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Everything You Love You Owe to Capitalism
by Llewellyn H. Rockwell, Jr.
I'm sure that you have had this experience before, or something similar to it. You are sitting at lunch in a nice restaurant or perhaps a hotel. Waiters are coming and going. The food is fantastic. The conversation about all things is going well. You talk about the weather, music, movies, health, trivialities in the news, kids, and so on. But then the topic turns to economics, and things change.
You are not the aggressive type so you don't proclaim the merits of the free market immediately. You wait and let the others talk. Their biases against business appear right away in the repetition of the media's latest calumny against the market, such as that gas station owners are causing inflation by jacking up prices to pad their pockets at our expense, or that Wal-Mart is, of course, the worst possible thing that can ever happen to a community.
You begin to offer a corrective, pointing out the other side. Then the truth emerges in the form of a naïve if definitive announcement from one person: "Well, I suppose I'm really a socialist at heart." Others nod in agreement.
~snip~
All of history has been defined by the struggle for food. And yet that struggle has been abolished, not just for the rich but for everyone living in developed economies. The ancients, peering into this scene, might have assumed it to be Elysium. Medieval man conjured up such scenes only in visions of Utopia. Even in the late 19th century, the most gilded palace of the richest industrialist required a vast staff and immense trouble to come anywhere near approximating it.
We owe this scene to capitalism. To put it differently, we owe this scene to centuries of capital accumulation at the hands of free people who have put capital to work on behalf of economic innovations, at once competing with others for profit and cooperating with millions upon millions of people in an ever-expanding global network of the division of labor. The savings, investments, risks, and work of hundreds of years and uncountable numbers of free people have gone into making this scene possible, thanks to the ever-remarkable capacity for a society developing under conditions of liberty to achieve the highest aspirations of the society's members.
And yet, sitting on the other side of the table are well-educated people who imagine that the way to end the world's woes is through socialism. Now, people's definitions of socialism differ, and these persons would probably be quick to say that they do not mean the Soviet Union or anything like that. That was socialism in name only, I would be told. And yet, if socialism does mean anything at all today, it imagines that there can be some social improvement resulting from the political movement to take capital out of private hands and put it into the hands of the state. Other tendencies of socialism include the desire to see labor organized along class lines and given some sort of coercive power over how their employers' property is used. It might be as simple as the desire to put a cap on the salaries of CEOs, or it could be as extreme as the desire to abolish all private property, money, and even marriage.
~snip~
In short, the wish for socialism is a wish for unparalleled human evil. If we really understood this, no one would express casual support for it in polite company. It would be like saying, you know, there is really something to be said for malaria and typhoid and dropping atom bombs on millions of innocents.
Do the people sitting across the table really wish for this? Certainly not. So what has gone wrong here? Why can these people not see what is obvious? Why can't people sitting amidst market-created plenty, enjoying all the fruits of capitalism every minute of life, see the merit of the market but rather wish for something that is a proven disaster?
What we have here is a failure of understanding. That is to say, a failure to connect causes with effects. This is a wholly abstract idea. Knowledge of cause and effect does not come to us by merely looking around a room, living in a certain kind of society, or observing statistics. You can study roomfuls of data, read a thousand treatises on history, or plot international GDP figures on a graph for a living, and yet the truth about cause and effect can still be evasive. You still might miss the point that it is capitalism that gives rise to prosperity and freedom. You might still be tempted by the notion of socialism as savior.
Let me take you back to the years 1989 and 1990. These were the years that most of us remember as the time when socialism collapsed in Eastern Europe and Russia. Events of that time flew in the face of all predictions on the Right that these were permanent regimes that would never change unless they were bombed back to the Stone Age. On the Left, it was widely believed, even in those times, that these societies were actually doing quite well and would eventually pass the United States and Western Europe in prosperity, and, by some measures, that they were already better off than us.
And yet it collapsed. Even the Berlin Wall, that symbol of oppression and slavery, was torn down by the people themselves. It was not only glorious to see socialism collapse. It was thrilling, from a libertarian point of view, to see how states themselves can dissolve. They may have all the guns and all the power, and the people have none of those, and yet, when the people themselves decide that they will no longer be governed, the state has few options left. It eventually collapses amid a society-wide refusal to believe its lies any longer.
When these closed societies suddenly became open, what did we see? We saw lands that time forgot. The technology was backwards and broken. The food was scarce and disgusting. The medical care was abysmal. The people were unhealthy. Property was polluted.
It was also striking to see what had happened to the culture under socialism. Many generations had been raised under a system built on power and lies, and so the cultural infrastructure that we take for granted was not secure. Such notions as trust, promise, truth, honesty, and planning for the future — all pillars of commercial culture — had become distorted and confused by the ubiquity and persistence of the statist curse.
~snip~
For a person who has read in economics, and absorbed its essential lessons, the world around us becomes vivid and clear, and certain moral imperatives strike us. We know now that commerce deserves defense. We see entrepreneurs as great heroes. We sympathize with the plight of producers. We see unions not as defenders of rights but as privileged cartels that exclude people who need work. We see regulations not as consumer protection but rather as cost-raising rackets lobbied for by some producers to hurt other producers. We see antitrust not as a safeguard against corporate excess but as a bludgeon used by big players against smarter competitors.
In short, economics helps us see the world as it is. And its contribution lies not in the direction of the assembly of ever more facts, but in helping those facts fit a coherent theory of the world. And here we see the essence of our job at the Mises Institute. It is to educate and instill a systematic method for understanding the world as it is. Our battleground is not the courts, nor the election polls, nor the presidency, nor the legislature, and certainly not the wicked arena of lobbying and political payoffs. Our battleground concerns a domain of existence that is more powerful in the long run. It concerns the ideas that individuals hold about how the world works.
As we get older and see ever more young generations coming up behind us, we are often struck by the great truth that knowledge in this world is not cumulative over time. What one generation has learned and absorbed is not somehow passed on to the next one through genetics or osmosis. Each generation must be taught anew. Economic theory, I'm sorry to report, is not written on our hearts. It was a long time in the process of being discovered. But now that we know, it must be passed on — and in this way, it is like the ability to read, or to understand great literature. It is the obligation of our generation to teach the next generation.
~snip~
And we are not merely talking here of knowledge for knowledge's sake. What is at stake is our prosperity. It is our standard of living. It is the well-being of our children and all of society. It is freedom and the flourishing of civilization that stand in the balance. Whether we grow and thrive and create and flourish, or wither and die and lose all that we have inherited, ultimately depends on these abstract ideas we hold concerning cause and effect in society. These ideas do not usually come to us by pure observation. They must be taught and explained.
But who or what will teach and explain them? This is the crucial role of the Mises Institute. And not only to teach but to expand the base of knowledge, to make new discoveries, to broaden the reach of the literature, and to add ever more abundantly to the corpus of freedom. We need to expand its proponents in all walks of life, not only in academia but in all sectors of society. This is an ambitious agenda, one that Mises himself charged his descendants with.
Everything You Love You Owe to Capitalism - Llewellyn H. Rockwell, Jr. - Mises Institute
The whole article is a good read, especially for those confused about Capitalism, Socialism, and Economics.
by Llewellyn H. Rockwell, Jr.
I'm sure that you have had this experience before, or something similar to it. You are sitting at lunch in a nice restaurant or perhaps a hotel. Waiters are coming and going. The food is fantastic. The conversation about all things is going well. You talk about the weather, music, movies, health, trivialities in the news, kids, and so on. But then the topic turns to economics, and things change.
You are not the aggressive type so you don't proclaim the merits of the free market immediately. You wait and let the others talk. Their biases against business appear right away in the repetition of the media's latest calumny against the market, such as that gas station owners are causing inflation by jacking up prices to pad their pockets at our expense, or that Wal-Mart is, of course, the worst possible thing that can ever happen to a community.
You begin to offer a corrective, pointing out the other side. Then the truth emerges in the form of a naïve if definitive announcement from one person: "Well, I suppose I'm really a socialist at heart." Others nod in agreement.
~snip~
All of history has been defined by the struggle for food. And yet that struggle has been abolished, not just for the rich but for everyone living in developed economies. The ancients, peering into this scene, might have assumed it to be Elysium. Medieval man conjured up such scenes only in visions of Utopia. Even in the late 19th century, the most gilded palace of the richest industrialist required a vast staff and immense trouble to come anywhere near approximating it.
We owe this scene to capitalism. To put it differently, we owe this scene to centuries of capital accumulation at the hands of free people who have put capital to work on behalf of economic innovations, at once competing with others for profit and cooperating with millions upon millions of people in an ever-expanding global network of the division of labor. The savings, investments, risks, and work of hundreds of years and uncountable numbers of free people have gone into making this scene possible, thanks to the ever-remarkable capacity for a society developing under conditions of liberty to achieve the highest aspirations of the society's members.
And yet, sitting on the other side of the table are well-educated people who imagine that the way to end the world's woes is through socialism. Now, people's definitions of socialism differ, and these persons would probably be quick to say that they do not mean the Soviet Union or anything like that. That was socialism in name only, I would be told. And yet, if socialism does mean anything at all today, it imagines that there can be some social improvement resulting from the political movement to take capital out of private hands and put it into the hands of the state. Other tendencies of socialism include the desire to see labor organized along class lines and given some sort of coercive power over how their employers' property is used. It might be as simple as the desire to put a cap on the salaries of CEOs, or it could be as extreme as the desire to abolish all private property, money, and even marriage.
~snip~
In short, the wish for socialism is a wish for unparalleled human evil. If we really understood this, no one would express casual support for it in polite company. It would be like saying, you know, there is really something to be said for malaria and typhoid and dropping atom bombs on millions of innocents.
Do the people sitting across the table really wish for this? Certainly not. So what has gone wrong here? Why can these people not see what is obvious? Why can't people sitting amidst market-created plenty, enjoying all the fruits of capitalism every minute of life, see the merit of the market but rather wish for something that is a proven disaster?
What we have here is a failure of understanding. That is to say, a failure to connect causes with effects. This is a wholly abstract idea. Knowledge of cause and effect does not come to us by merely looking around a room, living in a certain kind of society, or observing statistics. You can study roomfuls of data, read a thousand treatises on history, or plot international GDP figures on a graph for a living, and yet the truth about cause and effect can still be evasive. You still might miss the point that it is capitalism that gives rise to prosperity and freedom. You might still be tempted by the notion of socialism as savior.
Let me take you back to the years 1989 and 1990. These were the years that most of us remember as the time when socialism collapsed in Eastern Europe and Russia. Events of that time flew in the face of all predictions on the Right that these were permanent regimes that would never change unless they were bombed back to the Stone Age. On the Left, it was widely believed, even in those times, that these societies were actually doing quite well and would eventually pass the United States and Western Europe in prosperity, and, by some measures, that they were already better off than us.
And yet it collapsed. Even the Berlin Wall, that symbol of oppression and slavery, was torn down by the people themselves. It was not only glorious to see socialism collapse. It was thrilling, from a libertarian point of view, to see how states themselves can dissolve. They may have all the guns and all the power, and the people have none of those, and yet, when the people themselves decide that they will no longer be governed, the state has few options left. It eventually collapses amid a society-wide refusal to believe its lies any longer.
When these closed societies suddenly became open, what did we see? We saw lands that time forgot. The technology was backwards and broken. The food was scarce and disgusting. The medical care was abysmal. The people were unhealthy. Property was polluted.
It was also striking to see what had happened to the culture under socialism. Many generations had been raised under a system built on power and lies, and so the cultural infrastructure that we take for granted was not secure. Such notions as trust, promise, truth, honesty, and planning for the future — all pillars of commercial culture — had become distorted and confused by the ubiquity and persistence of the statist curse.
~snip~
For a person who has read in economics, and absorbed its essential lessons, the world around us becomes vivid and clear, and certain moral imperatives strike us. We know now that commerce deserves defense. We see entrepreneurs as great heroes. We sympathize with the plight of producers. We see unions not as defenders of rights but as privileged cartels that exclude people who need work. We see regulations not as consumer protection but rather as cost-raising rackets lobbied for by some producers to hurt other producers. We see antitrust not as a safeguard against corporate excess but as a bludgeon used by big players against smarter competitors.
In short, economics helps us see the world as it is. And its contribution lies not in the direction of the assembly of ever more facts, but in helping those facts fit a coherent theory of the world. And here we see the essence of our job at the Mises Institute. It is to educate and instill a systematic method for understanding the world as it is. Our battleground is not the courts, nor the election polls, nor the presidency, nor the legislature, and certainly not the wicked arena of lobbying and political payoffs. Our battleground concerns a domain of existence that is more powerful in the long run. It concerns the ideas that individuals hold about how the world works.
As we get older and see ever more young generations coming up behind us, we are often struck by the great truth that knowledge in this world is not cumulative over time. What one generation has learned and absorbed is not somehow passed on to the next one through genetics or osmosis. Each generation must be taught anew. Economic theory, I'm sorry to report, is not written on our hearts. It was a long time in the process of being discovered. But now that we know, it must be passed on — and in this way, it is like the ability to read, or to understand great literature. It is the obligation of our generation to teach the next generation.
~snip~
And we are not merely talking here of knowledge for knowledge's sake. What is at stake is our prosperity. It is our standard of living. It is the well-being of our children and all of society. It is freedom and the flourishing of civilization that stand in the balance. Whether we grow and thrive and create and flourish, or wither and die and lose all that we have inherited, ultimately depends on these abstract ideas we hold concerning cause and effect in society. These ideas do not usually come to us by pure observation. They must be taught and explained.
But who or what will teach and explain them? This is the crucial role of the Mises Institute. And not only to teach but to expand the base of knowledge, to make new discoveries, to broaden the reach of the literature, and to add ever more abundantly to the corpus of freedom. We need to expand its proponents in all walks of life, not only in academia but in all sectors of society. This is an ambitious agenda, one that Mises himself charged his descendants with.
Everything You Love You Owe to Capitalism - Llewellyn H. Rockwell, Jr. - Mises Institute
The whole article is a good read, especially for those confused about Capitalism, Socialism, and Economics.
