“…Reason in epistemology leads to egoism in ethics, which leads to capitalism in politics.”
— Ayn Rand
Capitalism (from the Latin word capta, meaning “head”) is a social system based on individual rights that unleashes the power of the human mind.
Central to a proper concept of capitalism is reverence for the power of reason and the human mind. It is this power that allows us to harness the power of the atom for energy; build planes and rocket ships to travel the skies and stars, and innovate technology to increase the quantity and improve the quality of our lives.
There is no term today more often spoken and written about in today’s culture in proportion to how it is poorly understood. That concept is that one denoted by the word ‘capitalism.’
Capitalism is not just an economic system (‘the market’) grafted onto any political structure; but is an integrated social system with legal, political, and ethical dependencies. If a culture of peace, progress, and human flourishing is one’s goal, then the economy of capitalism — the free market — depends on a specific legal, political, and ethical foundation.
Without the proper foundation, capitalism is like a skyscraper built on quicksand. All so-called hyphenated (“—”) or Frankenstein capitalisms (‘state-capitalism,’ ‘anarcho-capitalism,’ ‘crony-capitalism,’ ‘democratic capitalism,’ ‘welfare capitalism,’ etc.) are not forms of capitalism but are mixtures of capitalist and non-capitalist elements. It is these anti-capitalist, statist, elements that are responsible for the so-called “failures” of capitalism for which the capitalist, pro-freedom, elements receive the blame.
These fundamentals will be covered in greater detail later on, but in brief, they are:
- Morality: Rational Self-Interest – using one’s mind to survive and pursue one’s personal happiness;
- Ethics: Individualism (Individual Rights) – socially the individual is seen as an end to oneself, and not as a means to the ends of others;
- Politics: Freedom – a government designed to protect the individual’s freedom of action in a social context, by banning the initiation of physical force;
- Law: Objective Law – a legal system geared to protect individual freedom to enable a voluntary, contractual society;
- Economics: Free-market – freedom in association, production and trade of material and spiritual values;
- Culture: Peace, Progress, Prosperity – innovation resulting from a free-market leads to a rising quantity and quality of human life;
In sum: Capitalism is the ideal social system because it leaves the individual free to rationally pursue their self-interest (happiness) free from the initiation of physical force (coercion) under a rule of objective law, resulting in a culture of peace, progress, and prosperity.