Capitalism

Stossel: In Defense of Capitalism

People acting in their own self-interest created modern prosperity, says Ayn Rand Institute's Yaron Brook.

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Progressives claim capitalism is "immoral" because some people become rich while others stay poor. Yaron Brook, chairman of the Ayn Rand Institute, says the opposite is true.

"We have basically made about $2 a day for 100,000 years," Brook told John Stossel. "In other words…we could eat what we farmed and that was it."

"And then something amazing happened."

About 250 years ago, a few countries tried capitalism. For the first time, people were allowed to profit from private property.

"Two-hundred and fifty years ago we suddenly discovered the value of individual freedom," says Brook. "We suddenly discovered the value of leaving individuals free to think, to innovate, to produce without asking for permission, without getting the state to sign off."

As a result, humans "doubled our life expectancy," says Brook. "We have dramatically increased the quality of our life and we are wealthier than anybody could have imagined."

Brook, who's an objectivist, says that "doing for others is fine—but only if that's what you want."

"The key is that somebody else's need is not a moral claim against your life," he adds. "Your life is yours."

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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  1. It was earlier than 250 years ago. It dates to thousands of years earlier. Private property existed and its owners could collect a profit on its use. Markets existed and good were traded for a profit.

    What changed 250 years ago was something else. There were two main areas that changed. First was the explosion of international trade. The second was the enlightenment. And what sparked those changes dates to even earlier. We have had continual progress over the past ten thousand years. What changed 250 years ago was not even a critical mass of change. We’re on an exponential curve of growth and 250 years ago is just an arbitrary point on the curve to point to.

    One could just as easily point to the nailing of a thesis to a cathedral door. Or the signing of the Magna Carta. Or hundreds of other “turning points”.

    1. Private property existed, but few people were actually able to have any. That was another thing that changed over a ~200 year period ending about 250 years ago, was the idea that land could be private property, and the owner could farm or raise livestock without a charter or license from the sovereign. Also that markets could exist and people could buy and sell also without needing a license from the sovereign

  2. I am starting to think the term “capitalism” is counter productive because it implies that capitalism is some kind of centralized economic system on parr with socialism rather than what it is, which is freedom. What we are really talking about when we say “capitalism” is the freedom for people to make a living as they see fit and keep the fruits of their labor. It is isn’t a system. It is the rejection of there being a “system” and the respect of people’s natural rights. Socialism is the impostion of a system at the expense of people’s right to make a living as they see fit and to keep the fruits of their labor.

    1. Karl Marx coined the term, as I recall. That in itself is cause not to use it. But beyond that, the concepts of capital accumulation and production ownership are too abstract and limited. The word just doesn’t encompass what free markets and free trade are about.

      1. No it doesn’t. And the use of it makes the contrast between it and socialism and the reality that socialism represents nothing but the government restricting how you make a living and owning everything you earn doing so harder to explain and less obvious.

    2. “”I am starting to think the term “capitalism” is counter productive because it implies that capitalism is some kind of centralized economic system on parr with socialism rather than what it is””

      That’s a feature not a bug for those to want to criticize it.

    3. “Capitalism” =/= “Free Markets”

      China is Capitalist, but does not have free markets.

      1. Depending upon how you define the term, sure. And no market is totally free. It is a question of degrees of freedom.

        1. It’s all about property rights, people.

  3. What word hasn’t been corrupted? Freedom has been used to mean throwing out the colonial power and instituting a locally grown dictator. Liberty has been used to mean throwing out the factory owner and installing the workers as owners. Progressive means reactionary, and Liberal means “do what I say or I’ll get a guy with a gun to make you.” Maybe we should proudly wear the Capitalist label and define it as we think it to mean?

    1. And “liberty” now means building a giant wall around the United States and levying excessive tariffs on the goods that US citizens buy.

  4. “Two-hundred and fifty years ago we suddenly discovered the value of individual freedom,” says Brook. “We suddenly discovered the value of leaving individuals free to think, to innovate, to produce without asking for permission, without getting the state to sign off.”

    I’m really curious who this “we” that Brooks is talking about really is.

    Certainly not America. We were gearing up for our own revolutionary war in 1769, but we weren’t having any revelations about private property. In fact, after we won our independence, we went right back to what Britain had been doing, just with our own folks at the top. We continued to seize land from Indians, trade in slaves, levee tariffs and taxes, issue business licenses and so-on. Into the 1800s we would buy, win and seize property from other countries, and then parcel it out to Americans through beuracratic means, a far-cry from this utopia of “no rules, no limits, no paperwork” that Brooks is talking about.

    Maybe he’s talking about somewhere else in Europe? That seems doubtful given the mess that it was at the time. And he certainly doens’t mean Britain which was still riding high on Colonialism and seizing other people’s stuff as it’s own. India had just been traded from one colonial power to the other, and at no point was “private property” much of a concern.

    Japan is straight-out ’cause, well, Japan.

    China… maybe. They were still pretty closed off for another not-quite-hundred years, and my Chinese history prior to the black ships is pretty thin. So who knows, maybe China was having an ideological revolution that was decades away from being squashed flat by the British.

    So yeah. Who is this “we” Brooks is talking about?

    1. In fact, after we won our independence, we went right back to what Britain had been doing, just with our own folks at the top. We continued to seize land from Indians, trade in slaves, levee tariffs and taxes, issue business licenses and so-on.

      Compare with, say, 17th century France. You can’t really be totally unaware of the rise of individualism in 18th century Europe, can you?

      Are you really saying that because civilization didn’t snap immediately to Anarcho-Capitalism that there was no progress? That there never has been?

      India had just been traded from one colonial power to the other

      What, specifically are you talking about here? You don’t sound well versed in the history of India, honestly.

      China and India have historically been pretty passionately anti-individualistic. The Chinese and the Indians of the late 18th century both recognized that as a distinct and obvious difference between “Western” and “Eastern” cultures. People in China and India tended to see individualism as a sign of Western immaturity.

      1. Are you really saying that because civilization didn’t snap immediately to Anarcho-Capitalism that there was no progress?

        No.

        I’m mocking Brook’s claim that “two-hundred and fifty years ago we suddenly discovered the value of individual freedom”. This wasn’t really subtle.

        1. In relative terms, he is correct.

          Individual freedom was a LOT less of a thing a century or five before then.

  5. Free Markets vs Socialism… …sounds like an awesome campaign slogan to me.

    During the first 124 years of its existence, the Fed Gov’t relied on tariffs and excise taxes for 97% of its operating revenue. SInce then, it has relied on the 16th Amendment for 85% of its revenue.

    I’d rather go back to tariffs and excise taxes.

  6. There is nothing wrong with capitalism, but when the concept is corrupted people will want to make changes. Elizabeth Warren does want to throw out capitalism, but she does want to redirect it from helping the wealthiest to the middle class. I think she is right on this point. To must wealth is accumulating on the top and is sequestering capital. We need to move that capital into the economy and the best way to do that is get it into the hand of the middleclass.

    1. She wants to redistribute wealth according to her whim. Go fuck yourself, and her too.

    2. You just don’t get it…

      The lower classes, and even the middle class, mostly just CONSUMES wealth. Upper middle class on up INVESTS wealthy, thus creating more future wealth. If every bit of productive capacity is spent creating current consumables (cars, clothing, fancy food, etc) and none is spent on capital expenditures, like new factory machinery to increase productive capacity… Society would not advance, or indeed fall behind.

      This is where commies lose things. Without the wealthy having extra capital to invest, society can never move forward. In theory in a world where the poor and middle classes actually saved and invested this wouldn’t be the case… But that is not really reality nowadays. Middle class folks used to be responsible enough to save and invest, but barely do anymore. The poor never have.

      So if you take capital from the wealthy it literally halts the advancement of society as a whole.

  7. “Capitalism” is a deliberately vague Marxist propaganda term, encompassing anything from free markets to US-style crony capitalism and fascist’s Third Position. If you “defend capitalism”, you already buy into the Marxist narrative. What you should be defending is free markets and voluntary economic transactions.

    And free markets certainly have existed much longer than 250 years.

    However, what’s fairly new is the pretense of having free markets while government cronies enrich themselves through regulatory capture.

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