The Problem of Capitalism
As I wrote elsewhere (d’après Max Weber), Capitalism is what happens to Calvinism when it forgets the god it was theoretically about. Everything is kept in place, except the afterlife; material riches substitute for that. Unlike the other main contender in the field of materialist ideology, Communism, Capitalism inherited from its Calvinist direct ancestor a strong individualist basis. While it was between the individual and his god in the previous version, it became about the individual and money when the latter replaced the former.
The main principle of Capitalism is what Adam Smith discerned about markets in general: they work, and by working they generate riches. It’s more than just distributing well what is produced; market incentives lead to wealth creation. If someone finds out there is a repressed demand for a certain product, he will try to produce it. He could, for instance, bake bricks using free mud and free firewood; his labor would create wealth where it did not exist before. What he got for free became, by the work of his hands (and his business acumen, ignored by Marx) something that has a price; something that can be sold. If bricks are scarce, the price goes up; if they are abundant, it goes down. It indeed works.
It is certainly not the case with the Communist alternative — which would be better-called Socialism instead; Communism, in Marxist parlance, would be the final and never-reached Stateless Utopia, that would come after human nature was changed (hah!) by a few generations of State-full Socialist society. The New Man would have been built out of the Old Man, and all problems of mankind would have vanished. The main problem is, of course, the simple fact that human nature cannot be changed. It can only be improved by Divine Grace, on a case-by-case basis, and the next generation will always start from the same lowly point. The improvements of grace cannot be inherited.
Socialism does not work, and cannot work. It is a fantasy in which material goods stand in for the aforementioned divine grace, an immanentized (and eschatological, in the apocalyptic sense) version of the Catholic Communion of the Saints. But we are certainly not saints, and as Orwell wrote, when push comes to shove “[a]ll animals are equal, but some animals are more equal than others”. Powerful people in Capitalism avoid traffic with helicopters; in the theoretically equalitarian Soviet Union, the powerful had traffic lanes for themselves, so that their limousines would not be stuck with the hoi polloi. The most equal among their equals, they were.
Now, Grace is by definition divine, and its Allocator is — also by definition — All-Knowing and All-Powerful. The KGB and the Communist Party could very well be quite efficient, especially when hunting for “traitors”. Nevertheless, they would never be able to keep tabs on each of the tremendously vast military, industrial, social, and personal needs that their material-goods production and distribution scheme would have to fulfill. Hayek crossed his TTs and dotted his IIs when he explained that.
Capitalism (in the sense of an ideology that trusts the market to solve all social problems) does not have this problem. The production and allocation of material goods are regulated by the medium of money: the scarcer a good is, the dearer it is, and the more abundant the cheaper; everything else flows from that. And indeed it does. In a society where State control is weaker (as down here), it would be understandable if a scientist mistook umbrella sellers for a kind of mushroom, as they seem to pop up from nowhere as soon as the first drops of rain fall from the sky.
The problem of Capitalism is of another, completely different, nature. While Socialism intended to change human nature in the somewhat near future, Capitalism started from the premise that it had already been changed. This premise is implicit in the Calvinist religion that guided Adam Smith (who wrote not only The Wealth of Nations but also a Theory of Moral Sentiments; I’ll quote from it as “TMS, part, chapter, section”) and, more importantly, Adam Smith’s society. No man is an island, you know, but 18th-Century Scotland certainly was.
In Calvinism, man is considered “totally depraved”, that is, unable to rise on his own effort, or even to collaborate with Grace. On the other hand, he could be elected by his god, unconditionally (of course; being totally depraved his merits would be worth zero). Whenever it happened he would be regenerated, whether he wanted it or not, and this transformation would be permanent.
In other words, the Chosen® would have had their natures already transformed, no bloody revolution needed. Those predestined to Hell by their god would not, of course, and their nature would always be the same old ugly thing. As they did not stand a chance of improving (total depravity minus unconditional election equals unreformable scum), they could not be considered a real part of society. In the end, it would obviously be perfectly OK to send them to Australia, Riker
Article from LewRockwell