Why I am Not a Capitalist


It’s fairly common for libertarians to extol capitalism as the ideal economic system. While I don’t consider myself to be anti-capitalist (and there are a few libertarian anti-capitalists…) by any means, I do think capitalists have a limited view of the world and that, ultimately, libertarians’ near-exclusive advocacy of capitalism chains us to one notion of economics or property that fundamentally limits our potential for success as a people.

But before we get to all that, let’s start with the basics. People often don’t know what they’re talking about when they discuss capitalism. They tend to think of it as either  (1) the system that we have now or (2) the ideal libertarian economic system in which all people are free to act as they choose.

First of all, the United States currently operates on a mixed economy, one that incorporates free market and controlled market aspects. While it is true that private ownership does constitute much of the foundation of our economy (and capitalism), several key features of capitalism are missing (unhindered competition markets and price systems come to mind…).

Secondly, it is important for libertarians to realize that capitalism isn’t the same thing as freed markets, and I think some libertarians conflate the two incorrectly. Capitalism is a system that is based on private ownership of capital goods and the means of production. Profit is generally the primary motivator. Capitalism gets lots of points with libertarians because it features things that libertarians love like competitive markets and price systems, a respect for private property and, theoretically, individual autonomy.

And all of that is well and good, but for libertarians, whose primary motivator is freedom for all, this can present problems. Capitalism requires particular, specific notions of the way the market should be structured at its foundations: property rights, individual ownership, and profit motivation. When you commit a society to these notions, you then have to then form rules (whether laws or social norms) that structure society to be able to achieve specific goals.

This is limiting of many fundamental freedoms, and, more importantly, stifles innovation. One doesn’t have to look very far in the history of ideas to see ideas on different ways to structure society, property, the way people interact with each other and trade, and what motivates people. Capitalism requires that we pre-emptively oust those ideas as illegitimate. It is a form of “meta” protectionism. Something that libertarians don’t support at all!

Libertarians should be advocating for free markets (some use the term freed markets, but I am hesitant to do so, as it seems to have implications different than what I am advocating here). That is, an economy for which the rules or laws are unrestrictive at especially the most basic levels. This allows for true freedom for individuals, businesses, and other kinds of organizations that people may want to form.

As libertarians, we should avoid committing ourselves to any principle other than freedom. People will always disagree on what the best way is to form society, but as long as we are free to act on those beliefs without forcing or unduly burdening others to do the same, then we have fulfilled our commitment to freedom. Unfortunately, I do not think that chaining ourselves to capitalism fulfills that goal.

  • Which freedoms does capitalism stifle? And, for these freedoms that capitalism stifles, is it something that libertarians, qua libertarians, should be concerned with? For example, if one of the freedoms that capitalism stifles is the freedom to, say, not work in a dangerous factory, is this a libertarian concern? (Though, I might be completely missing the point on what “freedoms” you are talking about.) Also, how is a system that is based on private ownership and control of resources (which is capitalism) not a free-market system?

    I think the term “capitalism” was created by Marx as a pejorative against free market people because the free market people argued that the owners (and thus the controllers) of capital resources were responsible for economic growth, not the workers, as Marx thought. I might be wrong about this origin, I’ll have to dig around in some of my books.

  • This sounds like moral relativism. The objection appears to be more on the fact that standards are being set than over the actual standards themselves.

    Ironically it is security and things like rules that promote freedom and liberty. It ensures that property rights are universally protected and lays out a system to enforce contracts. Liberty won’t survive anarchy.

    • I am an unabashed moral relativist, so guilty as charged. 😛

      I agree where others have said that it’s probably impossible for a society to function without some kind of rules and regulations, but I think I’d prefer to see more broad, general rules than something as specific as property rights. What those rules might be, I don’t know.

      • Because you’re a moral relativist 🙂

      • yael farache

        It is impossible to be a moral relativist and a libertarian at the same time. They are mutually exclusive. Perhaps you should look up socialism, it would be less contradictory for you to adhere to.

  • This was fascinating! Thanks for writing it. I personally love capitalism as I understand it and think haters simply mistake a mixed economy for it. So I want to take the term back from the mixed-economy folks and reclaim it for free-marketers.

    A few questions.

    “Secondly, it is important for libertarians to realize that capitalism isn’t the same thing as freed markets, and I think some libertarians conflate the two incorrectly.”

    I think defining freed markets and explaining how the two differ would be edifying for me.

    Second, I understand how rules stifle innovation and limit fundamental freedoms. But I don’t understand what system could possibly operate without rules. As an AnCap I do hope we could operate without coercion. But mutually-agreed-upon rules protecting property rights seem necessary to me. Do you advocate a system without property rights? If so, how would that work?

    • I think your questions are great ones, and ones I’m still struggling to articulate. To answer your markets v. capitalism question, I humbly refer you to the Center for a Stateless Society. There is also a book called ‘Markets not Capitalism,(http://distro.libertarianleft.org/for/chartier-and-johnson-markets-not-capitalism/)’ but I have not personally read it yet.

      As for what rules would be in place, I simply do not know! haha. I am not *necessarily* a hater of capitalism, but capitalism does start with certain fundamental assumptions (private property being the key of these), that I don’t think NECESSARILY have to be the rules we follow for everything to work. What that other system might look like, I think it will take other people experimenting and failing and succeeding for us to find that out. As it stands right now, our society is not structured to allow that kind of experimentation.

  • Based Anon

    “One doesn’t have to look very far in the history of ideas to see ideas on different ways to structure society, property, the way people interact with each other and trade, and what motivates people.”

    This, so many times! It’s depressing to see how many libertarians will dismiss notions like communitarian socialism, anarcho-capitalism, ethnic nationalism, monarchy ect. because of their blind dedication to the vulgar capitalist ideal.

    Freedom in secession, that’s what I say.

    • Based Anon

      *Anarcho-communism, that should read.

  • yael farache

    The entire foundation of libertarianism comes from the notion that there are Natural Laws that govern the world, that we can get to know through reason.

    In the same manner the Universe has laws that govern it (Gravity, Newton laws of motion), and matter has laws that govern it (conservation of mass, entropy, etc), and nature has laws that also govern it (Evolution), so does man have laws that govern his life.

    These laws are solid things that exist regardless of who is observing them, they are independent and stable in time. One of these Natural Laws for libertarianism is the Right to Private Property. This inherent right of man is not questionable and is not an invention, it doesn’t spring from men “trying to structure society and property”. The second law is that of volition. The idea that every man is capable of determining what is in his best interest, and nobody has the right to impose things on him by force.

    If you do not believe in these ideas then you are not a libertarian. You are a socialist. Its pure and simple.

    • Molby Wartooth

      Nonsense. There are perfectly comprehensive consequentialist reasons to be a libertarian. One doesn’t need to subscribe to Natural Rights at all.

  • Jon Holloway

    The company I work for was taken over by an American company, I wish they could read “Obliquity”by John Kay , a really good book about economics; but one that capitalists may not understand, even if they can quote it chapter and verse!
    I like the idea of making money by BEING GOOD AT SOMETHING rather than shuffling stuff around to try and squeeze a bit more out.