Why people hate capitalism.
If you want to know why so many people hate capitalism when the capitalist system of economic management has allowed humanity to raise it’s standard of living by leaps and bounds since it was first implemented read The Anti-Capitalistic Mentality by Ludwig von Mises.[1]
von Mises was an influential Austrian economist of the 20th century who emigrated to the United States in 1940.[2]
In this book he argues that people hate capitalism because deep down they know capitalism has given them the opportunity to be as successful as they desire (who’s stopping you from starting the next Google?) but they either didn’t or couldn’t make it happen.
“What makes people feel unhappy under capitalism is the fact that capitalism grants to each the opportunity to attain the most desirable positions which, of course, can only be attained by a few. Whatever a man may have gained for himself, it is mostly a mere fraction of what his ambition has impelled him to win. There are always before his eyes people who have succeeded where he has failed. There are fellows who have outstripped him and against whom he nurtures, in his subconsciousness, inferiority complexes. Such is the attitude of the tramp against the man with a regular job, the factory hand against the foreman, the executive against the vice-president, the vice-president against the company’s president, the man who is worth three hundred thousand dollars against the millionaire and so on. Everybody’s self-reliance and moral equilibrium are undermined by the spectacle of those who have given proof of greater abilities and capacities. Everybody is aware of his own defeat and insufficiency.”[3]
In a pre-capitalist “status” society nobility, rank, and birth determined where you stood in the social hierarchy. Your “place” in the world was static and you could feel better about yourself: you weren’t the king because you weren’t born a king and it’s not your fault.
But in a capitalist economy operating in a free society you don’t have that excuse.
Why?
Because with capitalism a person is not rewarded economically because of their birth rank but in accordance “to his contribution to the well-being of his fellow men and where thus everybody is the founder of his own fortune.”[4]
The consumer is king and the person able to meet the unsatisfied demands of the most consumers in the cheapest and best way possible gets the most “status points” (money).
More importantly, everyone is free to try to “de-throne” the existing economic order at any time and make a fortune of their own by appealing to the “sovereign consumer.”
It may be hard, but if you want to dis-lodge Coke as the global soft-drink powerhouse make a better soft drink which more people want to drink.
Can’t? Don’t know how?
Then it’s your lack of knowledge, will, and/or ability that is the cause of your frustrated ambition, not capitalism.
“It is-in a market not sabotaged by government-imposed restrictions, exclusively your fault if you do not outstrip the chocolate king, the movie star and the boxing champion.”[5]
And it is this knowledge of our own limitations which capitalism reveals that breeds a deep resentment, von Mises argues, among people who have failed to achieve the level of success they want in their respective field but don’t want to admit they are the cause of their own failure.
It’s much easier and psychologically more satisfying to blame capitalism for your failures:
“In order to console himself and to restore his self-assertion, such a man is in search of a scapegoat. He tries to persuade himself that he failed through no fault of his own. He is at least as brilliant, efficient, and industrious as those who outshine him. Unfortunately, this nefarious social order of ours does not accord the prizes to the most meritorious men; it crowns the dishonest unscrupulous scoundrel, the swindler, the exploiter, the ‘rugged individualist.’ What made himself fail was his honesty. He was too decent to resort to the base tricks to which his successful rivals owe their ascendancy. As conditions are under capitalism, a man is forced to choose between virtue and poverty on the one hand, and vices and riches on the other. He, himself, thank God, chose the former alternative and rejected the latter.”[6]
Sound familiar?
Does this mean capitalism gives us total control over our destiny?
Of course not:
“It cannot remove or alleviate the innate handicaps with which nature has discriminated against many people. It cannot change the fact that many are born sick or become disabled in later life.”[7]
But it can give you a chance to earn the wealth you want through your own efforts.
If you choose to pursue work in a field that serves less consumers and therefore receives less “economic votes” (money), writing philosophy as opposed to making Coke for example, you’re free to do so and enjoy the rewards that come from writing philosophy.
Just don’t get angry at “the system” because you’re getting less money than the person who satisfies the wants and needs of more people successfully.
That’s how it’s supposed to work and it’s a fair system: if you want to be economically rich you’re free to do so right after you finish reading this post.
All you have to do is figure out a way to satisfy the wants and needs of more “sovereign consumers” and take Winston Churchill’s advice literally: “Never, never, never, never give up.”
[1] Ludwig Von Mises. The Anti-Capitalistic Mentality. (New York: D. Van Nostrand Company, 1956).
[2] http://en.wikipedia.org/wiki/Ludwig_von_Mises
[3] von Mises, 12-13.
[4] Ibid, 15.
[5] Ibid, 10.
[6] Ibid, 14.
[7] Ibid, 10.
Comments
4 Responses to “Why people hate capitalism.”
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I would like to point you to a review of Mises’ aforementioned book on Amazon which pretty much rebuts your article: http://www.amazon.com/review/R24G7E0RJNGV3/ref=cm_cr_pr_cmt?%5Fencoding=UTF8&ASIN=0865976716
Well Mike, I wouldn’t use the word “rebut” but it does lay out the other side of the argument. What it comes down to, from my point of view, are these points: is there a difference between earned and unearned wealth?; even if some people make their money without earning it in our system of capitalism because of government favors etc, does that negate the fundamental argument von Mises is making? If you read the whole book you will see he is quite aware of the impact of government intereference, inheritance, and other wealth “delivering” factors that have nothing to do with ability. Yet, his point is, those are the exceptions and not the rule in a capitalist economy. Moreover, the people who get their money that way, as long as they are not protected generation after generation by some government power, will eventually lose that wealth because they do not know how it was produced in the first place. Thanks for the link to the review and your comment.
The von Mises argument is simply petty. I think the obvious failure of capitalism is that in the end it is a criminal enterprise all together. Taken to its logical ends, it can only end with human abuse and destruction of nature. There is no other possible endpoint. When I say “criminal” I mean that it fails to deliver any natural justice because it wall always follow the path of least resistance - a path which devalues Man (because it is cheaper and possible to do so) and destroys nature, the ultimate source of the wealth.
Following the path of least resistance is the essential part of the profit algorithm. i.e. Far easier (profitable) to dump waste in the river than to reprocess it safely. Far more profitable to drive labor costs down, than to pay for the long term well-being of employees, and so on.
I think most who worship capitalism start from a false premise that the Divine Purpose of Man is to be an actor or cog in some machinery of economics.
There is one big problem here… Let’s use as an example the Coke scenario. Suppose you do come up with a soft-drink that is better than the classic Coke. People love it, pay you for it, and slowly but surely your product shows promise of becoming a worldwide phenomenon. Will the Coca-Cola company stand idly by and just let this happen? Would Pepsi do the same? Of course not. They would use all means (legal or illegal) to stay on top. It’s always more difficult to gain ground than to defend it. And that is a result of the system, not the person’s ability to offer a quality product.