Why capitalism? Because it is the “most libertarian” system of social production? Because it happens to be merely a fortuitous adjunct to adherence to the non-aggression principle and man’s natural right to property?
For those of you who still think that, ask yourself this. If you were convinced that (A) complete adherence to the natural right of property happened to necessarily engender untold poverty, suffering, and death, but (B) the tiniest imaginable abrogation of the non-aggression principle, undertaken on a very infrequent basis necessarily engendered prosperity, happiness, and long life for virtually everybody, which would you choose, (A) or (B)?
As Henry Hazlitt wrote, “Justice was made for man, not man for justice.” And as Ludwig von Mises wrote, “Law and legality, the moral code and social institutions… are of human origin, and the only yardstick that must be applied to them is that of expediency with regard to human welfare.”
There can be no purposes other than individual human purposes. There can be no ends, other than individual human ends. There is no conceivable human standard by which to choose ends that would not by definition be an individual human end in itself.
Yet, it just so happens that social cooperation is the foremost means to virtually everybody’s ends, and that, with regard to virtually all humans, capitalism (unbeknownst to nearly all of them) is the only form of social cooperation that can actually provide for their ends. Insofar as most of us are even alive, it is because of capitalism, however hampered it may be. With every impairment of capitalism, the interests of virtually any given individual are harmed. With every unburdening of capitalism, the interests of virtually any given individual are advanced. This is why.
The singular tendency of capitalism is to provide for individuals the satisfaction of their wants according to the extent of their contribution to the satisfaction of the wants of others.
Through the market process, the consumers tend to reward each producer according his contribution to consumer satisfaction: (1) the worker, through wages, according to the contribution of his labor, (2) the capitalist, through interest, according to the contribution of his providence, and to (3) the entrepreneur, through profit, according to the contribution of his judgment.
Capitalism thus encourages individuals to, in their own interest, ever adjust their choices of roles and actions so as to ever increase their contribution to the satisfaction of human wants.
The relative importance of some consumers’ wants are greater than that of others in this process. But the relative importance of any given consumer’s wants, insofar as that relative importance has been determined on the market, is a function of how much he contributed to satisfying the wants of other consumers in his role as a producer.
Thus, in a capitalist order, human choices, through their interplay, coordinate each other so as to provide for human welfare as bountifully as possible.
The business end of social philosophy is making it so that capitalism can flourish. To determine the legal/moral order that will allow capitalism to flourish, it is necessary to understand the capitalist order. The fastest way to truly understand the capitalist order is to carefully study Human Action by Ludwig von Mises, and at least the chapters on production theory (5-9) in Man, Economy, and State by Murray Rothbard. I am actually embarrassed now that I used to hold forth about what the best legal/moral order is for society before studying those two books, and before learning to integrate their teachings in my political positions.
I know economics is hard, and that for many it’s not as pleasurable (at least at first) as reading history, ethics, or political philosophy. But as Mises wrote, economics, “is the pith of civilization and of man’s human existence.” Truly, if we really want to get down to business of solving all the various knotty problems regarding law, society, and political philosophy (and truly, it is up to us in the Misesian community to do so, because everyone else in the intellectual world is too hopelessly mired in fundamental fallacies to even begin to), we must first come to understand the market process. Any sweeping social proposal from one of the many whip-smart denizens of this forum that doesn’t at least try to integrate such an understanding is a wasteful application of a keen mind.
