Any Internet political warrior will have seen, time and again, accusations leveled against capitalism for the woes that befall them or the societies which the accusers are white-knighting. Rebuttals that the woes they are ascribing to capitalism are far more accurately ascribed to statist policies and actions are typically ignored or contemptuously dismissed, no matter what analysis and logic is put forth. Certainly, capitalism isn’t perfect – nothing is – but the amount of blame it gets does defy logic. Why do so many people reflexively blame capitalism for the negatives of an economy or a society?
The answer is rooted, I believe, in our DNA. Humans are tribal in nature. Tribes were better at surviving and thus propagating DNA than lone individuals, and evolution programmed us with tribalistic tendencies. Humans are also extremely weak and vulnerable for more than a decade of life, and the only things that keep us alive long enough to be able to propagate DNA are the authority figures that are our parents. Both from the tribal angle and from the parental angle, we are hard-wired to seek and respect figures of power and authority. This hard-wiring also explains our affinity for religion, which provides the ultimately powerful and infallible authority figures.
Capitalism is scary for many because it doesn’t involve top-down management and lacks benevolent, powerful and controlling authority figures. Capitalism achieves its success via the voluntary, independent, and interconnected actions of millions of individuals, each pursuing self-interest. It is driven by Adam Smith’s “invisible hand,” and, as Milton Friedman observed, “the record of history is absolutely crystal clear, that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system.” Capitalism has faced down every other socioeconomic system in human history and come out ahead. Capitalism, despite endless interference by those who use force to bend societies and economies to their will (i.e. politicians and those who curry their favor), is what has produced the vast, vast majority of improvements in our wealth and standards of living. Unfortunately, it is persistently denigrated despite its long and unparalleled track record of success.
Some who denigrate capitalism do so for selfish reasons. It’s often easier to use force to enrich yourself than to compete in an open marketplace. Under capitalism, both parties engaging in a transaction do so because they perceive benefit for themselves. On occasion, the perception turns out to be incorrect (people sometimes make bad deals), but overwhelmingly, it is accurate, and both parties come away from the transaction with benefit. Forced economic transactions, on the other hand, aren’t driven by mutual benefit. The side of the transaction that’s in the weak and forced position doesn’t get to judge if the transaction is beneficial, and thus there’s no reason for the strong side to let it be. There’s less pressure on those who use force to provide goods or services that others truly want, so they can get away with offering less.
The ability to use force for personal benefit extends beyond basic transactions. It’s at the heart of most of politics today, including but not limited to the corporatism/cronyism that is the reality of our society and economy, and it is enabled and fostered by the biological distrust of leaderless arrangements. Authority figures are perfectly happy to exploit our tribalistic tendencies, and those who understand this exploit the authority figures.
Well, exploit is the wrong word here – THEY are the folks engaged in mutually beneficial exchanges. That is, politicians sell their power to wield force to those who will give them value (e.g. votes, either their own or those of the people THEY influence, campaign contributions, and more nefarious exchanges). Some label these exchanges as capitalism, but capitalism only involves force when it comes to the enforcement of contracts and the protection of property rights. It’s not capitalistic to mutually agree that one of the parties in an exchange is going to force others to do as the other party in the exchange demands.
It has been observed that human society has evolved faster than human biology, and that the evolved tendencies towards tribalism that made our species so successful don’t work at the sizes that our societies have grown to. This isn’t something that can be “fixed,” at least not until we have a FAR better understanding of human DNA (and even then, major ethical issues exist). It is a fact. We are wired a certain way.
Capitalism is a system that builds on this wiring. Each of us selfishly looks to benefit ourselves and ours i.e. our family, our “tribe” of a certain size. Those selfish pursuits, in the aggregate, produce the positive results that are attributable to capitalism. The structure of capitalism is such that everyone operates freely within a basic, disinterested and unbiased framework.
On the other hand, the various forms of statism exploit this wiring. Some rise to power by convincing others that they are the authority figures those others have biological cravings for. Those in power then use that power to force others to act in ways that are not necessarily in their best interests.
Because of our wiring, we tend to be suspicious of the former and forgiving of the latter (at least when we deem that those in power are of “our” tribe). Because of our wiring, we tend to misplace blame for things that are not ideal. Because of our wiring, we distrust that which has provided us the most benefit and continue to hope that that which has done us the most harm will somehow work differently “this time.”
It’s time we stop blaming capitalism for the failings of not-capitalism.
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