12 October 2008

2. Essential Elements

ESSENTIAL ELEMENTS OF CAPITALISM: (My Interpretation)

A true capitalist society is any laissez-faire free-market oriented social-political system that is defended and protected by a proper, objectively established, constitutionally-limited, representational government. A capitalist society is any social-political system that is established under the following rational - meaning moral - principles and practices of:

(a) Individual freedom and liberty, with the recognition, preservation, defense, and protection of individual rights, including property rights, and all associated derivative freedoms (such as the freedom of speech, the freedom of the press, the freedom of religion, or the freedom from religion); an individual’s life (man or woman) belongs to themselves, and only to themselves – not to the state (government or ruling group);
(b) private ownership of all property, both personal and business, physical and intellectual; this includes an individual’s physical body and mind;
(c) a laissez-faire free-market economy, meaning an economy of complete economic freedom for all individuals and businesses, completely unregulated open trade and commerce (including such things as medicine, education, and transportation), with unregulated, free banking systems based on a gold standard, for all individuals and businesses, both domestic and international – meaning an economy that is completely unregulated with no control or infringement upon by the government in any manner whatsoever, including no state (government, ruling group, or federally controlled) central banking system or reserve;
(d) the objective rule of law;
(e) a proper, objectively established, constitutionally-limited government, who’s only purpose is to protect man's rights, meaning to protect man from physical violence (Ayn Rand). In this manner, a proper government is limited to its only proper three functions:
- (1) a proper military to defend and protect against the initiation of physical force and/or invation by foreign nations or groups,
- (2) a proper police and law enforcement system established to defend and protect the individual and his property against the initiation of force and any physical violence by criminals,
- (3) an objective justice system (courts) established to defend and protect individual rights, property rights, and all associated derivative freedoms, to uphold contracts against breach or fraud by others, and to settle disputes using a properly established rational and objective code of rules and laws (Ayn Rand); and to apply and enforce such objectively defined and established rules and laws.

As Ayn Rand states, the only proper purpose and function of a government is to recognize and protect the rights of man, and in doing so, the government holds the monopoly on the use of physical force, and under Capitalism, it must be a legal monopoly, not arbitrary and lawless. In order to recognize and protect the rights of man, the government’s legal use of force must be controlled and limited by “objectively” defined rules and laws designed to recognize, preserve, defend, and protect individual rights, including property rights. Only a social-political system of Capitalism can offer such a government, and only can individual and economic freedom, individual rights, including property rights, survive under such an objectively established, constitutionally-limited government.

Under a true, proper laissez-faire capitalistic social-political system, the constitutionally-limited government, any individual, citizen, or any business cannot use the government to develop, design, pass, establish, legalize, mandate, and/or force any policies, legislation, laws, regulations, or mandates that interfere with, infringe upon, limit, prohibit, dictate, regulate, mandate, violate, or control, in any way, individual and economic freedom, individual rights, property rights, and derivative freedoms, including any and all forms of commerce and business, and its associated practices and activities.

A word regarding Special Interest Groups under Capitalism:

Special Interest Groups (political, public, private, or business), including their Lobbyists, that cater to using government favors, coercive force, and manipulation to promote and force their agenda, policies, programs, and demands onto, and against, businesses and the citizenry – as well as those individuals, groups, and businesses that also compete for and benefit from government favors, manipulation, welfare, subsidies, and funds for their own activities, including controlling, manipulating, or forcing out business competition - would not exist under true Capitalism. WHY? Because, basically they would be useless. Under true Capitalism, there are no government programs, monies, or funds available for any type of welfare or subsidies (either individual or business, public or private), as there is no forced taxation or fees (redistribution of wealth), of any kind, by the constitutionally-limited government, while all legitimate government funds are directed ONLY towards the government’s proper functions of recognizing and protecting individual and economic freedom, individual rights, property rights, derivative freedoms, and all unregulated commerce and economic activities - AND because coercive government force cannot be used to interfere with, infringe upon, limit, prohibit, dictate, regulate, mandate, violate, or control individual rights, property rights, derivative freedoms, and including any and all forms of commerce, business, and banking, with all associated practices and activities.

Under true Capitalism, perhaps the only type of Special Interest Groups that might exist could be groups that petition the government to keep a vigilant watch of any legitimate violations or infringements upon individual rights, property rights, derivative freedoms, or against unregulated commerce and business.

For a full discussion and exact text by Ayn Rand regarding the nature of government, refer to her book The Virtue of Selfishness, Chapter 14, “The Nature of Government,” pb, pp. 107-115 (Signet, ~1980).

An Important Note:

From my studies and interpretations thus far in understanding Capitalism, I have concluded that a proper, rational, and clear understanding of the concept of freedom, and its rational application, is so fundamentally important and necessary in establishing, and preserving, a society of Capitalism, and that the rational concept of freedom underlies, fundamentally, all of what I have just listed above as the essential elements of Capitalism. I was first introduced to this idea of the rational application of freedom through the writings of Dr. George Reisman, from both his pamphlet essay Freedom and from his book Capitalism: A Treatise on Economics. In Dr. Reisman’s essay Freedom, he introduces and discusses the Rational Concept of Freedom versus the Anarchic Concept of Freedom, and what both approaches represent.

Item No. 3 below includes my own discussion regarding the Rational Concept of Freedom versus the Anarchic Concept of Freedom in relation to my own comparison of Capitalism versus Statism. I included such a discussion because I think, again, freedom is so very fundamentally important a concept in understanding the requirements of establishing and preserving a capitalist society and economic system.

The discussion about freedom that follows, in Item No. 3 below, is my own interpretation and commentary from a layman’s perspective – and only that - and though I do make many references to Dr. Reisman’s works in my writings to help guide my thoughts, I strongly recommend reading Dr. Reisman’s book Capitalism and his pamphlet essay Freedom directly and thoroughly – including also any references to Ayn Rand’s writings – for one’s own understanding of the concept of freedom.

VERSUS -

ESSENTIAL ELEMENTS OF STATISM: (My Interpretation)

A statist system is any and all types of social-political systems, governments, and/or ruling group-systems (see Item No. 10 below for list) that are established under the following irrational - meaning immoral - principles and principles of:

(a) an individual’s life unquestionably belongs to the state (government or ruling group), usually maintained under the threat of physical force, terror, property confiscation, imprisonment, and/or death by the state (government or ruling group), such as “pay your taxes or go to prison” – control of individual and economic freedom through government control and enslavement (slavery) – limited or no liberty, individual rights, including property rights, or derivative freedoms; collective slavery; institutionalized slavery; selective government sanctioned discrimination;
(b) partial-to-total state (governmental) interference, infringement, limitation, restriction, regulation, and control of all property, personal and business, physical and intellectual. If private property does exist, or is allowed to exist, under a statist system, it is usually heavily controlled, regulated, and taxed;
(c) partial-to-total state (governmental) interference, limitation, regulation, mandating, and control of a country’s economic system (meaning any and/or all commerce, business, and banking activity and applications);
(d) the arbitrary rule of men, and/or the mob; legislation and laws established to keep the ruling government, group, or gang - religious or secular - in power and control;
(e) a corrupt justice system (courts), established to enforce arbitrary, coercive, corrupt, and immoral legislation and laws that infringe upon, violate, and control the individual’s life, liberty, rights, and property, including any and/or all associated business and economic freedom, activity, and property, again to keep the ruling government, group, or gang - religious or secular - in power and control;
(f) a corrupt military and police (law enforcement) system established and used to keep the citizenry and economy controlled and enslaved, including infringing upon and violating individual rights and property through physical force and violence, intimidation and terror, imprisonment and even murder if necessary; such a military is also often used to invade other countries, spreading war and imperialism.

Ayn Rand points out that Statism, or collectivism, is the political application of the philosophy of altruism, or the philosophy of self-sacrifice. Statism is based on the negative premise that both man’s life and his work belong only to the state (the government or ruling group), and that, because of this, the state may use and discard man (the individual human being) in any manner it so wishes, for whatever reason and purpose it so chooses, for its “own tribal, collective good” (Ayn Rand).

For the full discussion and exact text on this point, see Ayn Rand’s newsletter The Objectivist Newsletter, 1962, from her essay “Introducing Objectivism,” p. 35.

Further, as I understand Ayn Rand’s writings, a statist government infringes upon and violates the freedom and the rights of man in any manner for whatever purpose, through the principle that, under Statism, the government holds a corrupt, arbitrary, and coercive monopoly on the use of physical force, ruling by brutal force when necessary. Under Statism, the government – or any ruling group - has unlimited and uncontrolled coercive force, power and control over the citizenry and economy.

It is my view that the reason a statist government must hold a corrupt, arbitrary, and coercive monopoly on the use of physical force against its citizenry, is because under Statism the government is established based on the fundamental premise that man’s life belongs to the state (government or ruling group), and that the state (government or ruling group) must use such force to maintain its power and control over its “ownership” of the citizenry and economy.

I think that most individual human beings desire to live freely as individuals with economic freedom, meaning Capitalism. However, if one does not want, or does not like, Capitalism as a social-political system, then the only other alternative for a social-political system to live under is some form of Statism, meaning some form of political force and tyranny – or at best, some mismatched spectacle of a mixed-economy. And, the only way to establish some form of Statism is through the use of corrupt, arbitrary, and coercive government force, as it is the only way to control and have power over the citizenry and economy – and to preserve the fundamental statist premise that man’s life belongs to the state (government or ruling group).

Again, the only two social-political alternatives that exist for mankind is to live and associate freely, voluntarily, and peacefully with each other under Capitalism with Freedom, or live in collective slavery, misery, and tyranny under Statism with Force.

For a full discussion on the nature of Statism, see these Ayn Rand essays from her book Capitalism: The Unknown Ideal -
- “The Roots of War” – Chapter 2
- “America’s Persecuted Minority: Big Business” – Chapter 3
- “Let Us Alone!” – Chapter 13
- “Conservatism: An Obituary” – Chapter 19
including Ayn Rand’s article “War and Peace,” The Objectivist Newsletter, Oct. 1962, p. 44.

A word regarding Special Interest Groups under Statism:

Special Interest Groups (political, public, private, or business), including their Lobbyists, that cater to using government favors, coercive force, and manipulation to promote and force their agenda, policies, programs, and demands onto, and against, businesses and the citizenry - as well as those groups and businesses that compete for and benefit from government favors, welfare, subsidies, and funds for their own activities, including controlling, manipulating, or forcing out business competition – increase and flourish under Statism, especially in mixed-economies, such as the current United States of America. WHY? Because, under Statism, there is essentially an unlimited source and supply of government monies and funds available for any and all types of welfare or subsidies or programs (for both individual or business, both public and private) due to government forced taxation and fees onto all the citizenry and economy, including even the deliberate confiscation of private property and wealth of innocent individuals and businesses – with this corrupt and coercive government action actually encouraged and supported by the same Special Interest Groups that compete for, and benefit from, coercive government force, including government taxation, favors, manipulation, welfare, subsidies, monies, and funds.

In my opinion, Special Interest Groups (political, public, private, or business), including their Lobbyists, that cater to using coercive government force, favors, and manipulation to promote and force their agenda, policies, programs, and demands onto, and against, businesses and the citizenry, as well as those groups and businesses that compete for and benefit from government favors, welfare, subsidies, and funds for their own activities, including controlling, manipulating, or forcing out business competition, are all statist-oriented groups, or become statist-oriented groups, as Statism grows and spreads throughout a society.