Is capitalism economic freedom?

Maggie Barker, period 5

Does capitalism make us more free, or less free? Some argue that capitalism diminishes the freedom of the people because the rich and powerful demean their workers until they have no self-worth. On the other hand, others argue that capitalism allows the people to live an extremely free lifestyle driven by the necessity of business owners to please the masses.  Naturally, capitalism is not a fool proof system, but ultimately, I agree with the latter group of thinkers: capitalism makes us more free.

While I do believe capitalism allows its people to live a free life, it does not always live up to its reputation of freedom as seen in early twentieth century America. The Jungle by Upton Sinclair depicts a time in America when capitalism was not functioning at its finest. Even though The Jungle was basically Upton Sinclair’s love novel to socialism, he does somewhat accurately portray American during this time. The early twentieth century was a time of extreme industrial growth, but America saw the adverse effects of this growth as well. As seen in The Jungle, immigrants would move to American in hopes of a better life. But instead, just like Jurgis and his family, they were met with over-crowded cities, low wages, horrible work conditions, high crime rates, and extreme corruption in almost every aspect of society. Every member of the family needed to work in order to stay alive which left many children uneducated. Not to mention, the powerful few of the food industry were able to deceive the masses by selling food to the public that was unsanitary (to say the least – I’m talking human fingers and rat feces). Lastly, workers’ unions were given little recognition. But, reform came quickly during the Progressive Era. Acts were passed to ensure the quality of food and to rid corporations of their corrupt actions. Progress was also made toward protecting the rights of the worker.[1]

Now you may be wondering how I can support capitalism so intensely even after knowing that it can fail so miserably. My answer to that would be that every country experiences growing pains especially during a time of drastic change such as the advances in industry experienced in the late nineteenth century and early twentieth century. America had promised to be the land of the free and realized that it was not keeping its promise. America was able to take notice and then take action. In the end, capitalism triumphed, and America kept its promise.

There are still people who think capitalism is the opposite of freedom because of what it does to its workers. For example, in the Manifesto of the Communist Party, Karl Marx and Friedrich Engels discuss why they believe capitalism is a violation of freedom. They stated, “Owing to the extensive use of machinery, and to the division of labour, the work of the proletarians has lost all individual character, and, consequently, all charm for the workman. He becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him.”[2] They think that the bourgeoisie, the rich, strip the freedom of the proletariat, the working class, by making their work as meaningless as possible; the work becomes so easy that the worker is simply just another piece to the machine. Marx and Engels go on to explain that “No sooner is the exploitation of the labourer by the manufacturer, so far, at an end, that he receives his wages in cash, than he is set upon by the other portions of the bourgeoisie, the landlord, the shopkeeper, the pawnbroker, etc.”[3] They argue that once these workers receive their wages, they are quickly forced to hand them right back to the bourgeoisie. They have to use this money to survive and pay for things like rent and food. As a result, they are forced to live with basically no money. The working class is left poor and destitute – longing for their freedom. Marx and Engels would argue that capitalism is the paradox of freedom because the working class is worked into the ground by the powerful and is then forced to give their wages right back to the rich.

Now you are probably really wondering how in the world I believe capitalism makes us more free after reading how Marx and Engel define and characterize capitalism. But they missed a few key points that really show why capitalism allows freedom to flourish.

While Marx and Engel’s argument makes capitalism sound, well frankly, like the anti-Christ, what they fail to realize is how capitalism actually puts the power in the hands of the masses and how it allows people to have private property which furthers their freedom. Ludwig von Mises lays out why capitalism allows its people to live a free life. Capitalism puts the power in the hands of the many and allows people to become individuals through private property.

Von Mises argues that capitalism actually puts control of the economy into the hands of the working class – the masses. He states, “Capitalism is not simply mass production, but mass production to satisfy the needs of the masses.”[4] He is basically stating that capitalism is not simply mass production, but mass production to please the masses. The majority of consumers are working class, and the only way to become rich and powerful under capitalism is to cater to the needs of the many. As a result, the masses have complete control over the market. Von Mises even goes so far as to say, “The plants that cater to the luxuries of the few never attain big size.”[5] The only way to become truly rich is to give the masses what they want which leads to a much more satisfying life for the working man. Furthermore, capitalism allows for an ever changing powerful class. If someone figures out how to please the masses at a lower cost with a new invention, they can become rich: “The rich are not a fixed aristocracy. Who is rich and who is poor is always changing. You can’t have a prosperous or innovative economy unless people are allowed to become rich.”[6] Von Mises perfectly sums up this incredible characteristic of capitalism by saying, “The consumer is king, is the real boss, and the manufacturer is done for if he does not outstrip his competitors in best serving consumers.”[7]

Another aspect of capitalism that allows freedom to flourish is the right to private property. It allows people to become individuals and have opinions. Von Mises says that a defining characteristic of our Western culture is “the creation of a sphere in which the individual is free to think, to choose, and to act without being restrained by the interference of the social apparatus of coercion and oppression, the State.”[8] This is exactly what private property allows us to do. Allowing the masses to own their own property gives them a space in which they can express their feelings, opinions, and thoughts. “The social system of private property and limited government is the only system that tends to debarbarize all those who have the innate capacity to acquire personal culture,”[9] von Mises argues. Capitalism allows for private property which allows us to become more human because we are able to become individuals. True liberty is not fearing persecution by the government because of your individuality.

I am not saying that capitalism is flawless or the perfect economic system. Capitalism can fail quite greatly as expressed very clearly in the novel The Jungle. Also, it does not guarantee that there will be no poverty. There are people, like Marx and Engels, who believe capitalism to be the negation of freedom because it works the masses into the ground and strips them of their individuality. But capitalism does quite the opposite, as von Mises argues. Capitalism allows the masses to be in control of the market because the only way people can become rich is by accommodating the masses. Also, capitalism encourages private property which allows people to become individuals and to be free from the government. Because of these reasons, I believe capitalism makes us more free.

[1] Marty, Myron. “Twentieth Century: Society in the United States.” Scholastic Inc. December 7, 2015. http://www.scholastic.com/teachers/article/twentieth-century-society-united-states.

[2] Marx, Karl, and Engels, Friedrich. “Manifesto of the Communist Party.” In How to Find Happiness without a Free Lunch. 1948. Accessed December 7, 2015.

[3] Marx and Engels

[4] Von Mises, Ludwig. “Liberty and Property.” In How to Find Happiness without a Free Lunch. 1958. Accessed December 7, 2015.

[5] Von Mises

[6] Forbes, Steve. “How Capitalism Will Save Us.” Forbes. Decemeber 7, 2015. http://www.forbes.com/2009/11/03/capitalism-save-us-opinions-forbes_land.html.

[7] Von Mises

[8] Von Mises

[9] Von Mises

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