Editor’s note: This article is taken from managing editor Keith Knight’s opening statement for a recent ZeroHedge debate.
To clarify, when I say communism, I’m referring to the abolition of private property and voluntary contracts.
Socialism is most accurately described as the institutionalized aggression against private property and voluntary exchanges.
Capitalism is the social system based on the explicit right to private property and voluntary contracts between consenting adults.
In advocating capitalism, I’m simply affirming the truism that human beings are self interested.
This is why we are devastated when someone close to us dies, but have trouble getting worked up over the 100,000 deaths that took place during the Franco Prussian war.
Human beings do stop being self interested just because they are elected to public office, or because they enter a voting booth.
The key difference between capitalism and socialism is the constraints faced by self interested actors.
Under a system of private property and voluntary exchange, no one can get a penny out of your pocket or a second of your time unless you voluntarily agree to it.
This—freedom of association and dissociation—is the ultimate check and balance against the inevitable self interest and greed all human societies operate within.
Politicians and state employees are not unpaid volunteers, or people who only demand to be paid the bare minimum in order to survive—they too are self interested people.
Socialism allows greedy people to take property without consent—or without creating any value in exchange—through taxing money other people have acquired voluntarily.
This vitally important check and balance—the freedom of association—is also critical to raising living standards.
If you don’t value a product or service I create, you have no obligation to allocate your scarce time or money to my endeavor.
If you want a society where the least well off people have the most opportunities, you would want a system which gives those very people the most amount of opportunities to trade and contract with other people in order to raise their living standards.
Far from just being theoretical, capitalist enterprises such as Amazon and Walmart have given more people access to low cost products and services than our ancestors ever could have imagined.
Companies like Apple have succeeded, not because they make products only billionaires can afford, but because they make computers the average person can afford.
Henry Ford did not invent the automobile, but in channeling his self interest to meet consumer demand, he made the Model T car affordable to the average worker.
Cornelious Vanderbilit lowered the cost of steamship travel from $7 to 6 cents primarily though capital investment—because he wanted to profit by creating something many people valued.
Andrew Carnegie lowered the cost of steel from $56 a ton to $11.50 a ton in twenty-seven years by experimenting and investing in efficient production methods which everyone else in society benefited from by having an increased access to goods which steel was used to make.
Grok (Twitter’s Artificial intelligence), Wikipedia, Zoom, YouTube, the Khan Academy, and Internet Archive all provide more “free” access to education than any socialist program any government has ever produced.
On a larger scale we see the same result. In dividing up the Korean peninsula we see that the Koreans with more freedom to exchange have higher living standards for the average person; just as we saw West Germans have a higher living standard than East Germans. Just as we saw the drastic increase in the growth of China when Den Xo Ping allowed more people to voluntary trade and contract in the late 1970s.
Capitalism harmonizes the self interest among human beings not only resulting in higher living standards, but is the only moral system since it rejects the socialist double standard where some people have a right to initiate violence and others do not.
