic military action,” not warfare or bombing people.

¥ The legal justification for drone strikes against Americans involved their presenting an “imminent threat of violent attack.” However, “imminent” apparently doesn’t mean “very soon,” but rather whatever the government decides it does at the time.

A full list would fill pages. Of course, this isn’t anything new. Lying and word-smithing is as natural for politicians as swimming is for fish (Truman called Korea a “police action,” “Clinton redefined “is”, Nixon was Nixon), but as government grows and as its hunger for power and control expands, the examples get more egregious. Consider how the words “fair,” “poor,” “unemployed,” “bipartisan,” and “rights” are either used so loosely as to mean whatever the speaker or writer wants them to mean, or are used wrongly.

Which brings us to the word “capitalism.” To hear statists rail against capitalism, you’d think that it is the sole cause of all evil on planet Earth. Yet if you listen beyond the initial declaration of “Capitalism is Bad” to the particulars of their complaints, you will very likely hear activities attributed to it that have nothing to do with capitalism or definitions of the word itself that are just flat-out wrong.

Although Orwell never used the word itself, his writings warned us of “doublespeak,” the deliberate misuse of words in order to disguise their meanings. “Capitalism” has fallen under such an attack. Those who blame it for society’s ills certainly aren’t talking about how to make capitalism work better. Rather, if Capitalism is Bad, then Not-Capitalism must be Good. Thus the continued intrusion of the state into our lives is justified. Justified on a lie, of course, but that’s a message that doesn’t filter into most people’s heads. Complaints about the failures of capitalism often unchallenged, because the complaints themselves are legitimate. The mis-blaming of capitalism isn’t noticed, because it’s been so common for so long that most don’t think to challenge it.

Capitalism is not anarchy. It is not “survival of the fittest,” or domination of the strong over the weak, or the law of the jungle. It is not the wealthy or well-connected colluding with government or having laws and regulations written in their favor. It is not big corporations seeking handouts from government in exchange for campaign contributions or other compensation. It is not indenture or enslavement.

A dictionary definition of capitalism:

an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Note what’s absent from this definition – any mention of government and any mention of coercion. Capitalism is, at its core, the free and mutually beneficial exchange of goods and services between entities within a system that recognizes and protects individual property rights. The last, along with the enforcement of contracts, is the government’s role in capitalism. In fact, we can express the entire duty and obligation of the federal government in a free society as national defense, the protection of individual and property rights and the enforcement of contracts. Those activities, and those activities alone, are government’s proper role in, interaction with and support of capitalism, free markets and economic liberty.

Contrast this definition and concept with how our and other Western societies operate. Every exchange of goods and services I can think of has some sort of government involvement. Every good and service we buy and sell has been subject to a laundry list of government agencies and involvements. Every transaction is subject to various forms of taxation and financial management. Even the medium of exchange – money – is not free of governmental interference. Capitalistic activity has, in our modern society, been thoroughly entwined by government, and as time marches on, that entwining becomes more pervasive and more dominating. The more government is involved, the less “market forces” i.e. the aggregate of all our choices, preferences, needs, wants, opinions and predilections (ever-changing that they are) hold sway over economic activity.

Government has long justified its involvement in economic matters by claiming that market forces “fail” i.e. have undesirable or less than optimal outcomes in certain situations, with certain goods or certain services. Yet if government interference doesn’t produce a more desired or more optimal set of outcomes, then that interference should be found at fault, not capitalism itself. Yet perpetual blame of capitalism, even when it is a FAR smaller component of outcomes than statism, is what the statists reflexively, persistently and pervasively do. So ubiquitous is this finger-pointing that it has clouded the meaning of “capitalism” beyond recognition in the eyes of many laypersons. Statists are all too happy to exploit this ignorance and these misconceptions, letting capitalism take the perpetual fall for the failures of government. So, when a billionaire gets his pal the senator to write laws that favor his companies at the expense of others or the taxpayer, when a major corporation gets a government bailout, when some big developer gets the local pols to eminent-domain him some small businesses so he can build his shiny new stadium, when we find out that a pol who voted a certain way got a big fat political contribution prior to that vote, capitalism wrongly takes the fall.

On top of this mis-definition, or perhaps because of it, we hear people (and not just statists) railing against “crony capitalism,” a term that has been assigned to our current system, where the well-connected in big business work in collusion with politicians, often in the shadows or out of direct sight. The public outcry about this behavior is welcome, but the term itself is terribly misleading. As I described above, there is no room in real capitalism for government interference in economic decisions, government assistance for individual businesses, markets or industries, or government obstacles emplaced against competitors, foreign or domestic. “Cronyism” is a better term. Better yet is “economic fascism,” but the connections and connotations of that “F” word are too strong for it to be used without hue and cry from the public.

Words matter, and they matter more than ever in the era of sound bites, short attention spans and 140 character limits on Twitter posts. The battle for the words themselves is a vital one, and in the case of the word “capitalism,” it behooves us to defend it against false and misdirected accusations. Capitalism is a powerful force for good – for the improvement of our lives and the lives of others. It has been the source of the greatest periods of advancement in human history, and has won out over the most stifling and stultifying political systems conceived by man. It’s a word that should be embraced wholeheartedly, without dissembling or equivocation, and when others misuse it, we do ourselves and the cause of liberty real harm by allowing those misuses to go unchallenged.