post

Is Capitalism Voluntary?

Depending on your views, capitalism is one of the most hated or loved economic systems in the world. When you ask “is capitalism voluntary?” the answer depends on what the person thinks “capitalism” means. The primary factor to consider is the level of state intervention—or force—that is being considered.

What most detractors of capitalism are typically against is the union of big business with the government. That union is actually better defined as state capitalism or corporatism—a form of syndicalism that was the basis for the economic policies of Nazi Germany and Fascist Italy. This brand of “capitalism” is a system where the government grants special privileges to certain corporations, unions or other groups.

These privileges could be anything from outright monopoly, to tariffs and subsidies, to burdensome policies and regulations that drive small businesses out. But all these tactics have one thing in common: through the force of the government, people are being prevented from voluntarily choosing their economic actions. Essentially, the government picks which companies are winners and losers—and the citizens are stuck with what the government decides.

In free-market capitalism, it is customers, rather than the government, who picks winners and losers—and the winners are the ones who provide people the product or service they want.

I’ve found that most people who support capitalism are typically thinking about free-market capitalism, also called “laissez-faire” economics. Championed by classical liberal economists like Ludwig von Mises, F. A. Hayek, and Milton Friedman, this emphasizes the right of people to freely and voluntarily exchange goods and services. Under this free-market capitalism, the government is not involved in the economy at all, except to protect private property.


In free-market capitalism, it is customers, rather than the government, who picks winners and losers—and the winners are the ones who provide people the product or service they want. Often what people want is the product that’s the best quality for the lowest price, but not always. People who want to protect the environment can buy environmentally-friendly products. People who care most about supporting small and local businesses can do so. People who only want to buy “Made in America” products are as free as people who only want foreign goods.

What most detractors of capitalism are typically against is the union of big business with the government.

Most importantly from the producer’s viewpoint, people who can find a better way to produce a product or provide a service are free to try, without the weight of government regulations throttling them down. Most importantly from the consumer’s viewpoint, producers must compete for their purchases, resulting in higher quality and lower price.

It’s clear that state capitalism (fascistic corporatism) is not voluntary, since government intervention in the economy is involved by definition. But some people (particularly communists and socialists) declare that even free-market capitalism isn’t truly free or voluntary. They say it involves coercion, because if a person doesn’t work they starve—therefore people only consent to employment under the implicit threat of starvation.

To the extent that this has any merit, the criticism is actually still of state intervention into the market, for without regulations barring their way a dissatisfied employee could start their own business, or at the extreme even homestead a piece of property and start a farm—or choose a subsistence lifestyle.

You can imagine how long a modern communist would last on a deserted island, wailing that he's oppressed because he has to find food to stay alive.

However, I strongly suspect that what is being objected to by the communists and socialists is the plain fact that people must work (in a general sense) to live. They view this as oppression and ascribe it to capitalism, but it’s a fact of reality that the stuff to sustain life does not come automatically—this is not a unique trial of humanity. You can imagine how long a modern communist would last on a deserted island, wailing that he’s oppressed because he has to find food to stay alive. At the same time, the communists and socialists are ignorant that the bounty around them in developed countries is largely the result of human freedom—and therefore, they have a profound ingratitude for both the bounty and its source.


So, the answer to the question “is capitalism voluntary?” largely depends on what you’re talking about when you say “capitalism.” If you mean the fascistic corporatism of most modern states, then the answer is no—and giving more power to the state will only make it worse. But if you’re referring to the ideal of a free-market capitalism, then the answer is yes—and giving more freedom to individuals to make voluntary economic actions will only make it better.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email
Share on print
Print

Leave a Reply

Your email address will not be published. Required fields are marked *