What’s So Selfish About Capitalism?


It is a mischaracterization of the free-market society that is as old as capitalism itself. One recent recycle comes from self-designated “libertarian socialist” and “anarchist” Noam Chomsky: “It’s just, I’m out for myself, nobody else — and that’s the way it ought to be” (Power Systems, p. 157).

Now it is absolutely true that laissez-faire capitalism allows someone to be “selfish” (in the most shallow sense), basically because such capitalism allows an individual to be any number of things. A man can spend every penny he has on trinkets (from which expanding circles of merchants and others will actually benefit), or he can donate all he owns to charity — or select among all the types of intermediate options. Freedom of property gives people these choices, in the same way as freedom of religion provides them with a smorgasbord of theisms, atheisms, and agnosticisms. The separation of state and religion doesn’t mean that everyone will embrace, say, Seventh-day Adventism, nor does it follow that the separation of state and economics means that everyone will embrace “selfishness” — or any one exclusive behavior.

The fear that freedom of charity — ending redistributive taxation, thereby completing the separation of state and charity — will mean not a diversification, but the utter death of charity, proceeds from the premise that the one thing everyone will do under capitalism is nothing — for or with anyone else. But this contention that individual liberty entails an abject disregard for others corresponds to no social reality. Does freedom of assembly mean that people will never assemble — in any way? Does freedom of trade mean that everybody will in fact stop trading? Does freedom of speech and of the press — an unregulated market in ideas — mean not that we will have a rich and engaging culture, but that nobody will exchange any ideas about anything?

Laissez-faire capitalism allows someone to be “selfish” because such capitalism allows an individual to be any number of things.

Consider freedom of sexuality. Now it is also absolutely true that capitalism allows someone to indulge in what was formerly euphemized as “self-abuse.” Does that mean that without government control of sex — without a nationalization of the means of reproduction — individuals will do nothing but lock themselves away in their rooms? That there will be no dating, no courting, no marriages? No births, no propagation of the species — is that how “rugged individualism” will “atomize” society? Will all of capitalism’s “sham-liberty” (Engels) degenerate us into an anti-civilization of hermits, morons, and masturbators? Is that the fate from which only coercion — by a hereditary monarch, a Putsch oligarchy, or the Election Day majority-plurality — can save us?

Forebodings of societal necrosis notwithstanding, there is no conflict between liberty and community — the former is each tree, the latter the forest. By allowing each adult to act on his own choices, liberty empowers consenting adults to interact in various ways within a multiplicity of modes: religious-philosophical, professional-economic, sexual-romantic, cultural-artistic, fraternal-humanitarian, and many more. Hence the profound error of thinking that capitalism — voluntarily funded government limited to the defense of person and property — has any one “way it ought to be” concerning socioeconomic matters (such as Chomsky’s “I’m out for myself, nobody else” burlesque). Its only commandment is political: the prohibition of the initiation of force or fraud — by either state or criminal agents. We may therefore confidently retire verso Engels’ and recto Thomas Carlyle’s “cash nexus” caricature of the open society. Whatever the skirmish, the conflict of freedom vs. control is that of diversity vs. conformity — the multifaceted, multihued consent nexus of capitalism vs. the flat, sanguineous coercion nexus of statisms left and right. When some lobbyist hands us the line “If government doesn’t do it, it doesn’t get done,” what he’s really telling us is: it doesn’t get done his way only.

Many of the giants of classical liberalism recognized the affinity of compulsion and conformity. Jefferson wondered: why subject opinion to coercion? His answer: “To produce uniformity.” And Ludwig von Mises, in a survey of paradoxical charges against the free market, observed: “The atheists make capitalism responsible for the survival of Christianity. But the papal encyclicals blame capitalism for the spread of irreligion. . . .” Irreligionists identify capitalism with religion because capitalism (unlike leftism) doesn’t suppress religion, while religionists identify capitalism with irreligion because capitalism (unlike rightism) doesn’t suppress that. Let us put aside the question of whether such behavior — the refusal to extend to others the protection of law that one demands for oneself — constitutes “selfishness” in the most destructive sense. What this example illustrates perfectly is the statist projection inherent in linking laissez faire, which neither suppresses nor subsidizes, to any homogenized culture. A “capitalist society” is no more synonymous with “selfish materialism” than with “selfless spirituality.” The only thing everyone in a libertarian political order does — with no one’s mind, body, and property but his own — is act, not for his exclusive “gratification” against any consideration for others, but on his own judgment protected against any violence from others.

With regard to the nature of civil liberties, the freedom to withhold one’s wealth from the state — apparently the gravamen of the charge of capitalist “selfishness” — is wholly like any other human right. The state has no more claim to the individual’s private property than to his private body or his private mind. (Indeed, what a person does with his own property or body is what he does with his own mind — all coercion is “thought control.”) If we do not grant government the ability to more wisely or morally use a citizen’s mind or body, we do not grant it the ability to more wisely or morally use his property. Yet that is exactly what the accusation of “selfishness” wants to guilt us into conceding: that the state (essentially a handful of guys with guns) will manage each and every person’s money “better” than these people (essentially the entirety of the population) will do themselves. Just who is manning this administration — mortals or gods?

Will all of capitalism’s “sham-liberty” degenerate us into an anti-civilization of hermits, morons, and masturbators?

The importance of private property to political dissent was memorably demonstrated by an unexpected but significant source. In response to President George W. Bush’s launching of the Iraq War, the National War Tax Resistance Coordinating Committee issued a public statement entitled “An Appeal to Conscience: In Support of Those Refusing to Pay for War on Iraq,” which upheld a citizen’s right not to pay “all or a portion of one’s federal taxes as a form of conscientious objection.” Among the signatories were many who proudly wore the label “socialist,” including . . . Noam Chomsky. Now here were outright collectivists defending the right of every individual to keep his money from the taxmen, for no reason other than to reflect his private conscience — that is, his personal disagreement with government policy, even when the government was enthroned by the Election Day majority-plurality. (And certainly Bush 2000 won a much greater percentage of the popular vote than Chile’s Allende, whose “democratically elected” credential is repeated by the Left as calculatingly as Castro’s dictator status is not.) The “Appeal to Conscience” didn’t even contain a little pledge that each tax resister would spend his withheld wealth on good things (e.g., children’s charities) and not on bad ones (hookers and heroin).

Since war is a government undertaking, we must note the converse in America today: almost every government project is conceived as some kind of “war” — hence a War on Poverty and a War on Drugs no less than a War in Iraq and a War on Terror. If, as a matter of principle, a citizen may stop giving money to the state as a practical expression of his “conscientious objection” to any particular war — if he can in that manner legitimately protest national security and other policies — we thereby recognize that private property is essential to freedom of conscience. What then is left of any variant of wealth seizure? What are we left with but capitalism in its purest form?

Yet that is the very politics denounced by the Left, including even its antiwar tax resisters, as “selfishness.” One cannot help recalling the scene in A Man for All Seasons where Sir Thomas More, accused of high treason, explains that his believing a “loyal subject is more bounden to be loyal to his conscience than to any other thing” is a matter of necessity “for respect of my own soul.” Thomas Cromwell, the state’s advocate and More’s antipode in this “debate” — a rigged trial in which the defendant’s life is in peril — tries to undermine this statement of conviction in a common manner, sneering, “Your own self, you mean!” More doesn’t deny it: “Yes, a man’s soul is his self!”

Possibly the “egalitarian” supporters of the “Appeal to Conscience” believed that its broad principles should apply to only specific people — namely, themselves and those sufficiently parallel. That returns to the fore the refusal to extend to others the protection of law that one demands for oneself. Said refusal is a good working definition of what many actually champion as the corrective to capitalist “selfishness”: the social-democratic “welfare” state — the mixed economy:

To be capitalist or to be socialist?— that is the question. Precisely what is the mix of the mixed economy? When is it capitalist and when is it socialist? When does it protect property and when does it confiscate it? When does it leave people alone and when does it coerce them? When does it adhere to the ethics of individualism and when does it obey the code of collectivism? And just which is the metaphysical primary — the individual or the collective (e.g., the nation, the race, the class)? The fundamental truth about the mixed economy is that mixed practices imply mixed principles, which in turn imply mixed premises — i.e., an incoherent grasp of reality. With socialism, the chaos was economic; with “social democracy,” it’s epistemological. Ultimately, the latter can no more generate rational policies than the former could generate rational prices. The mixed economy doesn’t present us with a mosaic portrait of the just society, but with a jigsaw of pieces taken from different puzzles.

Unable to provide any philosophically consistent answers, the mixed economy demonstrates that the question of which rights will be protected degenerates into a struggle over whose rights will be protected. One example that virtually suggests itself: while a myriad of voices clamor for censorship, who ever says, “There have to be some limits on free speech, and we should start with mine”? Concerning “economic” issues, do we ever hear, “Y’know what? Give the competition the subsidies. Me, I’ll bear the rigors of the market”? As for intellectual and moral integrity: do we see the National Organization for Women (NOW) and fellow “progressives” bring to other issues the laissez faire they demand for the abortion industry — a heresy that elicited a charge of “possessive individualism” from Christopher Hitchens when in office as socialist inquisitor — except, that is, when these “progressives” demand tax dollars for abortions (and deny reproductive rights, the putative sine qua non for gender equality, to males)? Do we see the National Rifle Association (NRA) and fellow “conservatives” bring to other issues the laissez faire they demand for the gun culture — a deviation that roused Robert Bork, majoritarian mongoose to any perceived libertarian snake, to attack the NRA via a comparison with the ACLU — except, that is, when these “conservatives” demand that private property owners be prohibited by law from refusing entry to persons carrying firearms?

Whatever the skirmish, the conflict of freedom vs. control is that of diversity vs. conformity.

No matter what combination of contradictory positions any particular avatar of the mixed economy advocates on any given day, he is always a libertarian with his own liberty and a capitalist with his own capital, but an authoritarian with the freedoms of others and a socialist with their property. Such is the “idealism” that distinguishes modern liberalism and its special-interest lobbies from the “selfishness” of classical liberalism and its establishment of the same rights for oneself and one’s neighbors.

With social diversity now multiplying the types of special interests in many social democracies, the resulting political conflicts cannot be dismissed, let alone defused — least of all by the bromide that “we all accept that our tax dollars go to things we disapprove of.” No one in fact accepts that. Even though taxation exists to separate people from control of their money, selective tax protests span the spectrum of otherwise pro-taxation pressure groups. We’ve seen collectivists — reputed foes of all private property — endorse antiwar protesters who demand as a matter of individual conscience their right not to pay taxes. Years ago in The Nation, an ad told readers that “your tax dollars” funded what it alleged was Israel’s mistreatment of the Palestinians. Public school supporters, who never voice concern over how many “Americans really want to give tax dollars” to that monopoly, suddenly claimed great concern with what “Americans really want” at the prospect of those dollars going to “school vouchers.” And among traditionalists, tax protests involve everything from abortion to art (if it offends them) to foreign aid (for the countries they don’t like) to free condoms and free needles. Under a system that denigrates the concept of equal rights for all, everyone wants to be exempt from paying taxes for the things he disapproves of, but no one wants — any guesses why? — his neighbors to be exempt from paying taxes for the things they disapprove of.

There’s not a mote of doubt as to what — with the double standard as its only standard — exposes itself as the inherent politics of “selfishness”: the hypocrisy of social democracy. All the warring camps of social democrats brazenly acknowledge that hypocrisy — in the other camps. A snowy day stuck indoors will pass much more tolerably with a back-and-forth Googling of “liberal hypocrisy” and “conservative hypocrisy.” (Each camp also detects tyranny — “fascism” — in only the others; compare Jonah Goldberg vs. Naomi Wolf.)

And what of social democracy’s central claim to “social justice”: its redistribution of wealth from the “most greedy” (richest? most materialistic? least philanthropic?) to the “most needy”? Consider one form of redistribution that no North American or European “welfare” state allows — or ever would allow. Let us stipulate that I have no problems with (a) the government’s taking a portion of my money for the purpose of tempering my “greed,” (b) the idea of those tax dollars going to the “most needy,” and (c) the percentage the state takes. But there is one thing: I don’t consider the current recipients to be anywhere near the “most needy.” My definition does not include my fellow Americans, who even at their poorest are richer than most people on the planet. To get right to it: I believe that the “most needy” — the “least of these” — are undeniably the starving children of the Third World, and I insist that my tax dollars all be sent to them.

The mixed economy demonstrates that the question of which rights will be protected degenerates into a struggle over whose rights will be protected.

Now why is that a problem? I am not declaring a right to withhold my taxes from the government, with no assurance about what I will do with the money — unlike the antiwar leftists who signed the “Appeal to Conscience.” Nor am I trying to control what others’ taxes pay for. All I’m asking is that my money go to those who my independent judgment and individual conscience tell me are the “most needy.” Why should I pay for full medical coverage for all Americans, when the Third World children don’t have any food? Why should I pay for textbooks for American children, when the Third World children don’t have any food? So, why can’tmy tax dollars go to them? Because the Election Day majority-plurality decides that “charity begins at home” (i.e., nationalism trumps humanitarianism)? If the neediest-recipient principle justifies my money’s transfer to my fellow Americans, why doesn’t it justify the money’s transfer from these Americans to the starving Third World children? Isn’t the principle violated by the dictionary “selfishness” of voting other people’s money into one’s own coffer (“tax booty for me, tax burden for thee”)?

The redistribution of wealth in a “welfare” state is not directed by a neediest-recipient or any other principle. It is purely a matter of power. With its rejection of consistent property rights, social democracy forces all people to throw all money onto the table (which some resist more successfully than others) and then allows them to take what they can (with some better able to take than others). That’s right: The money goes from those who are politically unable to hold on to their wealth, to those who are politically capable of grabbing on to that wealth. The former are no more guaranteed to be the “most greedy” than the latter are to be the “most needy.” It would be criminal not to cite Lord Bauer’s denuding of foreign aid: the “transferring [of] money from poor people in rich countries to rich people in poor countries.” And it would be downright felonious to omit business subsidies. Any redistribution of wealth operates in only one way: from each according to his ability to contract via civil society, to each according to his ability to coerce via the state — a feature applicable (by degree) to both socialist dictatorship and social democracy.

The confusion of limited government with “selfishness” is reflected in the socialistic thesis that such government comprises nothing but the “class self-interest” of the business (“capitalist”) class. This thesis implodes almost immediately when we begin to ask precisely what concrete policies manifest that specific “class self-interest.” If respect for everyone’s property rights actually favors “capitalists,” why do corporations seek subsidies and “eminent domain” confiscations? If unregulated commerce leads to monopolization by these “capitalists,” why do real-world businessmen look to state regulation to gift them with monopoly entitlements? And if free trade gives an advantage to this class, why do each country’s business — and union — leaders lobby for protectionism?

The classical liberals formulated their principles of private property, laissez faire, and free trade — rejected by “socialists of all parties” and big business alike — not against the yearning of the have-nots for a better life, but in opposition to policies that favored the few over the common good, that is, the routine of “merchants and industrialists . . . demanding and receiving special privileges for themselves” (in the words of Robert B. Downs). Free-market economics (The Wealth of Nations) and American nationhood both arose as part of the revolt against such mercantilism — corporatism, in today’s parlance. The American “welfare” state, in contrast, began as a neomercantilist reaction against that revolt. “The essential purpose and goal of any measure of importance in the Progressive Era was not merely endorsed by key representatives of businesses involved,” observed Gabriel Kolko; “rather such bills were first proposed by them.” Big business has never stopped being a major driver of big government. Would President Bush’s 2003 prescription drug bill (the “largest expansion of entitlements in nearly forty years,” according to Jonathan Chait) have gone anywhere without its hundreds of billions in industry subsidies? Would Obamacare even exist without the “advice” and approval of the health insurance cartel?

If respect for everyone’s property rights actually favors “capitalists,” why do corporations seek subsidies and “eminent domain” confiscations?

Corporate privilege is a raison d’être — not a corruption — of the “welfare” state (aka “corporate liberalism”). Charity is not the purpose of the “welfare” state, much less its innovation. Concern for “the poor and stranger” long preceded its birth and will long survive its death. Like family life or the division of labor, charity is (to quote Paine’s view of society vs. state) “part of that order which reigns among mankind [that] is not the effect of government. It had its origin in the principles of society and the natural constitution of man.” What had its origin in government is the swarm of anticompetitive measures benefitting “connected” entities — the fixed economy of the mixed economy. Without tariffs, for instance, how many people would always prefer to buy domestic goods? And how many would ever write out checks to a multinational conglomerate for nothing in return? Those are the “market failures” that the opponents of a free market fear.

Any state initiation of force exists not for a noble end (which, as Jefferson said of truth, requires no such coercion), but for a sordid one. Regarding military conscription, Ayn Rand pointed out that a “free (or even semi-free) country has never lacked volunteers in the face of foreign aggression.” However: “Not many men would volunteer for such wars as Korea or Vietnam.” Likewise, people will allocate money for the education of their children, sound retirement funds, the less fortunate, and especially the services of a limited government. What they won’t do is give it to “teachers” who can’t teach, Ponzi schemes, Boeing, or Chrysler — or the Taliban, which just a few months before 9/11 received from Uncle Sam a total of $43 million for its “help” in the victory-elusive War on Drugs (a sum that too obviously pales next to the multiple billions handed over to Vice President Cheney’s compadres for the purpose of building infrastructure — in Iraq). Only pursuits of folly and injustice seek the means of force or fraud.

Portraying laissez-faire capitalism as the tailored benefactor of big business is transparently a projection on the part of the mixed economy’s corporate liberals. The consistent socialists, on the other hand, care no more whether commerce is privileged or left alone by government than whether religion is privileged or left alone by government. They want the abolition of commerce, of religion, of a free market in anything, of any independent institution of civil society: the replication of totalitarian theory and history.

Will only the unfettered state stop the virulence of “selfishness”? Ideally yes, asserted Plato, for whom the “highest form of the state” was one “in whichthe private and individual is altogether banished from life, and things which are by nature private, such as eyes and ears and hands, have become common, and in some way see and hear and act in common, and all men express praise and blame and feel joy and sorrow on the same occasions. . . .” Reductio ad fundamentum: There will be no more “selfishness” when there are no more selves.

Capitalism is being condemned for not assenting to the proposition that money grows on trees.

The unfettered market boasts no ability to effect a change in “human nature” — in social reality. There will always be situations in which people compete to get or to keep one position, one prize. But while the market can do nothing about this conflicting “selfishness” (and will do nothing about different parties’ demands for a guarantee of monopoly), it commands the common self-interest that people have in all competition being governed by an equitable rule: a ban on the use of force or fraud by any rival, the only possible such rule. The analogue of the market is not the jungle, but the stadium — more broadly, a network of stadiums and other venues.

Capitalism’s multiplicity of open competitions enables each individual to find the field where he can succeed. The free market’s profit-and-loss dynamic (to quote Adam Smith) “encourages every man to apply himself to [the] particular occupation” most sought after by others. These interactions synthesize the most prosperous social order as defined by the participants themselves — all of them, as opposed to any one party’s wish for the “way it ought to be.” It is an ideal that has been realized to the degree thata market mechanism has been implemented. In contrast, socialism’s “equality” has meant nothing but poverty for all. And in a jarring echo of the Great Depression, the mixed economy’s regulatory sector in recent years orchestrated a general downturn in the US (where the crisis was Orwellianly blamed on “deregulation”) and in Europe (the “PIIGS”). State intervention in production (i.e., one party’s wish for the “way it ought to be”), once heralded as the alternative to the market’s alleged class conflicts, evidently produces only the “common ruin of the contending classes” — to redirect a phrase from The Communist Manifesto. When the prescribed cure for “selfishness” actually afflicts the common good, we must reexamine the diagnosis of the condition.

Preponderant among the essential criticisms of limited government has been the charge that it fails to recognize as natural rights such things as food, clothing, and shelter, to say nothing of education (“from pre-K to Ph.D.”), advanced medicine, and whatever else might be tacked on. The sober reply: these items are not natural rights because they are not natural produce. It costs a man nothing not to coerce his fellow citizens, thereby respecting their rights to worship, speak, etc. But how can he provide everyone’s “right” to all those scarce materials and services? And why should he, when he himself is promised a “right” to those things whether he does any work or not? Realistically speaking, capitalism is being condemned for not assenting to the proposition that money grows on trees. And the condemners are quite serious in that belief: “The world has enough for everyone’s need, but not enough for everyone’s greed.” Wealth simply exists, and only capitalist “selfishness” prevents its equal distribution to every soul on earth.

Ultimately, the free-market society is guilty only of affirming each individual’s right to control his own mind, body, and property, a conviction that calls for a single sentence: if that is “selfishness,” let us make the most of it.

Recommended Reading

  • Yaron Brook and Don Watkins, Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, 2012.
  • Nick Gillespie and Matt Welch, The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong with America, 2012.
  • David Kelley, Unrugged Individualism: The Selfish Basis of Benevolence, 2003.
  • Robert P. Murphy, The Politically Incorrect Guide to Capitalism, 2007.
  • Andrew P. Napolitano, It Is Dangerous to Be Right When the Government Is Wrong: The Case for Personal Freedom, 2011.
  • John Stossel, No, They Can’t: Why Government Fails — But Individuals Succeed, 2012.

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Ayn R. Key

It is an interesting idea, the idea that people need to be forced to be generous to each other. The idea that without force people would never deign to help each other.

It is an idea common among progressives, and this contemptible idea says far more about them then it does about the ideas they oppose. This premise, that people would not help unless forced to, is actually quite monstrous and says far more about progressives than it does libertarians.

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