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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
wealth.

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:


The
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.