Isn’t capitalism a system of exploitation?

“In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns. But the man who works as a janitor in the factory producing that invention, receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men between, on all levels of ambition and ability. The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains. Such is the nature of the “competition” between the strong and the weak of the intellect. Such is the pattern of “exploitation” for which you have damned the strong.”

— From Galt’s Speech in Ayn Rand’s novel Atlas Shrugged


If “exploitation” means increasing the standard of living of the masses, tripling the lifespan of the average human being, and bringing wealth and prosperity to all those who live under it, then capitalism is a system of “exploitation.” If “exploitation” means making the masses slaves — then one should refer to Nazi Germany, the Soviet Union, and Communist China.

If capitalists “exploited” the masses by stealing their “surplus,” as the Marxists allege, where was this “surplus” before capitalism existed? Capitalism did not create poverty it inherited it — and only the freedom of production under capitalism can end it.

The only social system(s) that exploits its members are statist/collectivist societies that view its members as tools to be exploited for “the race,” “the fatherland,” “the public good” and “the community.”

Writes Professor Andrew Bernstein on the issue of exploitation in third world countries:

“The real problem in Third World countries is not that Western companies “exploit” their workers — they do not; it is that indigenous dictatorial regimes — whether communist, socialist, theocratic, feudal or military — oppress their own citizens. The moral imperative is not to pressure Nike, et al., into “better treatment” of its employees; it is to overthrow the communist, theocratic or military despots and establish capitalism, the only system that respects the rights of the individual.” [Capitalism and Exploitation of the Third World Countries by Andrew Bernstein]

Capitalism is the only system that bans all forms of coercion (i.e., slavery and dictatorship) for anyone or by anyone, since it regards every individual as an end to oneself, and not as a tool to be enslaved by others.

Capitalism does this by banning the initiation of force from all relationships. Under Capitalism, no businessmen can lawfully force a worker to do something against his will (and vice-versa). Capitalism is not a system of exploitation but is the system of laissez-faire — freedom.