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Time 100 Roundtable on Capitalism

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In this short discussion about the future of capitalism (mostly consisting of totally unqualified experts), Arianna Huffington says American capitalism has been "reduced" to Ayn Rand's virtue-of-selfishness capitalism, instead of having a moral foundation!

(I'm just glad Ayn Rand has attained such a place of influence, at least in intellectuals' minds, even if misconstrued.)

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I'm thinking capitalism works out because it's the default system that emerges when people are free to trade for mutual benefit. It's not something the government or even the businesses consciously 'put in place.' It's a natural phenomenon. As soon as a bunch of wiseguys get together and work on ways to improve 'our system', trouble is bound to follow.

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Well, you're partly right, but I think you do have to put it in place, as a government. That means you have to structure all your laws with the exclusive aim of protecting individual (property) rights. Isn't that "consciously put(ting) in place" a system?

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Well... The government 'puts in place' or preserves the freedom required, but beyond that there's nothing smart or complicated about 'implementing capitalism', it just happens. I suppose there are some advanced things like intellectual property but capitalism will still take place in some form.

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(I'm just glad Ayn Rand has attained such a place of influence, at least in intellectuals' minds, even if misconstrued.)

I understand what you're saying, but when no one corrects an idea that is so blatantly false to people like you and I who understand exactly that Rand's idea of capitalism is not about sacrificing others to self, Rand's influence seems minimal. Arianna Huffington already had an axe to grind. To me, it shows that many people know so little about Rand that people who to seem to actually have a vendetta get away with their claims.

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I understand what you're saying, but when no one corrects an idea that is so blatantly false to people like you and I who understand exactly that Rand's idea of capitalism is not about sacrificing others to self, Rand's influence seems minimal. Arianna Huffington already had an axe to grind. To me, it shows that many people know so little about Rand that people who to seem to actually have a vendetta get away with their claims.

Look at it this way. There are many people in America who, when they hear liberal intellectuals hating or demonizing someone so much, they simply become interested in that person: they will google that person or buy any book she's written just to know why she's got so many liberals ticked off (that's one big way Sarah Palin became so popular). There's a very huge number of people that distrusts liberal intellectuals that way (and their googling might just lead them to this forum!).

So I think it's kind of a good thing when they attack her in any way really.

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Well... The government 'puts in place' or preserves the freedom required, but beyond that there's nothing smart or complicated about 'implementing capitalism', it just happens. I suppose there are some advanced things like intellectual property but capitalism will still take place in some form.

Tyco, I think you probably might want to study the meaning of capitalism from an Objectivist perspective a little more. It's not something that "happens," and it certainly is not something that "just happens." It's not some phenomenon. It's a social system you put in place. Capitalism is not wealth creation.

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Arianna Huffington says American capitalism has been "reduced" to Ayn Rand's virtue-of-selfishness capitalism, instead of having a moral foundation!

This is a statement outright contradicting itself. It says "It's based on this moral foundation instead of having any moral foundation!" That deserves a whack to the back of the head.

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Blackdiamond, as far as i recall, Rand defined capitalism as free trade for mutual benefit.

Therefore if people are free to trade (ie. Their rights are protected and no force is involved), then capitalism follows. On an individual level people have to take the initiative and actually trade, but that is virtually guaranteed. Capitalism is what you get when you logically apply the principle of freedom when writing the laws of the land and creating property rights. Other things like socialism or communism have to be planned and implemented by the government, with instructions on how individuals must act for the system to work. To have a capitalist state you don't need to instruct anybody, people just do it.

I don't know what you had in mind.

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You have it reversed, Tyco. I don't think it's a very important error, but trading is not capitalism (even if it is free and for mutual benefit). In a capitalist system, you are not just free to trade, you are even free to not trade. Capitalism does not follow when you have a system of protecting individual rights in place. That very system is what capitalism is.

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I'm thinking capitalism works out because it's the default system that emerges when people are free to trade for mutual benefit. It's not something the government or even the businesses consciously 'put in place.' It's a natural phenomenon...

The government 'puts in place' or preserves the freedom required, but beyond that there's nothing smart or complicated about 'implementing capitalism', it just happens. I suppose there are some advanced things like intellectual property but capitalism will still take place in some form....

Blackdiamond, as far as i recall, Rand defined capitalism as free trade for mutual benefit.

Therefore if people are free to trade (ie. Their rights are protected and no force is involved), then capitalism follows. On an individual level people have to take the initiative and actually trade, but that is virtually guaranteed. Capitalism is what you get when you logically apply the principle of freedom when writing the laws of the land and creating property rights. Other things like socialism or communism have to be planned and implemented by the government, with instructions on how individuals must act for the system to work. To have a capitalist state you don't need to instruct anybody, people just do it.

That is not how she defined it, and there is a reason for that. Here is her definition, from the Lexicon:

'Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.'

Notice the focus on individual rights rather than freedom. This is because what 'freedom' means is entirely dependent upon the underlying system of rights. Does an employer impinge upon an employee's freedom by paying him too low of a wage? You and I would answer, Obviously not, but why? Because of an underlying theory of rights which specifies which actions a man is entitled to take, and which he is not. Without that, 'freedom' becomes an empty concept, one that everyone supports but no one agrees on the specifics of.

Implementing freedom, or banning the initiation of force from society, is entirely dependent on a coherent definition of "the initiation of force," which in turn depends upon rights theory and is not nearly as obvious as is commonly supposed.

Implementing capitalism thus means implementing a very specific system based on individual rights. This system must identify clearly what each person has a right to, how unowned resources can properly become someone's property, how property is transferred, how contract disputes are settled, how crimes are punished, etc. None of this is automatic, simple, or 'natural' in the sense that it will just happen. Thinking otherwise is a common error made by, for example, many anarcho-capitalists, who presume that merely abolishing all states is sufficient to get a society based on some 'natural law' conception of individual rights and property rights. In fact, we require very specific institutions to implement an objective system of laws based on individual rights. A proper philosophy of law must underlie these institutions, a field which Rand did not do much work in but nonetheless acknowledged as extremely important.

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OK she said it was a social system based on the recognition of individual rights, she did not say it was those individual rights. Capitalism it the trading part, or rather the type of trading people will (probably) do when they have those protected rights. And the rights (or the laws to support them) are implemented because they are the only logical application of 'freedom' - other systems may result if you have an invalid conception of freedom or unsound application. You don't implement those rights so that you can have capitalism - you implement them because they are just. Capitalism is an emergent system, not one that gets 'implemented.' True, you need quite complicated apparatus for an advanced capitalist economy, but those things (the courts etc.) are developed to support justice in the face of chaos/anarchy, not to support capitalism.

Furthermore, capitalism happens in spite of counter-productive laws or foolish attempts to interfere with it - because at heart it is the phenomenon/activity resulting from the profit motive.

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True, you need quite complicated apparatus for an advanced capitalist economy, but those things (the courts etc.) are developed to support justice in the face of chaos/anarchy, not to support capitalism.

I would say that if capitalism were basically an emergent system, you wouldn't even need a government. Everything would just happen naturally, no force would be necessary to keep any system in place. If that were the case, then anarchy is the best option, that way, everything happens as naturally as possible.

That isn't the case, though. It's not just rights or freedom that is implemented, but a specific kind of government as well. Any government - whether socialist, totalitarian, or capitalist - requires a specific kind of implementation.

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You know the phrase, 'honest people don't need governing?' It's true: if you started with a small island community, and people understood the logic of recognizing each other's rights, then you wouldn't need anything else for capitalism (see: Galt's Gulch, although they did have a judge/magistrate but he was never called for). It would just happen, assuming people were interested in creating and trading. The necessary conditions are in place. When you add more and more people, it's likely that some will be dishonest and/or irrational, so then you need a governing force to protect rights. When you have thousands, millions of citizens then you need the governing/legal system to grow proportionally to cope with the load of crime and the messy disputes. Of course, it's possible that by dismantling parts of government/state you might no longer have the ability to preserve rights in the society you currently exist in. But basically you focus on preserving individual rights/freedom, as society grows, and the rest (capitalism) emerges naturally.

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I would say... there is no such thing as 'the' capitalist economy. You can have 'a' capitalist economy, which is essentially an instantiation of the concept of capitalism, so it wouldn't make sense to say I'm talking about one and not the other. It'd be like saying 'you're talking about funk records, not funk proper.'

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