Why capitalism can be a virtue

Born into a socialist family, lived in a socialist country, taught about the evils of capitalism. That pretty much sums up my ideological influences Now that I am finally smart enough to think i find myself crossing swords with myself and all that was ever said to me. On hindsight in fact, socialism seems to be remarkably naive. Almost like living out utopia and just refusing to look at how dreadfully twisted the outcomes become.

Ed Ring and Sauvik Chakravarty have a smiple formula. I call it the flow-chart to wealth. There are people, people are unique. ow are people unique? Many ways actually- the one of economic relevance however is that people can create wealth. Look at currency for example. The system of currency is a remarkable revolution over the barter system, and its downright simple. One just trades in the most abundant good- like coconuts for eg. in a costal area. Currency is the first form of liberty because it allows you freedom of choice. With money you don’t have to buy only potatoes even if you feel like groundnuts for instance, anyone would accept money- not everyone who has groundnuts for example though would want get only tomotoes from you in exchange!

” Capitalism leads to wealth, wealth leads to investment, investment spawns innovation, and through glorious creative destruction, today’s innovations surpass and replace yesterday’s, creating more wealth…” Says Ed Ring, quite literally wha could possibly be more wonderful that this? Picture a world full of plenty- plenty of money, plenty of choice, plenty of opportunity and plenty of happiness to offer everyone. Yet, for reasons that never cut beyond fears of an exploitative regime in the future based on history– capitalism with its tools that could bring about the biggest positive change in history is opposed by hugely powerful lobbies of Socialists, Communists, Environmentalists, humanitarians and even those who have never believed in the power of politics.

Popular socialist arguments are really quite insolar. One of these I heard a lot of, when I was younger was something like this : ” Capitalism is differential, discriminatory and therefore evil”. Now there are several problems with this belief. One that it works from the assumption that equality is the first virtue and duty of mankind. I have written before about how atrocious an assumption this is. The first virtue and right is freedom. No-one forced into being treated equally or being forced to treat equally is happy or really free. At any rate no one is equal in economic terms and no one should be. As F. Hayek put it ” Capitalism allows for great inequality in incomes, but it is also profoundly egalitarian. Its institutions protect the equal rights of consumers and producers, deny privilege and authority to the powerful few, and distribute wealth based on each participant’s contribution to satisfying the needs of others. Everyone, therefore, should be better off in a capitalist society.” ….

More thoughts on capitalism next time….