Why You Shouldn’t Call Yourself a "Capitalist"

The –ism in question has many different connotations; to most, it can mean in a very general sense “how America works,” and it is usually thought of as being opposed to other –isms: “socialism” or “communism” for example. For many on the political left, the term conveys ideas of exploitation, the antithesis of “The Revolution.” It is synonymous with “the rat race” — a phrase that exploded in popularity after World War II. For right-wingers, they may think of the “free market” (a term which has been used alongside “capitalism” for centuries but was usually less popular), Adam Smith’s “invisible hand,” and “free trade.” Like progressives, conservatives and libertarians often think that capitalism stands in opposition to government control of the market, and they may even pride themselves on such opposition. 

I put all these terms in quotations because they are often repeated without any understanding of what they refer to. When we take a closer look at them, we see that what people often think they mean does not correspond to reality. While capitalism is indeed how America works, it should not be thought of as being an opposite style of the centralized economy of the Soviet Union, for example. In fact, the progressives are right in that “capitalism” has led to subtle, masked, mass exploitation and hindrance of freedom. Many have picked up on this, but mostly only those on the left. A Gallup poll in August of 2018 found that “Democrats have a more positive view of socialism than they do capitalism… with 57% today having a positive view”. The same poll found that 71% of those who lean Right had a favorable view of capitalism while 16% had a favorable view of socialism. Both parties surveyed here are wrong, and they have fallen into the trap of seeing the two –isms as opposites. 

On the one hand, it is interesting and confounding to see that many so-called Republicans have a favorable view of socialism, but they may have a point. They say, “look where capitalism has gotten us,” by which they mean demonstrating the issues of wealth inequality and what they think can be better described as “corporatism.” This view is that the government allows certain industries to be controlled by a few companies which work hand-in-hand with officials. There are too many examples of control and exploitation brought by “capitalism” to list in a library, let alone in an article. But, think of the fact that there are only a few cell-phone coverage providers that set the industry standard price for their services and that on average, “American cell phone service is among the most costly in the world.” Additionally, the companies that run the ACT and SAT have similarly set the price to control the barriers of entry into higher education. The government allows these corporations to maintain their stranglehold over these markets because it benefits the government. Conservatives often point to another example: Amazon kicking the free speech platform Parler off its servers. This underscores the fundamental reason governments grant control over certain industries to a select few: it benefits them. The only reason Parler was allowed to be taken offline was that it helped elected Democrats. It allowed them to blame the app for the occupation of the Capitol on January 6th. When confronted with these monopolistic tendencies, the left says they are the result of capitalism, while the right is left with a measly defense that sounds like “that’s not real capitalism.” 

On the other side, Democrats also complain about capitalism, but they ignore monopolistic corporations and target wealthy individuals for “not paying their fair share.” They ignore the massive corporations that fund their campaigns. Examples abound, but take these two as symbolic of the left’s relationship with “Big Tech”: Google’s parent company gave $3.66 million to then-candidate Joe Biden in the 2020 election cycle and $1 million to self-proclaimed socialist Senator Bernie Sanders’ campaign. 

One difference between the Left and Right’s views on capitalism is that progressives have a more challenging time justifying their murderous history (but do not fret, that was not real communism). At the same time, capitalists can claim they are responsible for the current “great enrichment” and unbelievably high standard of living we enjoy today compared to our ancestors. Despite the growth in standard of living, the data from the Gallup poll reflects that it has grown more difficult to call yourself a capitalist nowadays, especially after the 2008 financial crash and the ensuing 99% protests.

Furthermore, there is not some Clintonian “Third Way” about this. Those who feign political moderation may say that they see serious problems with both capitalism and socialism, but they are framing the issue wrong. The framing of capitalism versus socialism and each having its problems are part of the trap. 

How is “capitalism” a trap? I’ll give you an example. The term “capitalism” in its modern usage can be applied to the economy of China, which the Chinese Communist Party runs. The rulers of China have figured out that so long as they allow their people a modicum of wealth and entrepreneurship, they can retain control of most of their behaviors. This is not capitalism, this is slavery, and capitalism is the tool China uses to suppress any uprisings.  

The same is true of the United States Government. Both Republicans and Democrats have elected officials that have spent so much money that according to the New York Times, “The national debt now stands at $28.43 trillion, according to the Peter G. Peterson Foundation’s live tracker… [t]o offer some perspective on the scale of such a shortfall, the entire U.S. gross domestic product was $20.93 trillion last year.” What are we to make of this spending? It appears that so long as the government is sending out checks, people will ignore the fact that it will take generations to pay back the debt we took out to write the checks in the first place. We will also ignore the fact that the same elected officials have access to market-changing information in advance, and their salaries are more than double the average Americans’ ($51,916.27 versus $174,000 a year). 

In addition to those problems, a more existential threat is the mere existence of central banks and global organizations aimed at “international economic cooperation.” These entities, like the Federal Reserve and European Central Bank, control the world’s interest rates and money supply, resulting in the insane amount of spending discussed previously. Instead of your local banker responding to immediate market conditions, he must give you a loan based on the broad goals set by people in a different part of the world who have a vested interest in maintaining their power over you. 

From all this, we can see that capitalism, like other –isms, allows power to flow to the “ruling class” at the expense of the “citizen,” words that today can be better defined as tax farmers and livestock, respectively. This is the trap, and we should have seen it coming. As Michael Knowles writes in his book Speechless, “economics-obsessed conservatives throughout the United States and Britain became reflexive defenders of big business, free trade at all costs, and ‘capitalism’ – a term popularized by Karl Marx” (163-4). Knowles cites a 2013 article in Forbes called by Alejandro Chafue that says, “Although Karl Marx did not create the word, it was after his work ‘Das Kapital’ (1867) when the term ‘capitalism’ began to be widely used to describe an economic system based on private property as the means of production. Marx remains the great labeler: ‘capital,’ ‘the capitalist,’ and ‘the capitalist system of production’ appear repeatedly in his writings.” This article wrestles with the question of what to do with the term we have been discussing. Should we abandon it or change what we mean when we say it?

I propose the abandonment, but not censorship, of the term. There is no need to redefine the term that Marx popularized. Marx’s criticisms, in my view, were indeed accurately describing a system in which the government allows some materialist freedom but maintains a tight hold on real power. Marx saw this issue arise when the English government allowed a virtual monopoly on private land and manufacturing in the 19th century. In the Communist Manifesto, Marx said, “You are horrified at our intending to do away with private property. But in your existing society, private property is already done away with for nine-tenths of the population; its existence for the few is solely due to its non-existence in the hands of those nine-tenths” (Chapter II page 23).  Marx has a point about land control, but he exaggerated it. As Bloomberg reports, “The 100 largest private landowners in the U.S. own 40 million acres — an area the size of Florida”. This pales in comparison to the fact that “The federal government owns around 640 million acres of land (about 28%) of the 2.27 billion acres of land in the United States.” The effect of this is that the executive branch, often one single person, can disrupt interstate and international commerce with a flick of a pen. President Biden did this on his first day in office when he canceled the keystone pipeline and cut thousands of projected jobs.

Who cares about land? The Founding Fathers and the first state governments did. James Madison wrote, “The right of suffrage is a fundamental Article in Republican Constitutions. The regulation of it is, at the same time, a task of peculiar delicacy. Allow the right [to vote] exclusively to property [owners], and the rights of persons may be oppressed… Extend it equally to all, and the rights of property [owners]… may be overruled by a majority without property.” Madison points out that land is often the foundation of wealth, and controlling it gives one power. The Chinese Communist Party (CCP) picked up on this as well. In 2007, the CCP passed an all-encompassing law that was “enacted in accordance with the Constitution for the purpose of upholding the basic economic system of the State, maintaining the order of the socialist market economy.” This legislation has a caveat in section 117 so that some may be allowed to make profits from their properties. Chinese landlords must be very grateful to their communist rulers for allowing some profit-taking. Such legislation exists in the United States as well. In addition to control over land, the government has a say in how much tax-free money you can get in retirement. The government takes its share of your family’s estate when someone dies and can even cancel the debts of a select few.

This list of government overreach in the market is not a vindication of Marx. As Thomas Sowell notes, Marx never set foot in a factory, never participated in the free market, and ultimately failed to account for intellectual capital in his writings (see Sowell’s Marxism). Instead, Marxism demonstrates the many parallels between how the United States and CCP control its people. Both do so in the name of capitalism. China and the United States are just on a different part of the spectrum of totalitarianism. Therefore, we ought to abandon the term and refer instead to something that has existed before Marx: competition.

Competition in an economic sense refers to the notion that all may participate without arbitrary intervention from a forceful agent. In this sense, economic competition is the most democratic system ever designed (see Dr. Robert Murphy). This creates freedom. Unlike capitalism, freedom is binary; either you have it, or you don’t. I am not advocating for the nonsensical notion of anarcho-capitalism. Instead, I am advocating for the appreciation and institutional support of self-interest. This is Adam Smith’s “invisible hand.” In a post-Marx context, many reject this notion outright. However, the invisible hand can be the very visible force of government in a few key ways: governments ought to coin money, have a monopoly on violence, and restrict the predatory acts of economic actors (such as those of Big Tech as discussed earlier). 

I do not believe in capitalism because it is a trap set by powerful people with a totalitarian point of view. If we are to be free from the capitalist trap, we must reject Marx’s –isms and reject much of the current government control over our economic decisions. We must not be tempted by a little bit of cheese given to us by our rulers to keep us content. We must be precise when we speak and advocate for rationally based economic competition. 

This article was inspired by Michael Knowles’s book Speechless: controlling words, controlling minds.