Can Capitalism Be Saved?

Capitalism, as a system of economic liberty, is in danger of being overthrown. This is a fact that many people know nothing about; for it centers on the subject of economics, which is beyond the comprehension of most citizens. Economic liberty and free markets are in decline at present because socialism is once again on the march. “Socialism is the watchword and the catchword of our day,” wrote Ludwig von Mises in his classic work on socialism. “The socialist idea dominates the modern spirit. The masses approve of it. It expresses the thoughts and feelings of all; it has set its seal upon our time.”

The forces that threaten the free market are many. Who dares to stop them? The advocates of the free market appear to be outgunned, though their case can be eloquently made. Every reader would profit by watching the classic video “If I Wanted America to Fail,” which summarizes the inverted policies that hamper the successful operation of our market system. And as our country depends on freedom to prosper, the gradual limitation of economic freedom suggests an even worse danger; that is, the end of political freedom. “Your country is in peril,” said New Zealand author and researcher Trevor Loudon in a recent speech for America’s Survival. “Small groups of Marxists [now] run your country,” he explained. For the labor unions were taken over by hard-core Marxists in the 1990s, and this affected the trajectory of one of the two major parties which in turn moves the country ever closer to Marxism. Day by day, moment by moment, the checks and balances of the Founding Fathers are breaking down. A highly centralized socialist system is evolving out of the old free market system; and national bankruptcy appears to be an integral part of their plan.

“Marxism is a religion,” wrote the economist Joseph Schumpeter in his Capitalism, Socialism and Democracy. “To the believer it presents, first, a system of ultimate ends that embody the meaning of life and are absolute standards by which to judge events and actions; and, secondly, a guide to those ends which implies a plan of salvation and the indication of the evil from which mankind … is to be saved.” For the Marxist that evil is economic freedom; the freedom to buy and sell, to chart your own course in the economy. The evil-doer in the Marxist ideology is the rich man who is not regarded as the benefactor of civilization but as a malefactor of great wealth who must be suppressed.

The great political battles of our time may be seen as a contest between socialism and capitalism, with capitalism unable to fight consistently or rigorously on its own behalf. “Opposition in principle to Socialism there is none,” wrote Mises over 80 years ago. And so it would seem today as well. For the regime of regulation and economic control seems to amass new laws and taxes in each decade, according to the prevailing economic or environmental emergency. To be sure, whatever anti-capitalist measure is revoked under a Reagan or a Thatcher, three measures come in its place. “The word ‘Capitalism’ expresses, for our age, the sum of all evil,” wrote Mises. “Even the opponents of Socialism are dominated by socialist ideas.”

In September The New Criterion published Kenneth Minogue’s “The Self-interested Society,” which explored certain aspects of this self-same quandary. Remaking the world in the image of a socialist utopia is expensive, Minogue suggested. “And politically, there is no doubt which way expenditure … will go. It rises relentlessly upwards. The classes of the vulnerable multiply, and the demands of the public purse rise in order to deal with the problems that earlier generations were accommodated within the exigencies of family life.” Minogue adds that most of the rich Western states are being led “into a condition of chronic bankruptcy.”

The solution should be obvious, and is offered by both Mises and Minogue. Human society is imperfect, and it would be foolish to break the bank in an attempt to square the circle; for socialism, as a religion, wants to square the proverbial circle. No amount of state expenditure is going to correct society’s imperfections, or make society into a utopia. It can only make the government so large, and people so dependent upon it, that freedom itself is imperiled. All that runaway expenditure can do, in reality, is bankrupt us until we found ourselves enslaved by political dictatorship. In reckoning the body count attributable to socialism, and the prospect of universal bankruptcy, Minogue concluded, “The unavoidable conclusion seems to me to be that letting economies rip [i.e., run free], however much we may disapprove of the consequences, is much the better option.”

Capitalism can only be saved, and will only continue to exist, if our civilization sets aside the notion of progress as the elimination of all the world’s ills. As human beings we must recognize the absurdity of such perfectionism. “It seems to me,” wrote Minogue, “that our preoccupation with the defects of our civilization is a standing temptation, and a dangerous one, to have recourse to civil authority in order to deal with what we may be persuaded to understand as social imperfections.” Let the generosity of the individual take the place of a welfare state which aims a gun at the head of every taxpayer on behalf of what Minogue calls “classes of vulnerability or hardship.” And even more importantly, we must not, as Minogue warns, “begin to conceive of modern societies as associations of incompetents and cripples.” It is not merely a question of what we can afford. It is also a question of what we would ultimately become under such a system.

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