Should Libertarians Oppose “Capitalism”?

The unfortunate thing about this article is that relies far too much on conjecture when talking of the modern left as a movement. Its characterisation as backward looking and inherently anti-market is belied by the writings of Korten, Klein and a whole slew of anarchist writers from 19th and 20th centuries. And what is the alternative to this. You could have Rothbardian populism, but that has a short lifeforce. Or you could take money from the plutocrats, which simply makes libertarianism out to be a corporatist policy that is supported by millionaires because it makes them richer. By rejecting capitalism, libertarians can make alliances with the left and elements of the alternative right, eventually creating a pan-anarchist movement. If we follow Caplan’s proposal, we remain in the position of seemingly supporting corporate policies and their exorbitant wealth. (by the blog author)

by Bryan Caplan

Yesterday my long-time friend Sheldon Richman spoke before the GMU Econ Society on”Capitalism versus the Free Market.” (The video was streamedhere, but it doesn’t seem to be archived anywhere; if you’ve got a link, please let us know).  His main thesis: Libertarians should say that they favor the “free market,” not “capitalism.”  Why?  Because for many people, “capitalism” simply refers to the status quo economic system outside of explicitly Marxist nations.  Sheldon elsewhere goes on to argue that libertarians should actually say that they oppose capitalism:

We are a group of libertarians who understand that historically the word “capitalism” has meant, not the free market, but crony capitalism — that is, collusion between business and State at the expense of consumers/workers. Thus we refuse to use the word “capitalism” to describe what we favor: individual liberty in all respects and free, competitive markets. We believe that what we have today IS capitalism — and we oppose it.

I’m not convinced.  If we were starting from scratch, I agree that it would be great to scrap both “capitalism” and “socialism.”  Etymologically, capitalism does sound like a system of rule by capitalists for capitalists – and socialism sounds like a system of rule by society for society.  Since neither etymological suggestion is true, I wish the terms had never been coined.

As Sheldon admits in his talk, however, changing words is like changing currencies.  If they’re already widely accepted, you need a really good reason to abandon them.  Awkward etymology notwithstanding, I think the concepts of capitalism and socialism are good enough to keep using.

Sheldon’s right that people often use capitalism and socialism as binary terms; if you’re not Cuba or North Korea, you’re “capitalist.”  But this problem is easy to correct: Just emphasize that there’s a continuum from pure laissez-faire capitalism to totalitarian socialism, and that most nominally “capitalist” countries are a lot less capitalist than they pretend.  Once you make this conceptual point, the Fraser and Heritage indices of economic freedom are great ways to continue the conversation.

When you “advocate capitalism,” don’t you risk alienating all of the people who hate the status quo but might come to love the free market?   It’s possible, but I doubt it.  Yes, opponents of the free market habitually associate it with “pro-business” economic policies.  But this is usually a deliberate rhetorical strategy on their part.  Almost all self-styled “anti-capitalists” hate free markets per se.  But it’s easier to incite outrage against visible injustices than against the invisible hand, and they take the path of least resistance.

Don’t believe me?  Try going to an anti-globalization rally.  Tell people you’re for free trade, but against government subsidies for exports.  Tell them you favor freedom to form unions – and the freedom to fire workers for joining unions.  See what happens.  I bet it won’t be pretty.

If Sheldon were merely saying that libertarians’ noun of choice should be “the free market,” rather than “capitalism,” he’d have a decent case.  But for libertarians to reject “capitalism” as an alternate noun is overly defensive – and to announce that we “oppose capitalism” is completely confusing.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s