A Dirty Word: Why Capitalism’s Bad Reputation Is Largely Undeserved

Despite its undeniable importance as a mechanism for human progress and flourishing, capitalism is widely associated with mass poverty, social inequality and a host of other negative externalities. Capitalist is considered a dirty word, especially on the left, where capitalists are traditionally portrayed as a shadowy elite of ruthless exploiters, who contribute nothing to society. Their profits are immoral, and liberal democracy is nothing but a smokescreen to cover up their manipulations, while the masses of ordinary people are deliberately kept in a state of “false consciousness” (Engels), preventing them from seeing the true nature of their alienated existence.

It has thus been concluded that, under capitalism, social conflicts and disparities are invariably the result of external conditions—systemic oppression, exploitation or discrimination—rather than internal traits. As there is apparently no such thing as human nature, it follows that all it takes to solve social problems is to overthrow the socioeconomic conditions that render us unequal and self-interested. Usually, this solution involves a massive redistribution of wealth. (As wealth is taken for granted, little attention is paid to wealth creation.)

This persistent belief, for which evidence has yet to emerge, goes back to Karl Marx, who held that the revolutionary overthrow of the capitalist system, followed by an intermediate stage known as socialism (“dictatorship of the proletariat”), was inevitable and would lead to a communist utopia. He was wrong. Whether we call it Marxism, socialism or communism, revolutionary collectivist redistributionism, which is based on an idealistic rather than evidence-based view of humanity, has led to some of the worst humanitarian catastrophes in history, leaving entire societies in ruins. “From each according to his ability, to each according to his needs,” as Marx so famously put it, has turned out to be a recipe for disaster.

Under western-style democratic capitalism, by contrast, the masses of ordinary people have come to enjoy a greater measure of freedom and prosperity and increasingly live longer, healthier and more peaceful lives than ever before or under any other system. The reason is simple. People are not pawns that can be moved around at will in pursuit of some collectivist utopia. They have agency, and a system based on individual liberty, personal responsibility and free enterprise, in which they can pursue their ambitions in open competition, allows them to efficiently meet and communicate their individual needs and preferences.

When large numbers of people participate in free and competitive markets, disposing of their labor and their property as their own, they not only trade goods and services, but also information about their actual (rather than ideologically determined) needs and preferences (using the language of price to indicate supply and demand), which can change as circumstances change. A more efficient and more productive way to get large numbers of people to cooperate on a voluntary basis has yet to be discovered.

In an economic system based on collectivism and central planning, on the other hand, production is, by definition, detached from people’s individual needs and wants. These are overridden by so-called collective interests, determined by ideological authority. But collectives don’t have interests: people have interests. And if people are free to pursue their individual self-interest within a legal framework of democratic (i.e. non-arbitrary) laws and institutions, they tend to provide goods and services—with the aim of making a profit—that benefit others. Adam Smith famously referred to this effect—the unintended social benefits of individual self-interested actions—as the “invisible hand.”

Contrary to how it is portrayed by the hard left, capitalism is not a zero-sum game. One person’s gain is not another’s loss. When people exchange goods or services, they each get something in return that is worth more to them than what they give up: it is a positive-sum game. The secret of capitalism’s unmatched productivity is that it creates incentives for individuals to innovate and provide value for others.

By contrast, collectivist redistributionism disincentivizes individual initiative and curbs productivity—to the detriment of society as a whole. As history has taught us, such a system can only persist in the absence of individual autonomy, especially if it is aimed at achieving some higher goal such as social justice (equality of outcome). The fundamental problem is that “if you give the government enough power to create ‘social justice,’ you have given it enough power to create despotism,” says Thomas Sowell. To achieve equality of outcome, people must, at any rate, be prevented from outperforming one another, which is an inevitability given that human beings are equipped with different skills, talents and ambitions. Therefore, their freedom to use their skills, realize their talents and pursue their ambitions as they, as autonomous individuals, see fit must be restricted—by force, if necessary. The consequences are repression, mismanagement and humanitarian disaster:

Of the seventy million people who died in major 20th-century famines, 80 percent were victims of Communist regimes’ forced collectivization, punitive confiscation, and totalitarian central planning. These included famines in the Soviet Union in the aftermath of the Russian Revolution, the Russian Civil War and World War II; Stalin’s Holodomor (terror-famine) in Ukraine in 1932–33; Mao’s Great Leap Forward in 1958–61; Pol Pot’s Year Zero in 1957–79; and Kim Jong-il’s Arduous March in North Korea as recently as the 1990s.

We may add Venezuela under Chavez/Maduro, praised by left-wing populists such as British Labor leader Jeremy Corbyn, to this list from Steven Pinker’s Enlightenment Now. Yet it is capitalism, not socialism or communism, that gets a bad rap. Even those wise enough not to resort to the trite but that wasn’t real communism defense tend to argue that capitalism causes poverty and inequality: a logical and factual fallacy. For most of human history, most people lived in extreme poverty. This changed with the advent of industrial capitalism. “The Gross World product today has grown almost a hundredfold since the Industrial Revolution was in place in 1820,” writes Pinker. In the same period of time, global extreme poverty has fallen from 84% to under 10% and may be eradicated in our lifetime. This has had many positive knock-on effects, such as a decrease in child labor around the globe.

As with poverty, inequality has always existed. In the modern capitalist world, however, “Inequality in life outcomes is decreasing both across and within countries,” according to the Economist. This may have something to do with the fact that capitalism, being meritocratic in nature, “undermines status and introduces social mobility,” as Milton Friedman puts it in Capitalism and Freedom. What’s more, in a free market economy, arbitrary discrimination constitutes a competitive disadvantage and, therefore, comes at a cost to the discriminator.

Nor is inequality an adequate measure of wellbeing. Nobody is worse off because of economic inequality. Consider the following thought experiment: if everybody’s income doubled tomorrow, the gap between those at the top of the pile and those at the bottom would widen, but everybody would be better off for it. Conversely, if everybody’s income was halved, they would be more equal but worse off.

It’s simply not true that only the rich benefit from economic growth. Thomas Piketty, the author of Capital in the Twenty-First Century, was wrong when he wrote, “The poorer half of the population are as poor today as they were in the past, with barely 5 percent of total wealth in 2010, just as in 1910.” As Pinker points out, today’s total wealth is “vastly greater than it was in 1910.” So, “if the poorer half own the same proportion, they are far richer, not ‘as poor.’” On top of that, their money buys them a vastly greater variety of life-improving goods and services, most of which either didn’t exist in 1910 or were prohibitively expensive.

Inequality does not imply injustice. Inequality of outcomes is a byproduct of economic freedom, and “economic freedom, in and of itself, is an extremely important part of total freedom,” argues Friedman. Conversely, this means that equality of outcome necessarily entails a loss of freedom. Having examined real socialism, Friedman arrives at the following conclusion: “The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”

Needless to say, Marxists see things differently. Part of the reason is that the classically liberal definition of liberty—freedom from coercion—is antithetical to the Marxist definition—freedom from inequality. The Marxist ideal is a classless society, not individual autonomy. In Capital, Marx described society in terms of class conflict: those “who have nothing to sell but their labor power” (the proletariat) are exploited by a capitalist elite (the bourgeoisie), who grow richer while deliberately keeping the poor poor, i.e. wage-dependent. In other words, the rich get richer at the expense of the poor, which necessitates an ever-growing army of destitute wage slaves.

This theory is demonstrably false. Those countries that have the highest density of rich capitalists are also the ones that have the lowest rates of poverty and the largest middle classes. Worldwide, the number of billionaires has gone up, while poverty has declined sharply. According to the World Economic Forum, “Half the world is now middle class or wealthier”; and for the first time in human history, “the majority of humankind is no longer poor or vulnerable to falling into poverty.”

Of course, capitalism also has its pitfalls. Financial markets can spiral out of control, and there is clearly something wrong with multinational corporations controlling governments (whether, or to what extent, such phenomena can be laid at the feet of capitalism is another question). Externalities—i.e., costs passed on to other countries, other species, the environment or future generations—do occur and deserve to be criticized. We must not forget, however, that capitalism is merely a mechanism which we use to further our interests. We are the ones who define what those interests are, and we determine the morals that guide our actions.

Given limited natural resources, capitalist economic growth has been attacked as inherently unsustainable. This criticism implies that we are nearing said limit faster than we can come up with alternatives. But we don’t live in a static world. We have renewable resources, including our most valuable resource: human ingenuity. Innovation is the key to human progress, and capitalism drives innovation, not least because it rewards self-interested actions that benefit large numbers of people. Those who condemn capitalism wholesale must demonstrate—conclusively—that there is a viable alternative that can yield the same amount of freedom, progress, and prosperity.

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18 comments

  1. 1.It is not a requirement that capitalism is required for innovations and productivity. As can be seen , Soviet Union was almost equal to USA in Military segment of the economy.
    2.Soviet union was the fastest in terms of closing the gap in living standards for any country. Unlike USA it was partially destroyed in second world war and had to live in a hostile area for the whole of it’s existence. Befor some body thinks KGB, KGB has lost the cold war, how effective it was can be gauged from that. Also see Saudi Arabia ,how it is thriving as a dictatorship under the protection of USA.
    3.If there was no cold war and the rich countries have not ganged up against soviet union, it would have been a different world.
    4.compare the stagnation of soviet union(1975-90) and USA(2007-2016)
    5.About the famines,the Holdomor is not only in the Russian part of Ukraine but also in the Volga region (there are no bad intentions in stalin to kill only ukranians) .Also there are no famines in Soviet union after 1948 up to 1990. Kiev was may like third city in Soviet union.

    .”Financial markets can spiral out of control, and there is clearly something wrong with multinational corporations controlling governments (whether, or to what extent, such phenomena can be laid at the feet of capitalism is another question)”
    it flows from the preferences of those whose describe themselves as capitalists and follow its rules.

    some of the worst humanitarian catastrophes in history, leaving entire societies in ruins at least or some time. that would be first world war & second world war,vietnam, iraq,libya ,syria etc., all of them involves USA(not 1st initially ) & other capitalist countries.And they are still happening in 21 st century.

    1. Thanks for your comment! 1. Capitalism is a necessary, albeit not sufficient, requirement for freedom and sustainable progress. The Soviet Union, being a totalitarian state controling huge amounts of expropriated capital, sacrificed human freedom for technological progress and invested huge sums of money in military and industrial espionage while draining its people until it eventually and inevitably broke down. 2. Compare living standards in West Germany and East Germany (both destroyed in WWII, one socialist, the other capitalist) in the 80s, or, for that matter, communist North Korea and capitalist South Korea today. And would you have preferred to live in the US or in the USSR during the cold war? 3. Without communism there would not have been a cold war in the first place 4. Don’t know what that’s supposed to prove. Economies stagnate sometimes, usually because of short-sighted government interventions. 5. See 2. Your final 2 points:”it flows from the preferences of those whose describe themselves as capitalists and follow its rules”: Where’s your evidence? “all of them involves USA”: All you’re saying is that America has been involved in wars, some just (e.g. against Hitler), some unjust, which refutes none of the points I made in the article.

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      1. 1.”Capitalism is a necessary, albeit not sufficient, requirement for freedom and sustainable progress.” no argument but so is socialism or communism (if it happens in France) i think .”The Soviet Union, being a totalitarian state controling huge amounts of expropriated capital, sacrificed human freedom for technological progress and invested huge sums of money in military and industrial espionage while draining its people until it eventually and inevitably broke down”
        a)from what i read in kennedy :rise &fall of great powers,by 1900 russian empire has like 10% of economy compared to britain.By 1970’s it is 60% of US (living standards are almost same as avg.west).
        b)Also World war-I ending is bad for europe and there was civil war in Russia upto 1921.by this time,whatever Capital would have been gone .now stalin introduces five year plan in 1928 .by 1939 what ever expropriation of big farmers and industries would have been completed.now there is second world war soviet industrial areas are destroyed upto ural mountains.Capital is again gone to some extent.
        (also there is purges by stalin upto 1939 or 41, i am not neglecting ,but my line is not about purgings by stalin )
        {UK and USA has tried to occupy russia (not a firm attempt)This was in 1919, as part of the Allied invasion of Russia in support of the White Army
        [Britain used chemical weapons – M-Devices, which induced vomiting – against the Bolsheviks. Chemical weapons were “the right medicine for the Bolshevist,” in Churchill’s words. (Source:counter punch article by .J. Coles and Matthew Alford)]}
        c)about military espionage (atomic bomb every country has done except USA ) but i dont think there was much in other military weapons because ICBM tech is same as sputnik satellite tech. Hydrogen bomb was developed by soviets also.About industrial espionage i have no idea. also My point in the last comment is about KGB.
        d) About break up of soviet union, it is not due to outspending on military (i know that is not standard version) but it was dissolved due to belezheva accords .that was the last act.(My argument as well as some others is it is a political thing ) and also due to US policy of Cold war.It was not inevitable.
        2. I think all the resources of germany are concentrated in West Germany (Ruhr valley).Then there was Marshall plan and market access to USA for it’s exports. I hope the above would be sufficient to explain the difference in GDP .but living standards are ok i think (Any way i have no REAL idea about East and west german economy in 1980’s). North Korea was good up to some point but i have no idea about it.
        3.You have to seriously think about US militarism on stand alone basis.Also cold war started right after 1945 and many things happened before Marshall Plan and NATO in 1949.Also there was continuity in the policies of european powers.Just like US has a right to spread democracy ,Markets .Soviet Union had the right to spread communism.Without communism in Soviet Union ,there would have been Imperialism and colonies. Cold war was better than that.
        4. i am talking about the stagnation of the economy of USA (2008-2016) and USSR (1978-1990).It was said the soviet economy is barely growing.That’s why it imploded.crudely put has USA or UK collapsed ?though soviets had more nationalities (i am trying to say it is not economy but other factors are responsible for soviet collapse).”Economies stagnate sometimes, usually because of short-sighted government interventions.”No, USA is the greatest of all capitalist economies (Principle wise) and there is minimum government intervention in USA than in any other country.
        5.Nancy pelosi , US politician (Democrats) is saying we are capitalists. businesses in USA will definitely say they are capitalists.
        In the original article while talking communism you said some of the worst humanitarian catastrophes in history, leaving entire societies in ruins was done by those who said they are communists but these wars (like vietnam,iraq, libya etc., )are also due to those who profess capitalism and had the same effect.

  2. “When large numbers of people participate in free and competitive markets, disposing of their labor and their property as their own, they not only trade goods and services, but also information about their actual (rather than ideologically determined) needs and preferences (using the language of price
    to indicate supply and demand), which can change as circumstances change.”

    1.Those large numbers have a prior history , where they have acquired the properties in a despotic fashion (thousands of acres of land with single family etc.,) Also some times, by their human nature which leads to their preferences, some people enslave (or) give only food to live and then control their behaviour , in the past ,and still continuing in other countries , and Now their preferences are ignored like Health care issue in USA etc.,
    Also if you go to a market or vegetables,the price discovered varies from person to person .How is that a right price .(Some people lose more than others )

    “capitalism is not a zero-sum game. One person’s gain is not another’s loss. When people exchange goods or services, they each get something in return that is worth more to them than what they give up: it is a positive-sum game. The secret of capitalism’s unmatched productivity is that it creates incentives for individuals to innovate and provide value for others.”

    2.What if the goods or services cannot be given up (or) some people don’t have any thing except labour and the game is played such that some people are unable to buy food, clothing shelter and internet (their human nature is being denied).the game is not positive sum.
    Also if capitalism is meritocratic, how come the CEO’s are earning a lot more than what their intelligence could afford (even nore than CEO’s o previous years ,what circumstances have changed for them?)

    3.From the secret (number) of capitalism ‘s unmatched productivity, population growth should be deducted, studying in universities and inventions(medicine, engineering etc.,) by some people (not for exchange) should be deducted and which could have been given free was being sold and made in to profits.

    “The Gross World product today has grown almost a hundredfold since the Industrial Revolution was in place in 1820,” writes Pinker. In the same period of time, global extreme poverty has fallen from 84% to under 10% and may be eradicated in our lifetime. This has had many positive knock-on effects, such as a decrease in child labor around the globe.”

    4.Child labour in industries is due to industrial revolution. Although the World Domestic Product has increased 100 fold, still there is child labour .Extreme poverty is increasing again .

    (Also the author has clearly studied economics (neo-classical), it is difficult for some one who has not studyied economics to criticize what is written in university text books)

    1. Most of these are old Marxist arguments which have long been refuted. I recommend Thomas Sowell’s >Marxism<. As for child labor, "In almost every listed country, a majority of economically active children work in agriculture, forestry, or fishing." Most working children are, and have always been, unpaid family workers. Only a small proportion of working children have worked in factories or mines. Source: https://ourworldindata.org/child-labor

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      1. 1.if you go to a market for vegetables(not super markets or organised grocery stores),the price discovered varies from person to person .How is that a right price. (this is from my experience only )
        2. I still think my 2 and 3 points are valid .like about CEO’s pay , inventions which started industrial revolution being used by others(few) and charging money from those products earning a lot of profit .some one said GDP= population growth (due to advances in medicine) +productivity (in the 1750’s at least , only in leisure can machinery can be invented and only traders can get profit by selling cotton,wool for lot of population)
        3.about child labour, only in industries of england of 1800’s were children forced to work long hours under other people’s control and now even though in developed countries it may not be there .But in other countries , it is still continuing

        i will try to read Thomas Sowell .Thank you for replying.

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  3. This article is a beautiful panorama of propaganda and cliches. A few points to make:

    1) Under “western-style democratic capitalism,”

    * 10 million Congolese people were killed by the Belgians so the latter could sell cheap rubber to the rest of the world (read King Leopold’s Ghost)

    * Over 10 million Indians died over the course of a century because of British agricultural policies that privatized farmland and forced farmers to grow opium instead of rice. Nothing says capitalism like making Indians starve to death so you can sell drugs to the Chinese.

    * Does Nazi Germany count as part of the capitalist nightmare? Hitler suppressing labor unions and selling public assets to corrupt corporations? Or are we tossing that one aside for convenience?

    * The list of colonial atrocities, massacres, and genocides is too great to even comprehend, much more attempt to write down. One could mention the sack of Tenochtitlan by the Spanish in 1521, the Germans wiping out scores of African peoples in the early twentieth century, the Dutch massacring 15,000 Banda people in 1621 to get control of the nutmeg trade, the French killing hundreds of thousands of civilians in Algeria, and the British…well everywhere. They were the most powerful, hence necessarily the most ruthless and genocidal.

    * 10 million African slaves were shipped to the New World to provide cheap labor for Western-controlled plantations, not to mention hundreds of thousands of Asian and European workers pressed into forced labor resembling slavery

    * And remind me: are the millions of civilians killed by the United States in Korea and Vietnam through indiscriminate carpet bombing the victims of capitalism or not? How about the 200,000 we killed by dropping nuclear bombs?

    2) Everybody seems to know about the horrific things that happened under Stalin and Mao. And they should. Those people did some terrible things. But how many people know that the Soviet economy actually grew substantially in GDP terms under Stalin’s leadership? According to Angus Maddison data, the Soviet standard of living rose by a factor of 12 by the time the Soviet Union was collapsing around 1990. How many people know that the population of China exploded under Mao, doubling by the time he died? Yes we should know about the great achievements and the crimes and the genocides and the atrocities, but that goes for all sides: capitalists and communists.

    3) The author does not seem to be aware, but our lives are already tightly controlled and managed under capitalism. Workers in America have seen their benefits reduced, real wages have stagnated for millions over the last few decades (just look at BLS data: the lowest 50% of American earners saw no rise in real wages from mid 1970s until 2015), bosses and corporations have more power than ever. Oppression and control can come from institutions other than the state. Of course, states under capitalism are often just as oppressive as those under communism (see: all fascist regimes ever).

    4) Many gains attributed to capitalism have actually from workers fighting and dying and striking. For example, 8-hour workday in the US came after the Ludlow massacre in Colorado. Mass mobilization by workers, in the streets and in the barricades, have forced capitalists to come to the bargaining table and compromise. In modern times that’s been largely lost and we are living through a period of global inequality, accumulation, and corruption with few equals in human history.

    I could go on, but I understand people here have already drunk their Kool Aid. Just thought it’d be fun to share a different perspective.

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    1. Thanks for you comment (though I don’t appreciate your smugness). 1) None of this refutes my point, which is that no other political or economic system can hold a candle to Western-style democratic capitalism in terms of human freedom, progress, and prosperity, least of all communism. I never said that capitalist countries can do no wrong. As for the Nazis: Hilter, whose rhetoric was steeped in anticapitalist tropes, pursued a collectivist, i.e., national socialist, economic policy, complete with a Four-Year Plan, expropriations, and centralized state control of the means of production. (Read Günther Reimann’s The Vampire Economy: Doing Business Under Fascism.) In short, the problem with the Third Reich was certainly not that it was too liberal, economically speaking. To suggest that it was is cynical. As for slavery: Slavery has always existed, virtually everywhere, and the capitalist West put an end to it. (See Thomas Sowell, Misconceptions About Slavery https://www.youtube.com/watch?v=V7gN2EYbtgM) 2) I largely agree. However, population explosions are not a sign of prosperity as they tend to happen in poor, underdeveloped countries. Rising prosperity is actually linked with LOWER birth rates. As regards Mao’s “achievements”, “In 1976, Mao single-handedly and dramatically changed the direction of global poverty with one simple act: he died,” as International Development economist Steven Radelet put it. 3) See point 2; “states under capitalism are often just as oppressive as those under communism” – are you serious? 4) It’s almost like we don’t live in a perfect world. “we are living through a period of global inequality, accumulation, and corruption with few equals in human history”-again, are you serious? (Check out humanprogress.org, ourworldindata.org, and weforum.org and read Steven Pinker’s new book Enlightenment Now). I appreciate a different perspective, but unfortunately many of your claims are counterfactual.

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      1. Capitalism does not produce freedom and progress. It produces plutocracy and tyranny. If your idea of progress is capital accumulation for corrupt billionaires while millions struggle to get by every day, then you need to redefine the priorities of your economic theory.

        Hitler made a strategic alliance with big business from the start and used it to wipe out labor unions and socialist parties. So what that he was committed to central planning? Capitalism could not survive without central planning. What do you think central banks do when they flood an economy with money through “quantitative easing” in hopes of boosting lending and investing? Or when governments spend billions on weapons of war to pad the profits of corrupt corporations? I got a news flash for you: monetary and fiscal policy are the definition of central planning.

        Capitalism did not put an end to slavery. It merely exchanged it for other forms of labor oppression. For example, after the British “abolished” slavery in the 19th century they abducted and transported tens of thousands of Asian workers to the New World. These workers picked up guano (literally birdshit) so the British could use it as fertilizer back home (because they had destroyed their soil quality through intensive agriculture). The 12 million undocumented workers in the US are the new cheap and exploitable labor of American capital. The cycle continues, just in different forms. And in case you haven’t heard, de facto slavery is reality for tens of millions of people around the world, many of whom are trafficked across national borders.

        Chinese GDP under Mao actually increased substantially. Western propaganda, of the kind you’re exhibiting here, is totally unaware of this, because it seems inconceivable to acknowledge that Mao, one of the greatest figures of the modern age, did anything remotely good.

        Yes I am serious. Capitalism is built on war, repression, control, and genocide. Learn about something called history. The West “earned” much of its wealth from liquidating and expropriating the rest of the world. That process continues to this day through global value chains and other forms of imperialist pressure. The rise of China will not stop this process as China itself is becoming a capitalist behemoth intent on world domination. But it will dent the superiority of the West and, one hopes, the kind of mindless propaganda that you seem to thoroughly enjoy.

        1. On Mao and growth:

          “The Chinese economy in 1952-1978 grew rather rapidly, with a 3.6 percent average rate of growth of real GDP per capita.” (See “The Economy of the People’s Republic of China from 1953” (2015) by Cheremukhin et al).

          One wonders how many trolls in the Western media are even conceptually aware of stuff like this. Forget about the specific numbers. How many know that China’s economy grew under Mao? That the Soviet economy grew under Stalin?

          Most of the capitalist garbage you see online nowadays (like this article) are completely ignorant of history and facts. Instead they dabble in creative propaganda designed to protect a corrupt plutocracy.

          The world can do better than capitalism.

  4. “Given limited natural resources, capitalist economic growth has been attacked as inherently unsustainable.” I have found a lot of inspiration in this thought when I was younger and idealist. Now I think economic growth doesn’t require more of natural resources, or not necessarily. Unfortunately, service-sector still has a bad reputation and economic usefulness is linked to production of material goods – even by anticapitalists.

  5. “Nobody is worse off because of economic inequality”.

    Whilst I’m in broad agreement with the article this sentence is patently nonsense, and you don’t need to believe in manufacturing equality of outcome to see it.
    Societies with extreme levels of inequality are often extremely unstable, and have manifest injustices in other areas. There’s a point at which inequality has a direct impact on the functioning of society in a wider sense than mere economics.
    It’s also the case that it may have a direct impact on people’s abilities to lead meaningful lives in the societies they live in, and to partake and contribute to their communities. This can’t always just be reduced to mere income levels. It’s some Amartya Sen (drawing on Adam Smith) has often touched on.

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    1. Hi, I agree that the sentence, taken out of context, appears to ignore the destabilizing effects of extreme levels of inequality, such as the inequality between the political elite and everybody else in totalitarian socialist states. However, it should be clear from the context that the sentence refers to the widespread belief that inequality, in and of itself, is a sufficient indicator of pauperization.

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  6. The fallacy of “redistribution” can be seen clearly by examining every case of a socialist or despotic country dealing with their oil when they have it. As soon as the government takes over the oil business (Mexico, Venezuela, Iran) the oil output begins to fall because it requires continuous investment. It is not simply a pot of money to be grabbed. It was capitalist innovation that gave us the current US oil boom.

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    1. This is pure nonsense, an exemplary case of capitalist propaganda run amok. One can easily falsify this ridiculous claim by looking at the West (Norway’s government owns Equinor) and the East (China owns Sinopec, one of the giants in the global oil industry).

      Are you aware that communist societies reached very advanced stages of technological innovation and scientific progress? Have you heard of this thing called Sputnik? Do you know of physicists like Landau, Basov, and Ginzburg?

      Maybe if you’re not aware of these things, you should educate yourself a little bit more, before parroting the banal talking points of the corrupt plutocracy to which you remain enslaved.

  7. When I realized that my job was not going to ever pay me enough to cover my kid’s college costs, I started a business on the side. That is capitalism. Those opposing capitalism do not seem to realize that their friends/relatives or even themselves who are consultants, run a small business, or have a law practice or write books are all capitalists. They take risks, make investments, have to make a profit.
    As a teen one day you wake up and realize that reality is not going to take care of you like your parents did. And you notice that somehow some people are rich. It seems cruel, unfair, unjust and so hard. So you just want to burn it down. But you don’t see that the ice cream shop you stop at is a small business established by a guy with initiative in order to take care of his family. He took a risk in order to make a profit. You don’t see how hard those rich people worked. The system that enables people to get ahead is in fact capitalism. I have a friend who came here as a legal immigrant refugee with $5 in his pocket, became a dentist and is doing well. He is a fierce patriot. Calls this the best country in the world.

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