Liberty is not found in optimizing the amount of time the pleasure centers in our brains are stimulated. It is found in fulfilling our obligations to our families, our communities, our nation, and our God.
Capitalism, being the only commonsensical economic system that exists in the world, has always been the economic system of civilized societies long before it got its name. The only variable of note is who has agency in a given society and thus in its economy and who does not.
In the cradle of civilization, the Fertile Crescent, extending from India to Egypt, the vast majority of inhabitants had almost zero agency. They worked the fields and built irrigation canals, they planted and they harvested. They were not necessarily enslaved, but they had very little liquid wealth and thus very little economic agency. But even in these societies there were classes of artisans, scribes, priests, professional warriors, and of course the hereditary nobility, all of whom had both liquid and non-liquid assets and thus had varying degree of economic agency. For these segments of society, the system of economic organization was what we today would call capitalism.
What are the tenets of capitalism? What defines it on the basic level? First and foremost is the ability of an individual (for the purposes of this discussion, an individual who possesses economic agency) to freely sell the fruits of his labor and with the proceeds buy whatever he needs or wants, with the prices for all transactions being set by supply and demand. This is what we would call a free market, but it is not enough. There is another condition, no less important and that is equality of agency. In capitalist systems, a king has no more economic agency (though he may have more means) than an artisan or a scribe. In other words, if a king wishes to buy an ounce of gold to have a piece of jewelry made for his new concubine, he would pay the same price, or nearly the same, as his jeweler would pay for the same ounce. Finally, capitalism cannot exist in a vacuum. As a purely economic system, it cannot survive outside of a political system, specifically one that provide guarantees against the arbitrary or excessive seizure of private assets for any reason.
To summarize, capitalism is defined by a mechanism for the exchange of goods and services (market), an equality of terms for all agents in the market, and a guarantee against asset seizure, be it by robbery or arbitrary and excessive taxation. There is quite a bit of resiliency built into capitalism, which is what has made it into such a successful economic system. It can tolerate inefficient markets that have existed for centuries due to technological limitations. It can tolerate a high degree of agency inequality, which we sometimes call corruption, whereas preferential treatment is extorted or freely given for any number of reasons from nepotism to kompromat, and it can tolerate surprisingly arbitrary, greedy, and simply dumb rulers who take it upon themselves to interfere in the markets for noble or ignoble reasons.
What capitalism cannot tolerate is when a small group of people, under the pretext of extending economic agency to those who do not have it, so massively manipulate the flows of capital as to render the markets meaningless and thus disrupt their price-setting function. This action is what we call “communism”. At the basis of communism as laid out by Karl Marx is a class war between a group of people who have economic agency, a group he called the bourgeoisie, and a group of people who do not have economic agency, whom he called the proletariat.
The funny thing is that in the place that Marx had occupied in the time-space continuum, in late 19th century Western Europe, there were very few people without economic agency. The industrial revolution vastly expanded the number of economic agents by making skilled and even unskilled labor a highly sought after commodity for which people who could provide it got paid in very stable currencies, gaining a measure of liquidity and becoming economic agents.
Of course, this radical expansion of the number of agents meant that the spread between the means that were available to those at bottom and those at the top of this spread also grew dramatically, but there were very few people in Western Europe in Marx’s time who did not participate in the economy.
At the basis of Marxism is the age-old idea that to increase one’s economic agency, rather than invest in one’s ability to provide higher value-add products or services, one should band together with other low-agency individuals and steal economic agency from those who have more of it. Needless to say, this disrupts, simultaneously, all three of capitalism’s foundational tenets: it destroys the price-setting ability of the market, it gives more economic agency to those willing to engage in violence, and it promotes rather than inhibits the illegal seizure of assets. This is what we call communism.
There is one catch though and it is a big one. Low-agency people are low agency for a reason. They have limited skill sets when it comes to organizing, leadership, technology, anything really, which makes them ineffective as a change agent. Unless. Unless a group of unscrupulous high-agency people is found willing to lead the proletariat, to use it as a means of increasing their own agency even further. When that happens, as it inevitably does in any communist or quasi-communist (socialist) society, there are two outcomes: first, economic agency becomes much more narrowly distributed. Communist societies like the USSR harken back to deep antiquity when only a very small group of people, maybe 5% of the general population, had any economic agency whatsoever. Second, all the efficiencies of the free market system disappear. As folks as diverse as plantation owners in the American South and Joseph Stalin had found out, slave labor is the least efficient form of labor imaginable, yet the drive to be a slave owner, to lord it over others is a powerful drug to which our technological oligarchs are as addicted as Pol Pot or Fidel Castro had ever been.
Liberty. It is simply inconceivable without economic agency in a capitalist system. One does not have to be “rich” to be free, but one must be free to sell one’s skills, in whatever form they may take, in a free market and for a price set by the rules of supply and demand. One can never be free if the fruits of one’s labor are worth less than the those of his neighbor just because the neighbor has friends in high places. And one can never be free if his hard-earned assets are subject to forfeiture by a tyrannical government or a band of robbers.
But how can capitalism survive the natural tendency of people to simply take by force whatever they can if they can get away with it? How can we stop a person with a sword from getting a better deal than a person without? Surely the seller values his life over a few dollars? This is where the other two pillars of liberty, community and religion come in.
We humans have evolved to hold in our hearts tender feelings for our own families to the point of sacrificing our own lives for theirs. Civilization was born from extending such feelings from nuclear family to clan, from clan to tribe, and from tribe to nation. When we feel a part of a greater whole, when the people we are dealing with are “our” people, we are emotionally unable to deal with them unfairly, or at least most of us are. But what about those whose greed is such that it overcomes any feelings of togetherness, of camaraderie, and even of shame? For those, in the extreme cases, our community will arrange a place in a jail cell or on the gallows, but those will be few. How about the many who will deal underhandedly if they think they can get away with it? For them, we have religion.
Religion, perhaps surprisingly, has nothing to do with faith. Faith is a highly personal matter, the most personal of all matters in fact. We can never know what anyone’s relationship with God, if any, is, nor should we. Religion, on the other hand, is a public institution. It is a framework for building stable communities, it is, in fact, the only foundation upon which they can be built. Churches are places in which we all used to come together and look each other in the eye. Back when America was Christian, the rich and the poor met once a week in church. A side-glance across a church pew from a buyer who thinks he had been shortchanged to the shopkeeper who shortchanged him goes a long way to make sure that never happens again, that the market stays true.
The various “star” ratings we give each other in the course of e-commerce are a substitute and perhaps it could even have been a good one, had there not been rampant abuse of it via “bots” and had the ones and zeros that control it not originated in one place, a place controlled by such a small number of unscrupulous, greedy, and godless people.
This may sound like a paradox, but to be free we must accept a heavy load of obligations. Obligations to deal fairly, to raise a family, to support our community and our nation. Liberty is not wantonness. In fact, wantonness is slavery. He who has incurred no obligations in his life is nothing but a slave to a few chemicals running around in his brain, generating weak electrical pulses here and there. How silly, how undignified it is to be a slave to an organic molecule rather than a faithful servant to one’s spouse, one’s children, one’s country?
The West today has completely destroyed its religion, Christianity and its sense of community as well. This was done quite purposefully by power-hungry people who get high by taking liberty away from as many people as possible, by increasing their agency at the expense of others. They have done so by marshalling those organic molecules that make us feel good, by giving us “free” access to acquiring those molecules via opioids, junk food, marijuana, and pornography. All we had to do was shutter down our churches because we couldn’t bear to look each other in the eye any longer, give up on our communities because we were made to feel ashamed of liking those who look like us and talk like us more than others, and consent to get handouts in the form of welfare or disability payments or you name it.
Economic agency, religion, and communities have all peaked globally around the middle of the last century and have been going down in an ever accelerating fashion ever since. As a consequence, liberty, that wonderful flower that blossoms when all three of the leaves that nourish it are in harmony, has also been on a sharp decline.
But wait a minute, you say, aren’t we better off than ever before? No, we are not, I answer. Just because you have a refrigerator with an LCD screen and an automatic vacuum cleaner doesn’t mean that you are free. It simply means that you can spend more time generating those organic molecules that give you a fleeting feeling of pleasure, nothing more. If you want to be really free, find out something about your great-grandparents and strive to make yourself worthy of them or even better strive to make yourself be like them. If we all do that, we may yet recover that which we have so willingly squandered.
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The West`ve got it`s liberty in a process that `ve “killed” the religion. The killed religion : the liberal Church in a secular state, provide the needed liberty for the community and capitalism.
Splendid article, thank you!
The economic system that the writer talks about is not capitalism; it is free enterprise, only possible in a free country, and even then it has restrictions. It cannot survive without the rule of law and fairness from the law. It cannot survive without individual ownership of something.
Capitalism is the use of money as capital to create something, and only works if there is free enterprise, with individual freedoms and ability to own something, being real estate, currency, or stuff. Capitalism has its strength in free enterprise, not the other way around. Capitalism has grown because someone got rich enough to gather enough capital to start a business, whether $100 loans in India to housewives, or millions to start a high tech venture. Without the ability to use capital in this way, capitalism and Western economics would come to a quick halt.