When Ayn Rand wrote “Capitalism: The Unknown Ideal” in 1967, she had no illusion that even then (and most certainly today) the American economy was not worthy of the term capitalism. That had not always been the case however. In the early years of America’s founding, interactions among free men were unfettered by government regulation to the scale it is today. But the failure of the United States to maintain its once pure and honest economic system is not the fault of capitalism itself. It is oft claimed by those on the left that capitalism’s inherent characteristics of competition and greed are paradoxically the ingredients for its destruction. This has been exemplified best by none other than Karl Marx himself, but also by lesser intellectuals like Michael Moore in his documentary, “Capitalism: A Love Story.”
It was with the recent economic recession that rocked Wall Street and financial institutions abroad which brought capitalism’s doubters to rear their ugly head. Attacks on high-payed CEOs and cloaked bankers of unmeasurable prestige were leveled, their pay criticized, their business practices judged immoral. What lacked fervor, however, was the conversation on just how the American government had twisted and droved its way into almost ever crevice that had begun to fall apart. What seemed to be ignored was the nature of the relationship between politicians and banks – a cronyism of colossal magnitude that fell like the house of cards it was.
We do not live in a capitalist system. We live in its mongrel, starved, and unshaven cousin. We do not enjoy the receptivity of free markets. We suffer from a foggy swamp of state direction.
To exhibit such dismay would be the work of a voluminous text. But take for example the sobering news reported by the Wall Street Journal that 1 in 4 Americans needs permission by the government to work, or that the ethanol industry is pushing for more federal subsidies with sured promises of campaign assistance, or even the deplorable admission that the Federal Reserve hid from the public the fact that it lent millions of taxpayer dollars to foreign banks during the peak of the financial crisis.
The United States government has interjected itself into sector after sector in the name of the “common good.” Subjective regulation, birthed in the closed doors of Washington D.C., is hailed as a necessary axiom to our complex economic system. Because if this, we live in a state of crony capitalism, a mixed economy of heavily regulated markets and unaccountable controls of our money. It would behoove us all to reconsider the term capitalism and its moral implications.
Capitalism rests the responsibility and consequences of trade on the private sector. It is a system where free men may exchange goods for valued currency or other goods at their own discretion. It is the only system that recognizes the sovereignty of the individual and the rights he has been endowed with by his very nature. The moment government instills the use of force upon the individual in his array of choices presented to him by the market, it has transgressed on his right to pursue happiness. The moment government bans the production of a product in the name of “public safety” it has transgressed on the right to liberty. The moment the individual is no longer seen as sovereign in the eyes of the state, it has transgressed on his right to his own life.
What is the solution to these pressing problems? It is not to just deregulate, but to withdraw the state to its only moral purpose, to stop injustice so justice itself remains. We must reevaluate the meaning of government as the protector of our rights, not the purveyor of them. We must remember that government is powered by the engine of popular sovereignty, and that if it grows beyond the confines laid out for it, we have the right to change it.