The Free Market 13, no. 10 (October 1995)
From Left and Right, capitalism is condemned for all the cultural failings of the modern world—everything from mindless TV to dirty books to slatternly art to trashy movies to debasing music. It’s an extension of the liberal habit of blaming a system for what are actually the failings of individuals.
Ludwig von Mises identified Victorian art critic John Ruskin as the intellectual source of this ceaseless griping. Ruskin saw civilization, embodied in the arts, as going down the tubes, and he labeled the market economy as the cause. This allowed him to be a socialist without surrendering upper-class affectations or having to prattle about workers and peasants.
Ruskin thus qualifies, said Mises, as “one of the gravediggers of British freedom, civilization and prosperity.” “A wretched character in his private no less than in his public life,” Ruskin eulogized the ancient producer cartels called guilds. “Government and cooperation are in all things the laws of life,” wrote Ruskin in Unto This Last (1862), “anarchy and competition the laws of death.”
Nowadays, practically everyone with a college degree is a tacit Ruskinian. Americans may understand the productive power of the market, but many are blind to its virtue as a civilizing agent, to its ability to sustain tradition, create what’s beautiful and grand, and preserve what’s right and good.
The Left (still essentially Marxian) wants us to think of capitalism as modern and industrial. More correctly, capitalism is just a name for the social recognition of private property, trade, and contract enforcement. It was as much a part of ancient Athens as 19th-century America. In its total absence, civilization would crumble, and the arts vanish.
In modern times, the confusion usually starts this way. Someone flips on the television to find the usual rotten show and offensive commercials. He concludes that’s the market at work: base, vulgar, and insulting to our intelligence.
Once on this track, the anti-capitalist mentality runs wild. The decadence of the cash nexus appears everywhere. Strip malls and yellow M’s in the sky. Boxing, moshing, tabloids, rap, and low pay for intellectuals. It’s all horrible, sniffs this person, and it’s all capitalism’s fault.
If this theory were correct, the prophets, saints, and ancient philosophers were wasting their breath. They called on people to abandon sin and adopt virtue, when they could have taken the fast-track to social salvation by condemning free exchange and private property.
What the great moralists knew, and we’ve forgotten, is that people and cultures are products of human choice. Good lives can flourish in any social setting, whether the prison camp, the Wild West, or Washington, D.C. (hard as the latter is to believe).
Sin and stupidity will, of course, always be with us. From an economic perspective, our goal should be to make sure that sinners pay for their sins, and that minimal resources are used to cater to them. In this process, capitalism is our ally. In addition to making prosperity possible, the whole point of economics and markets is to make sure the minimum amount of resources is used to satisfy any particular demand of any particular group.
The free economy is efficient because it deals with tastes and preferences as a given, it organizes resources in an economically practical way, and it arranges for the consumer to get what he wants at the least possible cost to everyone else.
The junk on television may indeed speak volumes about our culture. People should care about more important things. Thanks to capitalism, however, society isn’t wasting excess resources on it. Trash is delivered in the least costly manner, leaving more resources for the pursuit of what really matters.
Entrepreneurs have learned to provide services to even the smallest niche. When I see television, and I don’t very often, the most intelligent network is EWTN. It features 50-part lectures by learned academics on subjects like Scholasticism.
This is a profitable enterprise that would be considered wasteful in a socialist country—not to mention politically incorrect. In a less prosperous society, it couldn’t survive. Yet I can’t remember anyone crediting capitalism for making St. Thomas Aquinas accessible to the masses.
It used to be said that government had to fund the arts for them to be of good quality. That argument no longer flies. Take a look at the malevolent and stupid creations of the National Endowment for Arts. The government’s “sculptures,” “architecture,” and “music” has littered the country with rubbish.
Economists say that the market “internalizes externalities.” This means, in part, that people who are offended by some goods and services can structure their lives to avoid exposure. That’s mostly true, especially in the case of sleazy television and movies, pornography, and weird services like telephone sex. Thanks to capitalism—which restricts such services to the people who purchase them—the rest of us don’t have to be affected.
A shop selling Satanic trinkets recently opened up in Auburn, Alabama. “Anything for a buck,” people sneered, until the store went belly-up for lack of business. It’s true that some people willdo anything for a buck, but in a market economy, they have to be subservient to the consuming public.
The market delivers plenty of similar good news, though most of it goes unremarked. Let’s consider the case of big cities, which the productive public has been clawing its way out of for decades.
The government has done everything in its power to make cities uninhabitable by regular people. Government welfare has fostered a whole class of citizens that is at once indolent and criminal. Public housing and rental subsidies have destroyed settings that were once middle-class. Many cities today are only “cultural” centers if you like freaks and muggers.
Yet, thanks to capitalism, there is hope. Private individuals and developers take buildings that appear beyond repair and revive them. House by house, block by block, whole sections of cities have been gentrified. It’s not charity work. Without a system of profit and loss, it wouldn’t happen.
Yet you can’t satisfy those with an anti-capitalist mentality. They invariably complain that gentrification raises property values and “squeezes” out the poor, while forgetting to notice how much better off everyone is when degraded resources are made more valuable.
Beach housing has long been a magnet for cultural complaints against capitalism. High-rise buildings were routinely called evil for destroying the view from a mile away. Yet it is this type of structure which makes beach-living possible for the masses in the first place.
Some architects, in revulsion against beach high rises, have worked with investors to buy miles of property on the beach. Then they create communities with quaint houses and shops. The result is magnificent, and entirely private, if affordable only for a few.
These architects think they’re repudiating the tackiness of capitalism. They fail to realize that their private, planned communities are as much a part of capitalism as the high rises. Far from making a left-wing ideological point, they are catering to different tastes, marketing a product, and vastly increasing the value of property as a result. High rises and private communities represent capitalism at work.
Yet what about the materialism of capitalism? This too is a misnomer. Strictly speaking, capitalism is not about material goods; it’s about exchangeable goods. Leisure, love, beauty, and art are all exchangeable, and as much a part of economic life as Big Macs and Seinfeld.
It’s said that markets bring about short-term thinking. Quite the contrary. Markets often focus on the extreme long-term, in ways the government can never do. Consider the wine industry. It can take decades before a vineyard produces a really great bottle of wine. Even common table wines require that entrepreneurs plan many years in advance. The more forward-looking the capitalist, the more he can be rewarded for setting aside temporary pleasures.
Every good and service has a timetable, and the entrepreneur must plan in the most cost-effective manner. It’s bureaucratic man—not the mythical economic man—who is prone to consumption and immediate gratification. And the more the state intervenes in an economy, the more it penalizes long-term thinking and rewards short-termism. Inflation is the most obvious example.
But hasn’t the capitalist mentality forced everyone in the family to work sixty hours per week, just to keep up with material desires? In fact, it’s the government that has brought it about. A conspiracy against sound money and private property is what drove wives and mothers into the workforce in the 1970s and 1980s. A return to unfettered capitalism would allow those who desired it to return home, so that we could restore family and community life. Both thrived under laissez-faire.
As Schumpeter noted, every socialist is an enemy of the bourgeois values of home, family, community, property, honesty, diligence, and hard work. The more socialist our economy becomes, the more vice displaces virtue in public and private life.
As for the culturally uplifting aspects of capitalism, the profit and loss system makes possible—to take just a few examples—our economy’s amazing bounty of recorded classical music, the greatest cabernets in the world, an abundance of culinary treats even kings couldn’t imagine two centuries ago, and some good movies. If that doesn’t convince, consider that it’s under capitalism that the Bible became the all-time best-selling book.
