Episode Transcript
[00:00:01] Speaker A: Hi, everyone. Welcome to the 324th episode of objectively Speaking. I'm Lawrence Delibo, senior project Manager here at the Atlas Society. Jennifer Grossman has the week off, but I'm very excited because with me today is Atlas Society senior scholar Richard Salzman to do a lecture cutting through all these sort of confusing labels that keep getting attached to the term capitalism.
So as he does his lecture, be sure to add your questions in on whatever chat on whatever platform you're using, and we'll try to cover as many we can here near the end of the video. So with that, let me pass it over to you, Richard. Thank you for joining me.
[00:00:39] Speaker B: Thanks, Lawrence, and thank you all for joining.
Our topic tonight is combating oxymoronic varieties, what's called varieties of capitalism. Now, I wanted to start more philosophically and then get more detailed.
I want to start by saying, especially for audience members not as familiar with it, the essence of Ayn Rand's philosophy and the reason I'm applying it here tonight, which he called objectivism, is embedded in the name itself, in the concept of objectivity. So at length, if you read her at length, she demonstrated how what is our uniquely human faculty of reason, reason, assessing the evidence provided by our senses, is our sole means of knowing things. It's our sole means of knowledge, of grasping reality.
And rationality is a top virtue in her system. Why? Because it pertains to our willful volitional exercise of reason, to our method of thinking, which must be logical. We must go by the rules of logic if it's to guide right action. Right action, meaning moral action and all that. It's a lot right there. But all of that, she said, must be objective. It's not automatic.
People have to be objective to learn how to be objective.
Now, as to capitalism, here's again more background as to forming and using concepts. And capitalism is definitely a concept. It's a big, actually abstract concept. But lesser abstract concepts like reason or reality and objectivity itself are crucial to living well.
Now, the more abstract concepts like these, she stressed, they're not mystical or intrinsic, they're not intrinsically, say, self evident, they just don't, like, leap at you.
But at the same time, they're also not arbitrary, they're not subjective. So they're neither intrinsic nor subjective. And also, it's not a matter of mere semantics. When I go through some of these, what I call hyphenated capitalisms, like crony capitalism and others, we're not just disputing semantics here, we're saying Concepts you must take seriously and they must relate to reality or you can't get anywhere.
So we dismiss the ideas as just semantics or it's all a social contract construct.
Now, people can and often do carelessly kind of borrow concepts, not just in this area, from other people. They don't think independently, so they'll borrow other concepts even if those other concepts are used or abused or confused.
And others too might be, that they're borrowing from, might be cavalier about concepts.
And if that's true, they're going to become fuzzy and confused. If they're confused and fuzzy about words, basic words with our constituents of, you know, say, sentences, they're going to have confusing sentences, they're going to have confusing paragraphs, they're going to have confusing principles or confused arguments, incoherent arguments, we might say.
They'll reach the point where, as you, you know, we'll commonly say they don't know what the hell they're talking about.
That's what it means to say about someone. They don't really know what they're talking about. They're talking, but about what, what is it connected to? Where's the logic and what they're saying?
Now the possibility of making a mistake, the possibility of error in concept formation is greater. This is important to remember, the more abstract the concept.
Let me give you an example of four related concepts I thought of today, from more concrete to more abstract. Now you think about these murderer, guilt, justice and capitalism.
Now, the first you could see on a videotape, say, or handcuffed in the, in the chair, in the courtroom, the murderer.
The last I mentioned is the social system, which I'll talk about more. Capitalism, which includes this legal system, the murderers, and it includes a political system, includes an economic system, some might say even it includes a kind of cultural milieu.
So, but it's easier to say, develop the concept murderer and really anchor it than it is capitalism or justice is very much more difficult. So I don't want to, I don't want to suggest that the semantical problems associated with what I call hybrid versions of capitalism are, aren't plausible. I can see where they come from now. It's Capitalism, by the way, is, isn't literally in the courtroom, but it's institutionally there.
Institutional, even that is a big concept if you know that capitalism, say, is the only true genuine system of justice where the, where the good is rewarded and the bad is punished.
So again, it's much more challenging to get broad concepts correct. Much more challenging. And by correct I mean derived from the facts of reality.
Now, it's difficult with capitalism, but then likewise it's difficult for concepts like its rivals, feudalism, communism, socialism, fascism. We're going to need definitions of these as well, and examples and types, but they can't be of a type, that they all blend together and you can't distinguish between them or differentiate between them.
So what is capitalism? Now, if I were to borrow a phrase which I've used before, but I borrowed it from elsewhere in the culture, it's the premier habitat for humanity.
Capitalism is the premier habitat for humanity. I believe I gave a lecture on this at one of the TAS conferences, so you might find it online. Salzman Habitat for Humanity why? Here's the basic argument. Every species has a nature, and as such it has a natural setting or ecosystem, if you will, a setting in which it survives and thrives, and otherwise it's going to wither and die.
And then for humans, the species, humans, that setting is that indispensable system is capitalism.
Ayn Rand once put it this way, Capitalism is the only system geared to the life of a rational being.
That's pretty succinct. When capitalism has existed, we know millions of people have lived, millions of people have lived longer, happier, healthier lives, richer lives.
And when it's been absent, when capitalism has been suppressed, or when it's been just absent, many millions more people have stagnated. Many have suffered, starved and died. Some of them have been mass murdered by these alternative quote systems.
So if that isn't strong evidence of the idea of a proper habitat and then an inhospitable habitat, I don't know what is.
Now, I've also traced the. What might interest you, the etymology of the term capitalism, which is very interesting and very relevant to the Rand defense, our defense of capitalism. By etymology, I mean the origin of words. You go look this up. And I have this, by the way, in the opening chapter plugging my book, where have all the capitalists gone? The 2021 book.
The opening chapter is called the Mind Based Etymology of Capitalism. I dug into this six or seven years ago.
The Etymology of Capitalism.
The Latin root is cap or kaput, meaning head.
So think of head of cattle.
Someone has a head of cattle, that's their productive assets.
Think, Captain, think baseball cap or capstone or a nation's capital. What's a nation's capital? The head of the government or per capita income or decapitation. All of these concepts pertain to heads, to brains, to, if you will, reason.
So this is very fortunate, maybe not accidental. That is both easy to remember and fully accurate.
Here it is. Capitalism is the system of reason.
It's the system of human heads.
It's a system that respects reason, the system system that protects reason from initiated force, from censorship. Say it's a system that rewards the reasonable.
Interestingly, if you were to guess even those who don't know economics, you might say that must be from Adam Smith, father of political economy. 1776, wealth of Nations, 250th anniversary of that book this year.
It isn't from the wealth of Nations. He never did use the word capitalism, nor did it come from. The next guest, I guess, would be the German socialist Marx.
Most people think Karl Marx, who was anti capitalist, must have coined the word capitalism. No, he didn't either. The manifesto, communist manifesto was 1848. Das Kapital came later. He did refer to the capitalistic mode of production, but not capitalism.
The term wasn't coined until 1850, that's fairly recent, by a French socialist by the name of Louis Blanc, who was anti capitalist.
So it's a relatively new as is, by the way, the system itself. Most economic historians date the system, not the word, to roughly the early 1700s, maybe the middle to the mid-1700s, the start of the British Industrial Revolution.
By the way, an ism. This is true of all isms.
An ism that designates a system so not its components, not just its constituent components.
So that's another signifier that you know, when do you get an ism? When over a long stretch of time you see its components. And of course it comes from not nothing. It comes from, oh, there's capital, then there are capitalists, and capitalists own capital.
Maybe there's a system here.
Anyway, it's not coincidental that capitalism as a system arose in the 1700s. That's the century of the Enlightenment.
So the system of reason, capitalism arose in the Age of Reason. Again, no coincidence. Prior to that, what was the Habitat for Humanity Prior to that? Medievalism, centuries of religion, the Dark Ages, feudalism, serfdom, utter misery.
So again, not coincidental. Now, prior to 1850, men had the concept of capital. I mentioned that capital, equipment, machines, tools, sometimes savings that are needed to manufacture products for sale. They also had the term capitalist, who was what? An owner of capital.
The capitalists owned these means of production, if you will.
And again, I said Marx had capitalistic production.
But it wasn't until the 1800s that the concept of capitalism arose. It did spread widely after that. If you, if any of you would try doing A Google N gram. It counts all the times a word shows up in recorded literature. And if you put in capitalism on an engram, you'll see that there's no mention of it until 1850. And then it takes off gradually and increasingly.
Socialists, by the way, since the 1800s have claimed, and this is definitional now getting into the definitions now, that capitalism, what would they say? Capitalism is the system of, by and for capitalists to stress. Now, capitalists only capitalists. This one class, a minority class actually maybe at odds with all others, that capitalism in their view is like a, it's like a mass casualty weapon used to exploit and expropriate others to secure, say forced labor.
That's a form of slavery in their view. Wage slavery they call it.
And the workers so called are defined as lacking capital.
So there's capitalists who own capital.
Laborers purportedly don't own capital. But by the way, under capitalism, if you own yourself, if you have a right to life, liberty and the pursuit of happiness, you do own capital. It's called human capital. Your skills, your abilities, and you can rent them out or not if you wish. You have someone pay you for, have a capitalist pay you for it. So it's not true that really anyone is devoid of property or capital.
Now socialists say capitalists I mentioned, they either alienate, exploit, expropriate, the word for theft, the net wealth that they say only physicalist labor creates.
That's why they call it, by the way, the working class. Have you noticed this? The working class, the vast majority and by implication capitalists allegedly do not work. They do not labor. You know who's the only trillionaire in the world today? Elon Musk. Elon Musk doesn't work. Apparently he's not in the working class. I mean, here's a guy who works probably 80 hours a week very productively, very creatively, but not technically in the working class. Right. How odd to say that even though those kind of people, they have to secure savings, investment, to launch, to organize, to grow businesses, they don't labor. Allegedly they don't create because why they use their brains more than their brawn.
There's the labor theory of value that says all value is created not by mental labor, by physical labor. So they're dismissed, you know, as robber barons, as like a version of the barons and lords of feudalism, you know, because they, they wear white collars instead of blue collars.
Now here's Rand's formal definition. This is from what is capitalism? First chapter in her book called Capitalism the Unknown ideal. This is 1966 now. And what do you think of this as a definition? Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.
That's fairly succinct. Now the first thing to notice, she didn't say it's an economic system, she said it's a social system. Social is a broader concept, isn't it? It includes economic, but then it also includes politics and includes a cultural issues and cultural norms and more say also notice the stress on rights. Many definitions of capitalism not only just talk about the economics of it, but they'll talk about things like competition and free exchange and a price system and the profit motive and things like that, which is not something that's not in capitalism. But is that the essence of it? Now she's saying the essence of it is it's a rights based system and then stresses including property rights. Why does she have to say that? Because most people distinguish human rights versus property rights. They won't include property rights or economic liberties within the rights frame.
And then all privately owned, distinguishing from publicly owned, which means today state owned. Now here she elaborates elsewhere. I'll go on.
When I say now here she's differentiating from the definition. When I say capitalism, I mean a full. This is Rand, pure, uncontrolled, unregulated, let's say fair capitalism with a separation of state and economics in the same way and for the same reason as the separation of state and church.
Interesting metaphor. In a capitalist society, no man or group may initiate the use of physical force against others. And the only function of the government in such a society is protecting men's rights.
Government acts as an agent of man's right of self defense. Notice self defense itself is a self interested thing and may use force only in retaliation against those who initiate its use. Thus the government is the means of placing the retaliate use of force under objective control, unquote.
Now Rand, I mentioned earlier the etymological origins of capitalism. I think it's fair to say Ayn Rand may not have realized. I don't think she did actually fully realize the relevance of what I've identified as the etymological roots of the concept of capitalism, that it's mind based lineage.
But she would sure appreciate it if told or if she learned, you know, this, this rarest of all philosophers who extolled what she called the men of the mind, you know, those great creators, the creators in every field actually, who hold the world aloft.
Like Atlas, she was more aware, of course, of how the term was being used and abused by its foes by what she called the statist, you know, of whatever stripe, socialist, fascist, communist. And she. Now here's the case. She was bold about using it, she wasn't shy about it, she wasn't defensive or apologetic about using capitalism.
And not only did she work, not only did she use the word proudly, she kind of like doubled down and called it an ideal.
By the way, not Platonically, like, not like, not unachievable, but really and morally an ideal. An idea to be valued, an ideal to be heralded, sought after, fought for, achieved, and an integration here. Notice in other branches of philosophy, metaphysics and ethics, she also embraced radical concepts.
Metaphysics, atheism. There is no God, there is no other world.
A highly charged word, Atheism. People hide behind people who feel that way, who might say, I'm agonist, I'm agnostic, I'm not quite. I won't say I'm an atheist, but maybe agnosticism.
No, she said, it's atheism. No, no God. But also in ethics, famously known for the book the Virtue of Selfishness.
Selfishness, again, another highly charged word. So we got three from Rand.
Atheism, selfishness, capitalism.
She's proudly proclaiming in defense of these controversial concepts, but valid concepts, right? And on the surface, this isn't going to attract.
On the surface, this is not going to attract a wide fan base as she starts out. But does she give a damn about that? I don't think she gives a wit about that. And she says, actually right up front in the book, she says, this is Virtue of Selfishness, subtitled A New Concept of Egoism.
She says the title of this book may evoke the kind of question I hear once in a while, why do you use the word selfish to denote virtuous qualities of character when the word antagonizes so many people to whom it does not mean the things you mean?
And she says, she says to those who ask, my answer is for the reason that makes you afraid of it.
And then she adds, so interestingly, that question implies moral cowardice.
Wow. Unquote. Now consider.
Consider Rand's courage in a book on ethics, which she hopes, you know, many will read.
All authors want to be read widely.
And she says it's moral cowardice. She says it's in effect a vice not to declare openly and proudly in favor of selfishness.
You might say she didn't care. Like I said, maybe she didn't care a wit about Public image or public relations, that she was willing to be smeared and maligned for owning the word, for owning these words.
But I, I suspect, I, I believe that she became a world famous author in part because of this courage, this boldness to us, what do they say? Speak truth to prejudice.
And I believe the same is true of the term capitalism.
It's stark, it's bold, it's proud, it's controversial, it's memorable, it's also unique to Rand and to us as objectivists because, I mean, I don't know about you, I would guess 95% of the time, you know, we know that the word is used capitalism, it's used derisively, it's a dirty word.
You know, like you hear the phrase filthy rich, but you never hear filthy poor.
And so you could look at this as, okay, that's the 95%. Then we as the minority, as the 5% minority, really stand out, stand out in this kind of sheep like crowd using the term, often using it loudly, using it proudly. In advertising, I know in business advertising this, they call this differentiating your product.
It's a competitive advantage, that's a good thing.
And then it invites the question, here's the good part. It doesn't close down debate, presumably you could say it opens up debate. Someone says, how can you possibly believe such a thing?
And then we should only be too happy to answer right now, speaking of differentiating the product, I just wanted to, I'm gonna have to verbally explain this, but I think a visual, a matrix, but I think it'll be known to you. This is also in my book, where have all the capitalists Gone? It's a two by two matrix. Now this is for purposes of differentiating. Before I get into the hyphenated characters in my book, I have a. If you know what a matrix is, this is four quadrants, two by two, distinguishing. Now here the point is I'm distinguishing these broad systems. Capitalism, socialism, fascism. And I have feudalism in there too. Four systems. Now imagine this on the left it says ownership and then it's broken into private and public.
Get that? Now up top, we label it control, also public and private.
So you have ownership and control. I put in both of those. Both of those are crucial, you know, like if you own property, and by property here I don't mean just the means of production. I mean you own yourself. So for example, you own your personal property, you own the means of production. Sometimes economists just refer to the means of production, the tools. I mean everything you Your personal stuff, if you own it. When you think of all the dimensions of ownership, what is it you should be free to earn?
Property. What if they prevent you from working or make you go get a license to even earn property? That's like a basic. But then once you've earned property, freedom to consume it, freedom to trade it, exchange it. That's three already.
Freedom to save it.
Closely connected to invest it.
How about bequeath it?
I think that's the fifth.
Gift it to your heirs. That's a part of the right of ownership. Right, but those are. That's fleshing out what it means to own. But all five of those are ways of controlling, and you're in control.
So if. If I own property and somebody else without my permission, including the government, tells me how to exchange it, use it, bequeath it. I don't really own it, do I? Entitle only.
So who would you put? What group would you put? What concept would you put in the. Call it the Northwest quadrant, which is private. Private.
It's private ownership and private control. That's capitalism. It's both.
And in the opposite southeast quadrant, which would be like what? Public. Public or state? State. State ownership and state control. Even socialists would admit, yeah, that's socialism. They would say, we oppose private ownership of the means of production and we want public ownership of the means of production or property.
And okay, so there are the two extremes. Those are the two opposites again, endorsed by just two dimensions. Two simple dimensions endorsed, I would think, by all sides, so to speak. But here's an interesting concept. The. The. The Northeast. What is the Northeast?
The Northeast would be private ownership, but public control.
You own it, but the government or the group tells you what to do with it. That's fascism. That's economic fascism.
The Nazis, Mussolini, they did not nationalize the means of production. They did not have the government own businesses. Businesses still existed, but they had to obey what the dictators wanted them to do.
The opposite quadrant, by the way, to that is feudalism, which I. I won't get into. But feudalism is the system that preceded capitalism.
So these four major, major systems are captured in this matrix. And I think that should help distinguish, because there's mixed systems all over the place. Now, the US Is not purely capitalist and. And even by the way, a socialist who claims to be a socialist, like Bernie Sanders, who doesn't actually advocate the means of production being owned by government. Just like heavy control, heavy taxation is more in the fascist camp than it is in the socialist camp.
The DSA Democrats are definitely. They want to own the means of production, want the government to take over.
So the other way of putting this is where was the Soviet Union and Red China in the 70s? Purely communist.
Are they less communist now? Yes, they have much more private property. There's still heavy controls, but they move from the southeast quadrant, they're moving up into the northeast quadrant. And meanwhile the US which was much more capitalist 100 years ago, is moving to the right. It's moving from the northwest quadrant toward the same northeastern quadrant which is more fascistic.
Now before I get into hyphens, I have.
It's only about 20 minutes past, 25 minutes pass. I wanted to just excerpt my own comment on this, on the meaning of capitalism from A Pocket Guide to Capitalism, which the Atlas Society put out in 2022. I wrote on page seven. Capitalism is far more than an efficient economic system.
It's acknowledged by friend and foe alike as the most productive life enhancing system ever known. By the way, even Marx said that in the manifesto.
But capitalism is prosperous precisely because it's the only social system that counts on a distinctive morality, rational egoism as opposed to self sacrificing altruism and a specific ideology, individualism as opposed to collectivism and a unique politics, the rights respecting constitutionalism that the founders gave us, you know, as opposed to duty bound authoritarianism.
So there I'm doing really what Rand did, but more elaboration. What does the social system mean? It's got all these dimensions, doesn't it? It's got politics and economics and the legal system.
Now if you go to academia, if you go to, you could excavate all the dictionaries and all the encyclopedias in what is capitalism? Actually, Ayn Rands did that. She went to Britannica and she said, how do they define capitalism? Let's see if they get it in terms of essentials or not.
Here's an entry just made in this, in the very prestigious Stanford Encyclopedia of Philosophy, an entry by Chiara Cordelli, who I know is a professor at the University of Chicago, philosophy professor. And they gave her the entry for capitalism in there and she posted it in August. So this is fairly fresh.
And here's what she says right up top. This is again the capitalism entry, Stanford Encyclopedia Philosophy. You can get this online. By the way.
Quote, she says the case can be made that a more contested concept than capitalism does not exist.
That's confused. But she really meant nothing is more contested than this concept. Nothing.
That's amazing.
Quoting Moore. There is no agreement upon how or whether to define it. I love that part about whether to define it. Many would identify capitalism with an economic system where productive assets are privately owned, labor is hired for money, wages through market contract commodities are traded. Notice how economistic this is, is through exchange markets, markets govern the allocation of resources between the blah blah, blah, investment in large private hands of blah blah, blah towards profit. However.
However, each of these features, if taken separately, can be shown to have existed for a very long time.
Yes, there was trading in ancient Greece and investment.
See what she's saying? Like maybe we don't even know when it's been. It's been forever. Was it even true? Like during the dark ages, in the medieval time, because there was some trading barely going on. You see how confused this is, leaving open the question of what makes capitalism historically distinctive economic system, unquote. Wow, I just gave you a two by two quadrants. How to distinguish them? And maybe it was oversimplified, but she doesn't even try.
This is the opening paragraph, by the way of the entry.
Doesn't even try to distinguish it or date it.
Well, of course, if you don't define it, differentiate it from others, you wouldn't be able to know where to place it historically.
I quote further. She says, further, there is disagreement as to whether capitalism can be reduced to an economic system in the first place, unquote. By the way, notice the reference to agreement. Agreement among minds is supposedly the argument. Unless you get agreement across minds instead of the mind and the concept applying to reality, it's just, hey, can we all get along here and agree on a concept? And the answer is no, we can't. So we won't. So. And yet I'll do the entry for the Stanford Encyclopedia, Philosophy quote, beyond disagreement. This is more on Cordelli. Excuse me, beyond disagreement of whether capitalism is an economic system or an institutionalized social order, there's also disagreement about how, through which methods and with the help of which disciplines to answer the question of what capitalism is in the first place, unquote.
Some emphasize that capitalism is an historically specific phenomenon, the constitution and development of which can only be identified through the study of history, whose complexity may confound analytic precision.
Given these disagreements, it's not surprising that no unitary conversation about capitalism exists among disciplines, unquote.
You don't want to criticize her too much because she just might be reporting from the front lines. Except if you read her other works. One of her famous essays is what's Wrong with Capitalism Published. I think that's one of the reasons they asked her to do the entry, she had this famous article, what's wrong? What is the wrong of capitalism?
Notice the premise. I'm saying whether it's wrong or not, it's wrong. Let's discuss all the ways it's wrong.
The hyphens.
If you read my in the Notes show notes, Supposed Varieties of Capitalism, my essay, you can find it at Capitalism magazine, but then it's reprinted in my book where have all the Capitalists Gone? Okay, so now here's just a sampling of the hyphens you've probably heard before. I call this hyphenated capitalist. I'm going to do two things here and then round up the hyphenated people and then the libertarians who. Another interesting case. First, the hyphenated people. These are mostly anti capitalists or even or at most semi half hearted capitalists who pretty much after the Soviet union dissolved in 91, they looked around and they said, okay, socialism isn't really an option anymore. Capitalism is the winner. We don't really like capitalism. What are we going to do the rest of our lives except split hairs and talk about all the varieties of capitalism?
When a book called Varieties of Capitalism was published in 1991, they had three types, but now there's like 40.
There's just been a proliferation of types.
I call it over differentiation conceptually, which messes everything up.
Here's just a sampling of what I found. This is only part of the. I think I counted 37 different crony capitalism, welfare capitalism, anarcho capitalism, this capitalism with no government, laissez faire capitalism, conscious capitalism, common good capitalism, democratic capitalism, political capitalism, stakeholder capitalism, racial. You have to have that capitalism and even such brazen oxymorons. These are my favorite state capitalism.
I found one the other day, totalitarian capitalism, state capitalism, for example, they'll say, is China.
Why wasn't China a form of capitalism under Mao? Purely communist, right? And I said to you, well, they've moved toward capitalism by privatizing some things and they have stock markets and you look at some of their cities and that's just impossible without. That's not possible due to communism is due to more capitalism. But they're not pure capitalists. They're moving toward that hybrid system called fascism. But that's not a version of capitalism, as they say in state capitalism or totalitarian capital. So you have this problem of you start with we can't define it, but we're going to come up with a whole bunch of varieties.
And it is so arbitrary and it's so haphazard that it, it basically ruins the debate because, you know, if you know what equivocation is in logic, Equivocation is the changing of definitions midstream. You're arguing with someone and they have some concept called, say, Jo justice, and they start making an argument based on classical justice. And the next thing you know, they're referring to what amounts to social justice, which is at odds with classical justice. And they just keep changing their definitions as they go. That is kind of what's happening here. What's happening here is there are so many different varieties. It's like a blizzard of confusion and to not to clarify the debate. They're muddying their waters and they're poor, you know, to appear deep.
And it doesn't help. And maybe they know it doesn't help to clarify what the options are.
One more version of this.
I don't know if you can see this on the, on the screen. Yeah, there it is. Very interestingly, last week, the Darden Business School, University of Virginia professors at Darden, who've been working on this for years. I knew they were working on this, but they finally released something they called the Global Capitalism Index.
This. And it goes back to 2009. And they rank countries by how capitalistic they are.
This is interesting. It's not quite the same as the economic freedom indices that have been produced since 1995 by Heritage and others. So I looked at this and I'm beginning to study it. But before I go into the details, not here tonight, but over the coming weeks, as I'm going to dig into this, I did notice that right up front, they said, well, we have to define it, of course. Right. If you have a Global Capitalism index, wouldn't this index have to start with a definition of capitalism and then measuring. Well, here's what they say. What do you think of this? Here's the preamble. Before I give you the definition, what do we mean by capitalism?
Few ideas have divided economists and political theorists more than capitalism.
There it is again. You just echoed what we heard earlier.
Adam Smith built capitalism around competition. Hayek rejected the label altogether. Milton Friedman said this, Schumpeter said that. I'm paraphrasing.
Without a common definition, we can't say for sure which capitalist systems work best or why.
Well, that's true. Then it says, so the Global Capitalism Index rests on a simple proposition. They do give us a definition.
Amazing. And it's fairly succinct. Are you ready?
Compare this to Rand and me.
Here's the indexers they say capitalism is a system that privileges the ability to deploy capital in open markets as freely as possible while minimizing constraints from public and private sources, unquote.
That is just awful. That's just like a definition in terms of not just non essentials, almost nothingness, no mention of private property rights, a suggestion that there's privileges. It's a privileged system. Harking back right to the kind of Marxist view that capitalism is the system of, by and for capitalists to screw all others.
That's how they're going to measure this. Now I looked at some of the measures, some of the measures are semi okay, but they're heavily economic. And point is here you got this great project, we do need to measure systems and, and compare how they do and they're conceptually about it. It's really sad.
Last thing I'll leave you with and then take questions is the libertarians. There are many, I don't know if you know this. If you just say, if you just search by libertarians, anti capitalist libertarians, you know are. Many of them were influenced by Ayn Rand and many of them are what they call free market economists. But many of them go out of their way to say do not use the word capital, by the way. Some conservative pollsters do this as well. They'll poll young people and they'll say, you know, what do you think of capitalism versus socialism? And not only do they, the young ones lean towards socialism versus capitalism, which is bad enough, but possibly because they see capitalism as a cronyism, so who wants that?
But also that they, they're just confused about what's meant by capitalism.
And if you substitute, it's been found. If you substitute in things like market system or free enterprise, very common, they're a little less anti.
So they do sense that capitalism is a more charged thing. But here's an example of a libertarian.
A lot of these are from the site called bleeding heart libertarianism. What do you suppose that means? Bleeding heart meaning altruism. We need to combine the case for liberty with altruism. We cannot be these selfish objectivists who advocate rational egoism. Nor can we be overtly, openly pro capitalist because that's got a bad rep, got a bad reputation. So here's something by Charles Johnson, libertarian anti capitalism.
Here's one by Brian Kaplan. Many of you may know Brian. I know Brian, he's great. He's an economist at George Mason University. But he said, quote once, this is should libertarians oppose capitalism? It's the question. His answer is yes, he means the word. If we were to start from scratch, I agree, it would be great to scrap capitalism. Etymologically, capitalism does sound like a system of rule by capitalists for capitalists.
And socialism sounds like a system of rule by society for society.
Notice he's dealing here with connotations, not denotations.
What, what, what does it connote in the minds of people? If you look up the different thing, connotation means emotional and cultural associations that a word evokes, whereas denotation is what it actually means.
So you see here the worry, the concern that we're pushing a concept that will. People will recoil because it's this dramatic radical concept.
So neither etymologically may be true. I wish the terms had never been coined.
There's a lot of this and the. I won't go much further in it. There's a lot of this in the libertarian literature. Here's Sheldon Richmond, Libertarians Against Capitalism.
Here's one.
Yeah, libertarian, anti capitalism. That's Johnson.
Here's one by Alexander Salter. Free enterprise, not capitalism. Now he's pro freedom, but again the argument don't use capitalism. Here's a real fan favorite, real favorite in academia of the free market types. Deirdre McCloskey, against capitalism.
Is this Reason Magazine Against Capitalism subtitle? The word is a Marxist coinage. It's actually not Marx, but it is the socialists. Okay, they coined it, but does she have any idea, I don't think she does, of what its actual lineage is, what its actual etymology is? And to love that, you got to love that etymology, that mind based etymology.
No, no, she thinks it's just got bad pr.
And she has an alternative, by the way. She says people really do like innovation. They don't like capital or capitalists. So don't go with capitalism. We need to smuggle in our argument. And they do like, they do seem like new things, gadgets, innovation.
So she came up with the system she calls innovism.
Innovism.
Deirdre McCloskey, just pathetic.
That word has really caught on, you know, that'll really stir up some debate at the cocktail party. What do you think about the rise and spread of socialism and Islamism in America, you know, and just, you know, overwhelming capitalism. And you say the answer is innovism.
Let's go to the rampage. Let's go to the ramparts and the barricades for innovism. This is the kind of, this is the kind of thing that can happen when you don't get the concepts right or when you have kind of moral cowardice. And at root, really the big extreme ideas I've talked about that show up in Rand, atheism, selfishness, capitalism, they're not just plucked out of context. They very much relate to one another as a secular metaphysics of this worldly focused metaphysics and reason and rational self interest and capitalism, the system that makes all those possible and livable, they're definitely interrelated. So if you want to advocate a free system and it's called capitalism and. But you don't like it, you don't like its pillars, you're uncomfortable either religiously or otherwise, with the ethical and metaphysical foundations you'll resist partly out of moral cowardice, but mostly out of, you know, just bad pr. I'm not going to make my case, but people can smell, especially opponents, they can smell apologetics and defensiveness from a mile away. It's much better to be bolder about these things. So I'll stop there. Lawrence, I think we have 10 or 15 minutes. I'll stop there for comments and questions.
[00:46:46] Speaker A: Okay, perfect. Thank you for that. Richard and I have been keeping an eye on the chat. So the first question that we'll have here, we have about 14 minutes. Minutes. First question is going to be from my modern Gault. Good to see you again. And he is asking the question here, why do you think the term capitalism has become so difficult to define even among those who claim to support it? Now, like you just said, there was almost 40 different definitions that you just listed off. So why did this come about?
[00:47:18] Speaker B: You know, I wouldn't quite defy. I wouldn't quite describe them as definitions, but more types.
I know that sounds like it's similar, but when you dig into these, like suppose you get a book entirely on crony capitalism, will they define it at some point? Yeah, you know, a system where favors are grant, special favors and privileges are granted to.
Is it just capitalists? No, I mean it could be abortion, anti abortion advocates or things like that. And so there will be a definition in there somewhere. But I think what's happened is because there is no objective definition beyond what Rand. I think beyond what Rand has offered to even. And yet they know they have to talk about it. The system is here and not just that it quote unquote won the Cold War.
So they're even more perplexed that oh my God, we thought this system. These are the same people who thought this system was doomed, that it was, that it was unsustainable and now it's still around.
And so part of the argument is, well, we have to study it in all its particular peculiarities and differences. And the more we can generate differences, the more scholarly we are.
I think that's part of it.
It's the already existing scholarly problem of people over specializing that happens in academia. People will pick some narrow niche that nobody else studies in the world except them and three people and they become experts in that thing and they get tenure and they publish in journals. So some of it is institutional bias, but some of it, I wouldn't put it all to that. And that's another reason why they would. Well, I specialize in crony capitalism and I specialize in the welfare capitalism and I specialize in this.
And, but I, but I'm, I'm willing to say it's much more philosophically deep than that, that you not being able to have an objective definition makes people go off in all these other tangents and get into the, literally into the weeds. Not just into the weeds. Creating weeds, creating these hyphens.
But, but if you look at all of them, I've listed many of them. They're all mixtures of capitalism by our count, by my matrix approach or by Rand's account, if you disentangle these, they all end up being mixtures of capitalism and its opposite.
And if the opposite is broadly defined as statism, not just socialism, but all versions of stateism, then there are many varieties of those we know. Feudalism, socialism, communism, increasingly theocracy, medievalism is a right that's also anti capitalist.
So I don't know if that's kind of a meandering answer, but conceptual lack of clarity leads to people proliferating types and making it sound intellectual by having some. Look at all the types I'm juggling
[00:50:12] Speaker A: here and handling to flip it on its head, then yeah, for socialism there is things like democratic socialism or stasis. Yeah, really not so many types. Usually we just say fascism, communism. Why do you think there aren't as many?
[00:50:29] Speaker B: That's good, that's good. And also national socialism.
[00:50:34] Speaker A: Yes.
[00:50:34] Speaker B: Which is contracted into Nazism. The socialists don't want to hear that.
You know, what is that, that's interesting. International socialism. That socialism is going to go worldwide. That was the Soviet view, that's really the Marxist view. And then now the Germans say no, no, no, just, just in Germany or just in Italy.
Yeah, there are fewer variations of socialism. That's true. I'm not sure I have a, a reason for that other than it's been the failed system.
So there aren't as many Actual cases that aren't complete disasters.
Whereas there are, you know, even though capitalism as a system is a recent phenomenon, 300 years, it has been, you know, implemented in part in places like Asia, parts of Europe, definitely America, sometimes in Latin America. So the fact that it has this universal application generates a lot of people looking at types. Now look at the Asian model of, you know, what is that Asian model usually like? Less political freedom, but more economic freedom. Like someone like Hong Kong has more economic freedom than the United States.
Economic freedom, but less political freedom, free speech, and whether you can start political parties.
So the fewer number of variations of socialism, I think reflect the fact that there have been so few cases of socialism and most of them have been so grim, so grim actually, that the problem on the other side is denying that those are socialisms at all.
Notice the opposite. So the opposite is. And under capitalism, they proliferate the types to the point where everyone's confused and you can make any argument you want. It's like citing the Bible.
You could prove anything by citing this passage versus that passage. You can do that with types of capitalism. In the case of socialism, if you say, wow, what about that Soviet socialism? What about that China? What about that North Korea Social, they would say, that's not socialism.
Why is that not socialism? Because the workers weren't in charge.
Why would the workers ever be in charge? Well, because Mark said they would. That's it. That's just how far it goes. So it is a kind of funny phenomenon that on their side, they're willing to take examples off the table entirely because they don't want to talk about it. They don't want to talk about the actual worst cases of applied socialism.
[00:52:58] Speaker A: So Ilyishin has a question that just came up in the chat here. He asked, can capitalism be defended on philosophical grounds independent of objectivism, or does a consistent defense ultimately acquire accepting something like Rand's ethical framework?
[00:53:15] Speaker B: The latter, I would say the latter. I mean, you said, can it be done on another philosophic frame, you say, other than Rand?
Rand's a unique case, actually, because I've often said this way, this might bother actually some objectivists. She wasn't the first atheist or secularist.
She wasn't actually the first one to advocate self interest. Adam Smith did.
Wasn't the first one to advocate constitutional government, wasn't the first one to advocate individualism. Some people actually trace that to Christianity, the individual soul, you know, versus the.
I could go on, but she's the first one. Here's what's really Unique. She's the first one that put them all together in an integrated way.
And that the, the answer, therefore is no. That is really the only really good argument and best argument for capitalism because on every level, metaphysics, epistemology, ethics, the nature of government, it coheres, it works, it goes together.
And so you start bifurcating that. And it doesn't work because it's been tried, right?
People have tried to base capitalist arguments on religion. The conservatives do that there. If you say atheists today, what will most people say? What are you, a commie?
So, so notice how unique Rand is. A secular capitalist, not a religious capitalist. But the common combo is religious, religion and capitalism. And then the other common combo is atheism and socialism.
So if you say here, okay, we're going with one world secular reason, rational, rational argumentation. Capitalism is the scientific system. Back to this idea of a Habitat for Humanity that isn't just like a humanistic phrase. It's a, it's a phrase about the actual natural state of human nature.
So that's a really good question. But I think if you mean by a philosophy other than you're talking about these branches that like, other than a secular argument, other than an egoistic argument, no, no, capitalism fails and, and is failing because people try to defend it on those grounds and they undermine their.
They erode the pillars.
[00:55:40] Speaker A: Interesting question, sort of coming from Instagram here. I'm going to pull over from G wizardry, who's asking? In reference to your etymological analysis of the root word of capitalism, couldn't a socialist make the counter argument that heads of cattle could be interpreted as derogatory reference to workers?
What do you think of that?
[00:56:03] Speaker B: I love that and I reject it, but I love it.
Head of cattle. Cattle were used then as capital and to produce things. So no, the argument would not be that. Well, put it this way, if a laborer truly is an animal, he's useless to a capitalist. He's useless. He's just muscles. No one is like just purely muscular. Beast of burden does right with. Even a cattle has some mental capacity and can take dogs and stuff. It can take instruction.
We only have a few minutes, but I don't know if you have more questions, but I did want to say, and this might interest you, Lawrence and others on laissez faire capitalism, because that is a hyphen and so why am I, am I against that as a hyphen? And Ayn Rand uses it and actually I have a somewhat different take.
I don't think even laissez faire when defined as the complete separation of state and economics. Remember that first of all, it's not state and economics. Economics is the study of the economy. It should say separation of state and the economy.
So the wording is sloppy. But even if that's what's meant is a separation, I don't think you can. I think anarchism is the one with no government touching the economy. But then there's no economy, it's a mess because you need the rule of law and you need rights upheld objectively and protected objectively. So I, I used to use the word laissez faire capitalism and I'm reluctant to do so because it's impossible in a system where you have government even acting properly, not touching, so to speak, the economy.
It has to, if only to fund itself. And that's a whole separate discussion of course, how government funds itself by taxes, but it definitely has to fund itself. It can't operate on no funding. So whether it's even voluntary or not, I don't think it can be voluntary. But it's still going to touch the economy. The economy is the source of funding the government and so the legal system and the upholding of contracts and legislation. So again, even if it's non invasive, government is there and it's definitely affecting the economy. So this idea of hands off, no touching, so to speak, is not realistic. And sometimes I wonder and worry that the problem isn't that we're pushing capitalism, but pushing laissez faire capitalism. That is a much easier straw man to burn because it's easy to burn. It's easy to say what I just said, namely, come on, how do you, how are you going to have a complete separation of government? And, and this could be said by, even by libertarian, a non anarchist libertarian. So, so people might want to give that a think.
Lesser capitalism, the, the only concession I made once and then someone reminded me that Richard, that's a hyphen as well, so stop it is. Sometimes I'll use the phrase constitutional capitalism on the grounds that it's one, there's government involved there. I'm not really committing to laissez faire.
Third, everyone knows what a constitution is. It's something that limits government and it also pushes against the idea that it's anarcho. Obviously, if it's constitutional capitalism, there's some kind of implication of a government behind it protecting individual rights. So the only hyphen I've ever allowed myself, and I like the alliteration, I always like alliteration so constitutional capitalism is something you can use if you want. And I wouldn't object to that. I'd recommend that if you had to. You know, by the way, Leonard Peacock, years ago, I said, I think he said in his book, why do we have things like rational egoism or individual rights or laissez faire capitalism? In other words, he said, why do we have these descriptors?
Because the only kind of egoism is rational. So why do we have to redundantly say rational egoism? You, you know what I'm saying. Or objective reality or individual rights? You'd say those are the only kind of rights. So why are you saying individual. There aren't anything such thing as collective rights. And his answer always would be something like, given the conceptual confusions of our age, we must distinguish our egoism from the caricatures and the mistakes. You see the, see the idea. So it's not an implausible idea that you have these hyphens. What you don't want it. You want hyphens that clarify. That's what objectivism is doing, not that proliferate and obscure, which is what's going on now.
[01:00:38] Speaker A: Interesting. That's a great way to wrap things up here.
Thank you so much for. It's always a pleasure having you on talking about these things. I enjoyed it. I know our audience did. So, everyone, if you're watching wherever, wherever you're watching, if you enjoyed this and you haven't already, be sure to like the video and follow the Atlas Society for more content like this. And be sure to Support us at theatlasoci.org forward/donate. Be sure to join us next week when Jennifer Grossen will be back. And it'll be just to warn you early in the morning because our guest will be live from Israel, Professor Gerald Steinberg. He is from NGO Monitor. And we'll be talking about how groups like Amnesty International and Human Rights Watch became political powerhouses shaping the UN and how they are able to form this policy with little accountability for the claims that they make. So we hope to see you then. Take care, everyone.
[01:01:41] Speaker B: Thanks, Lawrence.
[01:01:41] Speaker A: Thank you.
