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Understanding Capitalism and Capitalists

The document discusses definitions of capitalism from philosophical and economic perspectives. 1) Philosopher Ayn Rand's definition of capitalism is a social system based on individual rights, private property ownership, and banning the initiation of physical force. The only role of government is to protect individual rights and use force only in retaliation. 2) Capitalism is defined ethically as protecting individual sovereignty and rights to life. Politically it is based on individual rights and freedom from initiation of physical force. Legally it establishes a system of objective laws under the "rule of law" rather than regulation. 3) Economically, when applied to production and trade, capitalism results in a free market separated from the state, like the

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146 views2 pages

Understanding Capitalism and Capitalists

The document discusses definitions of capitalism from philosophical and economic perspectives. 1) Philosopher Ayn Rand's definition of capitalism is a social system based on individual rights, private property ownership, and banning the initiation of physical force. The only role of government is to protect individual rights and use force only in retaliation. 2) Capitalism is defined ethically as protecting individual sovereignty and rights to life. Politically it is based on individual rights and freedom from initiation of physical force. Legally it establishes a system of objective laws under the "rule of law" rather than regulation. 3) Economically, when applied to production and trade, capitalism results in a free market separated from the state, like the

Uploaded by

Ali A
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Ali Munib Nizami

What is capitalism?

CAPITALISM

The best definition of capitalism is given by philosopher Ayn Rand:

“Capitalism is a social system based on the recognition of individual rights, including property
rights, in which all property is privately owned’’.

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.”

Rand’s description highlights the key aspects of capitalism on several different levels.

Ethically, the moral base of capitalism is the principle that the individual has an inalienable right
to their life, i.e., as a sovereign being.

Politically, capitalism is a social system based on the principle of individual rights, i.e., freedom
(from the initiation of physical force). It is to banish the initiation of physical force (and its
corollary fraud) from all relationships that governments are instituted.

Objective control highlights the essential characteristic of capitalism’s legal system. Legally,
capitalism is a legal system of objectively defined laws based on individual rights, i.e., the rule
of law (legislation) as opposed to the “rule of man” (regulation). Under such a legal system one
is free to act so long as one does not violate the rights of others, i.e., the government is not a
regulator (dictator) but a referee.

Economically, when such freedom under a “rule of law” is applied to the sphere of production
and trade, its result is the free-market. Under capitalism, there is a separation of economics and
state, just like there is a separation of religion and state. A free-market is entirely dependent on
a specific ethical, political, and legal foundation; without that foundation, it is only free in
name.
The goal of this site is to elaborate on the nature of this foundation and then to answer the
errors behind the popular arguments against capitalism. When one does examine them one will
find that the source of the error is the influence of one’s philosophy.

What is a capitalist?

CAPITALISM

The words capitalism and capitalist are used in two different but related senses: one in a
compartmentalized sense within the specialized science of economics (that studies the nature
of production in a division of labor society), the second in a wider sense in the encompassing
science of politics (the branch of philosophy that examines the fundamental nature of social
systems).

Within the specialized domain of economics, a person who invests capital in a business concern
is recognized as a capitalist, regardless of whether he advocates capitalism politically or not,
e.g., Frederique Engels, Warren Buffet, and George Soros are economically capitalists.

More broadly, that is philosophically and politically, only an advocate of laissez-faire capitalism
is as a capitalist, e.g., philosopher-novelist Ayn Rand is politically a capitalist, Frederique Engels
who advocated communism is politically anti-capitalist.

Though economically Engels came from a wealthy background, politically he is recognized as a


socialist/communist because of his ideas.

Similarly, billionaires Warren Buffet, Ted Turner and George Soros — can
be economically compartmentalized as capitalists — but philosophically they are not capitalists
as they do not advocate capitalism on principle, but are advocates of “mixed economy” statism
(capitalism combined with anti-capitalist elements) to various degrees. Soros being more anti-
capitalist than Buffet.

Soros, like billionaire Ted Turner, is a “socialist at heart.”

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