Salsman: Capitalism Isn’t Corporatism or Cronyism

Another great one by Richard Salsman:

Capitalism is the greatest socio-economic system in human history, because it’s so moral and so productive – the two features so essential to human survival and flourishing. It’s moral because it enshrines and fosters rationality and self-interest – “enlightened greed,” if you will – the two key virtues we all must consciously adopt and practice if we’re to pursue and attain life and love, health and wealth, adventure and inspiration. It produces not only material-economic abundance but the aesthetic values seen in the arts and entertainment.

But what is capitalism, exactly? How do we know it when we see it or have it – or when we haven’t, or don’t?


Capitalism has been blamed for the Great Recession of 2007-2009 and
for the financial crisis and bailouts of 2008, but it’s not “capitalism”
but the mixed economy and corporatism-cronyism that did it. We’ve had
corporatism in the U.S. for roughly the past century, and it’s getting
worse over time; it’s also the system we’ve seen in Europe since at
least the time of Germany’s Otto von Bismarck, who launched the
womb-to-tomb welfare state in the 1870s. In the interim, of course,
Europe also imposed communism, socialism and fascism. The result, we
know, was mass murder, world war, and the continent-wide destruction of

Capitalism’s greatest intellectual champion, Ayn Rand (1905-1982),
once defined it as “a social system based on the recognition of
individual rights, including property rights, in which all property is
privately owned.” This recognition of genuine rights (not “rights” to
force others to get us what we wish) is all-crucial and it has a
distinctive moral foundation, according to Rand:

recognition of individual rights entails the banishment of physical
force from human relationships: basically, rights can be violated only
by means of force. In a capitalist society, no man or group may initiate
the use of physical force against others. The only function of the
government, in such a society, is the task of protecting man’s rights,
i.e., the task of protecting him from physical force; the government
acts as the agent of man’s right of self-defense, and may use force only
in retaliation and only against those who initiate its use; thus the
government is the means of placing the retaliatory use of force under
objective control.” “The moral justification of capitalism does not lie
in the altruist claim that it represents the best way to achieve “the
common good.” It is true that capitalism does—if that catch-phrase has
any meaning—but this is merely a secondary consequence. The moral
justification of capitalism lies in the fact that it is the only system
consonant with man’s rational nature, that it protects man’s survival
qua man, and that its ruling principle is: justice.

Elaborating, Rand explained in Capitalism: The Unknown Ideal
(1966) that historically, politically, economically, and morally,
capitalism was the superior socio-economic system, yet also how, for
decades, its achievements and virtues had been hidden and buried
deliberately in an avalanche of prejudice, distortion, and falsehood.
Rand argued that capitalism is a moral ideal yet also was made real, and
to the greatest extent, in America in the 19th century,
especially during the Gilded Age (1865-1890). Thus she called the U.S.
“the greatest, the noblest and, in its original founding principles, the
only moral country in the history of the world.”

Read the rest of Capitalism Isn’t Corporatism or Cronyism over at Forbes.

  • Anonymous

    Actually, corporate capitalism and crony capitalism are the proper terms – and for good reason: they are merely different facets of the same evil called capitalism.
    Capitalism is neither moral (really, not at all), nor particularly productive; in fact, it is quite wasteful. It does not foster rationality, but it does foster and celebrate selfishness and egoism (and egotism, for you, randroids).
    The rest about about love (etc.) is simply pure crap.
    Just for the record: capitalism is directly or indirectly responsible for the most terrible wars, mass murders and the world-wide destruction of humanity.
    Just think of Congo Free State – privately owned by the greatest capitalist who has ever lived (at least by the number of victims) – Leopold II of Belgium. It was really a show window of capitalism: more than 70 % of the population perished, often by torture.
    By that time it was well-known that imperialism is the highest form of capitalism.
    And then came fascism = state corporative capitalism (by definition), established to fight against popular communist revolutions, with the aim to save capitalism. (For capitalism had 3 stages: dynamic capitalism, static capitalism and decadent capitalism – also known as supercapitalism.)
    Fascism bred nazism, or racial fascism. World War I was directly caused by the highest form of capitalism – imperialism. And World War II was a direct consequence of the results of World War I and the fatal crash of capitalism in 1929.
    In fact, capitalism celebrates and thrives on the same underlying principles as nazism: social Darwinism.
    It was communism that defeated both fascism and nazism.

    • Christopher Freeman

      I see what some are still easily fooled and still promulgate the lies and propaganda of socialism.

      All wars are the direct result of the fascism of the International Banking Mafia and not as you say that evil capitalism.

      1929 was not the fatal crash of capitalism but the end result of the Marxist central bank. A premeditated plan to bankrupt the united States of America and steal the wealth of the most productive people in the world.