There are two types of freedom: freedom to do what you like, and freedom from the actions of others. As explored in Handmaid's Tale, forced suppression of individual freedoms for the common good, is often corrupted to serve those in power. If you leave people alone, they trade with each other. When they trade, some people do better than others. Those people amass capital, which they reinvest to gain further advantage. The world prospers with its resources in the hands of the best allocators, but at the cost of massive inequality.
In the twentieth century this played out on the World stage, with individual freedoms restored after WW2 in the West, and curtailed in the East. The gap between the rich and the poor is colossal in the West, yet the East only managed to close this gap by making everyone equally poor. Natural experiments arose with some countries split in two, and in every case – North vs South Korea, East vs West Germany, North vs South Vietnam, Capitalism was the clear victor. Even self-proclaimed communist countries like China have reformed to adopt the wisdom of the markets. These failed experiments cost by some estimates over 100 million deaths in Communist countries, without calculating the human cost of curtailed freedoms, suppression of speech, and forced labor. Yet a new wave of Socialism has emerged in America, with polls showing 41% viewing it positively. How does the meme of Marxism persist?
Capitalism is the punchline of self-deprecating jokes about the way we live now. When you fail to cope in your (historically luxurious) everyday life, it’s fashionable on the left to imagine what you might be doing in a post-capitalist society. If it wasn’t for Capitalism I’d be doing art, instead of making lattes. In a Communist society profits would be reinvested in social programs, not wasted making the rich even richer. Rather than take personal responsibility it’s softer on the ego to make it a political thing. It’s not enough to change myself, I must change the system. But these problems are not imposed by Capitalism. They’re imposed by life. Capitalism is just how we account for them and make trade-offs. If you really think that you’re worth more, then prove it! You’re free to start a business that corrects whatever things you think are wrong with the world, and the market will prove you right or wrong. Nobody is stopping you. That’s perhaps the scary part.
Communism might be dangerous for society, but not necessarily for the average host infected by this meme. Unless you have a talent for achievement, freedom can be a burden. You can’t afford to take a risk on starting a business to change the way the world works, if you deep down believe you’re not good enough, or there’s no obvious way to do things better. Better to join a mass movement, blend into the crowd and escape individual responsibility, while feeling like you’re doing your part for a better future. Aspiring Communists are mostly good people, trying to do good things. It’s only later that the Communism meme agitates its hosts into neutralising rival memes, through censorship and police action against political deviants. By then it’s too late, and another generation has to learn to value freedom. As parodied in Animal Farm: “All animals are equal but some animals are more equal than others”.
Capitalism radically increases living standards. It’s counter-intuitive that it should be the case that letting people be free to pursue selfish motivations has such positive externalities. Resource allocation under uncertainty is hard for any system. Markets are magic. Millions of perfect strangers were involved in making the goods I consume, and I almost never have to worry about the underlying complexity of orchestrating all of that. Nobody does: it just happens. There may be a better system out there, but to paraphrase Churchill, Capitalism is the worst system “except for all the others that have been tried”. Yet even red-blooded capitalists agree we need some form of government to protect us from mercenary behavior. In experiments apes behave purely selfishly when given the opportunity, whereas humans cooperate against our own interest: implying collectivism separates us from the animals. Take this too far though, and eventually Atlas shrugs – the most productive people opt out – and the system suffers rapid collapse.
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