Good News to the Poor (#8) — What’s Wrong with Capitalism?

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To discuss the problem with Capitalism in the context of my argument requires some definition. Because definitions can make for boring reading I turn to the entertaining stylings of G. K. Chesterton to supply mine. I quote at length from The Outline of Sanity:

“Capitalism is really a very unpleasant word. It is also a very unpleasant thing. Yet the thing I have in mind, when I say so, is quite definite and definable; only the name is a very unworkable word for it. But obviously we must have some word for it. When I say “Capitalism,” I commonly mean something that may be stated thus: “That economic condition in which there is a class of capitalists, roughly recognizable and relatively small, in whose possession so much of the capital is concentrated as to necessitate a very large majority of the citizens serving those capitalists for a wage.

“This particular state of things can and does exist, and we must have some word for it, and some way of discussing it. But this is undoubtedly a very bad word, because it is used by other people to mean quite other things. Some people seem to mean merely private property. Others suppose that capitalism must mean anything involving the use of capital. But if that use is too literal, it is also too loose and even too large. If the use of capital is capitalism, then everything is capitalism. Bolshevism is capitalism and anarchist communism is capitalism; and every revolutionary scheme, however wild, is still capitalism. Lenin and Trotsky believe as much as Lloyd George and Thomas that the economic operations of to-day must leave something over for the economic operations of to-morrow. And that is all that capital means in its economic sense. In that case, the word is useless. My use of it may be arbitrary, but it is not useless. If capitalism means private property, I am capitalist. If capitalism means capital, everybody is capitalist. But if capitalism means this particular condition of capital, only paid out to the mass in the form of wages, then it does mean something, even if it ought to mean something else.”

I want to be clear. The rejection of “Capitalism” here is not the rejection of private property, ownership, investment, entrepreneurism, or a relatively free market. In reference to such things I again agree with Chesterton who says, “Too much capitalism does not mean too many capitalists, but too few capitalists.”

The problem Chesterton saw was real, and even today many “Capitalists” who claim to believe in the individual and independent spirit end up defending oppressive business practices by a greedy few at the expense of the many. It may more accurately be termed commercialism, about which he writes, “The point about Capitalism and Commercialism, as conducted of late, is that they have really preached the extension of business rather than the preservation of belongings.” Growth for its own sake is the standard of good in such a system, and that is oppressive.

For example, certain companies become so big that they can influence laws to their own ends as in the case of investment companies that end up using Eminent Domain to gain properties at low rates.  Another example is the issue of Raw Milk. Large corporations can use the FDA to squeeze out competitors who offer raw milk, instigating such evils as a government sting on an Amish farmer.

Capitalism in this sense of the unconditional commitment to growth, what GKC calls “the extension of business,” is not Christian. I make note of this because so many conservative Christians have begun to accept the writings of Ayn Rand. Yet what GKC said of Adam Smith’s doctrine is doubly true of Rand’s defense of capitalism. “It was the mysterious doctrine that selfishness would do the work of unselfishness.”

I have more to say on that next time whan I discuss Ayn Rand’s slight of hand.

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