Capitalists: The Most Valuable Yet Endangered Species

by | Mar 16, 2019 | POLITICS

Far more important than a debate about the relative practicality, efficiency, or productiveness of capitalism and socialism is a debate about their relative moral merits.

Far more important than a debate about the relative practicality, efficiency, or productiveness of capitalism and socialism is a debate about their relative moral merits.

It’s good that Americans increasingly are debating “capitalism versus socialism” instead of merely bickering over the incoherent petty details of our mixed-system (the welfare state) and how some of its features might be fixed, reformed or extended (but never rescinded!). The welfare state, in fact, is fundamentally unjust, an abomination that’s prone to fiscal bankruptcy due precisely to its moral bankruptcy.  A system that institutionalizes the robbing of Peter to pay Paul, because a democratic majority approves of it and political demagogues benefit by it, doesn’t make it right. Looting and mooching aren’t morally justified if socialized, any more than a rape is morally justified if it is a gang rape inflicted with the approval of some sordid majority.

Far more important than a debate about the relative practicality, efficiency, or productiveness of capitalism and socialism is a debate about their relative moral merits.  That capitalism is the superior productive system has been obvious to all but the most obtuse for at least two centuries. But many people today (especially intellectuals) still insist that socialism is morally superior because it requires the sacrifice of egoistic and individualist aims; well, it does require sacrifice, but that’s why its morally inferior and patently unjust. Rational egoism is the essence of morality; individualism is the basis of respect among persons; capitalism enshrines both.

No system (like socialism) that requires human sacrifice can be called “humanitarian.” None that opposes advances in science, technology, industry, or energy can be called “progressive.”  None that seek to suffocate or extinguish civil, economic, and political liberties can be called “liberal.”  Capitalism, to its credit, is humane, progressive, and liberal. It’s a shame that so few people (or intellectuals) know it or expound it; until they do, the “debate” has not been joined.

The socialists today are numerous, vigorous, and even arrogant, despite socialism’s horrid historical record. Capitalists today, in sharp contrast, seem few and dispirited, and even if not unaware of its wonderful track record, nevertheless seem unable or unwilling to defend egoism and individualism. If you can’t defend capitalism morally and recognize that being moral means being egoistic, you’ll be ineffective; you may even facilitate the persistence of socialism.

Consider how often people, upon hearing of some new socialist scheme, declare that “it sounds good,” but is “probably” too costly and impractical. “Sounds good” is code for “is moral,” or “is just,” or “is fair.” In fact, it’s none of those things, if it requires human sacrifice. If you endorse or condone socialism’s alleged “morality,” you ensure that we’ll suffer from its impracticality.

President Trump, a conventional defender of our current welfare state, has said that “America will never be a socialist country.” Note how this is a negative proposition, delivered defensively. He doesn’t ever mention capitalism – let alone defend it – let alone defend it morally. What’s needed today isn’t just the avoidance of evil but the pursuit of good; what’s necessary is that America become more humane, progressive, and liberal, by becoming a fully capitalist country.

In late 2010 I published the following essay under the title “Where Have all the Capitalists Gone?” (*).   Its central message is no less relevant today – perhaps even more so, given the recent pro–socialist resurgence, flung in the face of a pro-capitalist quiescence.

*Click here for on-line access to my 78 essays for, published in 2010-2011-2012-2013.


After the fall of the Berlin Wall and dissolution of the USSR two decades ago, almost everyone, including famed leftists like Robert Heilbroner, conceded that capitalism was the historic “victor” over socialism. Yet interventionist policies reflecting largely socialist premises have returned with a vengeance in recent years, while capitalism has been blamed for causing the 2007-2009 financial crisis and global economic recession.

In 2009 a Newsweek cover insisted that “We Are All Socialists Now,” soon after Alan Greenspan publicly decried the “infectious greed” of markets. Meanwhile long-failed Keynesian policies have been aggressively re-imposed on innocents almost daily.

Despite an economic recovery this past year, hostility remains trained on Wall Street, business, profits and the rich, whether by populists from the left and right, or by capitalism’s traditional haters among politicians and journalists. The Economist just ran a column titled “The Filthy Rich,” which declares that since the rich are “unloved and unwanted” they should “hide or support a charity.” The hatred of wealth-makers is ubiquitous–yet people wonder why capital is on strike.

What explains this seemingly abrupt shift in the world’s estimate of capitalism from only a couple of decades ago? After all, a political-economic system, whether capitalist or socialist, is a broad and persistent phenomenon that cannot logically be construed as beneficial one decade yet destructive the next. These systems simply are what they are, for good or ill.

Yet while capitalism was being credited as “victorious” over socialism a mere two decades ago, it now stands convicted without a trial, amid a revived eagerness for socialist schemes. Not even today’s Tea Party movement seems committed to capitalism in any deep sense.

In short, where have all the capitalists gone? The beginning of an answer might be found in the curious phenomenon that a “socialist” today means an advocate for the political-economic system of socialism as a moral ideal, yet a “capitalist” means a Wall Street financier, venture capitalist or entrepreneur–not an advocate of the political-economic system of capitalism as a moral ideal.

Indeed, most of the world’s wealthiest people–for example, George Soros, Warren Buffet and Bill Gates–are “liberals” who lobby for an ever-bigger, more-intrusive state. Most people distrust the wealthy for making so much money, yet tolerate or cheer them on for giving it away or lobbying for still-higher tax rates.

That the concept “capitalist” today is still largely non-ideological or amoral reflects a deeper bias (especially among intellectuals who claim the rich are guilty and the rich who view themselves as guilty because the intellectuals say so): that capitalism is not and cannot be moral, at least not on Judeo-Christian grounds. Thus in spite of its vast practical benefits–its promotion of peace, prosperity and culture–capitalism is deeply distrusted, by liberals and conservatives alike, precisely because it is secular, materialist and individualistic.

Capitalism embodies the life-enhancing, wealth-creating ethic of rational self-interest–of egoism, of “greed,” if you will–which is perhaps most blatantly manifested in the profit motive. So long as this humane ethic is distrusted or despised, capitalism will suffer unearned blame for any social-economic ill.

Both the enemies and friends of capitalism concede its productive prowess, yet also disdain its morals, as one can see in as varied a group as Karl Marx, John Maynard Keynes, Friedrich Hayek and President Barack Obama.

In his Communist Manifesto (1848) the arch anti-capitalist Marx conceded that capitalism “created more massive and more colossal productive forces than have all preceding generations together,” gave “an immense development to commerce, to navigation, to communication by land,” and “by the rapid improvement of all instruments of production, by the immensely facilitated means of communication,” drew “even the most barbarous nations into civilization.” Why then wasn’t Marx pro-capitalist? He claimed capitalism was evil, because it “put an end to all feudal, patriarchal, idyllic relations,” “left no other nexus between people than naked self-interest,” and “drowned out the most heavenly ecstasies of religious fervor” in the “icy water of egotistical calculation.”

Capitalism immorally “set up that single, unconscionable freedom–free trade,” and this “evil” system was doomed to fail on practical grounds, Marx insisted, by creating “too much civilization, too much means of subsistence, too much industry, too much commerce.” Private property must be abolished, he said, despite its vast power to create a productive civilization, because “the right of man to property is the right to enjoy his possessions and dispose of the same,” which is a right “without regard for other men,” hence “the right of selfishness.” Capitalism must “fail” because it is “evil.”

In the 1930s intellectuals claimed that British economist John Maynard Keynes “saved” capitalism from the clutches of socialism. But at root Keynes, like Marx, despised capitalism’s morality. In a 1930 essay he yearned for “great changes in the code of morals” and for a future in which “the accumulation of wealth is no longer of high social importance” and “we shall be able to rid ourselves” of such “distasteful human qualities” as “the money motive,” which he described as a “disgusting morbidity, one of those semi-criminal, semi-pathological propensities.”

In a 1933 essay he wrote that “the decadent international but individualistic capitalism, in the hands of which we found ourselves after the War, is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous. … In short, we dislike it and are beginning to despise it.” In his introduction to the German edition of his General Theory of Employment, Interest and Money, issued as Hitler ascended to power, Keynes said his theories and policies were “more easily applied to the conditions of a totalitarian state” than to those with “a considerable degree of laissez-faire.” Thus today’s top disciple of Keynes, Nobel laureate Paul Krugman, loudly heralds the most reckless and punitive policies.

Yet beware also the conservatives, who today argue as the late Friedrich Hayek once did. In The Road to Serfdom (1944), where he warned, correctly, that the seemingly benign welfare state can lead to a totalitarian state, Hayek also complained of pro-capitalists who with “wooden insistence” defended “the principle of laissez-faire.” For Hayek, as for leftists, “the desire for a collectivist system springs from high moral motives,” where “high” motives means those “above,” beyond and opposed to the motive of self-interest and the individualist ethic, the capitalist morals which are presumed to be low, vulgar, and crude. Such an unwarranted apology for capitalism doesn’t constitute even a speed-bump on the road to serfdom.

Obama is only the latest to concede capitalism’s productive power, while adamantly opposing its morals. “The reason we’ve got an unparalleled standard of living in the history of the world,” he said recently, “is because we’ve got a free market that’s dynamic and entrepreneurial, and that free market has to be nurtured and cultivated.” All that’s true enough–to the extent we’ve had freedom in markets. But Obama’s policies, like those of his predecessor, only stifle markets instead of nurturing them. Obama has said capitalism’s profit motive is corrupting, its wealth distribution is “unjust” and its financiers are “fat cats.” As with Marx, Keynes and Hayek, such biases reflect a deep disdain for capitalism’s unique morals.

The collapse of socialist regimes two decades ago didn’t mean capitalism was finally being hailed for its many virtues; the historic event only merely reminded people of capitalism’s productive ability–an ability already long-proven and long-acknowledged even by its worst enemies. Persistent animosity toward capitalism today rests on moral, not practical grounds. Unless rational self-interest is understood as the one moral code consistent with genuine humanity, and the moral estimate of capitalism thus improves, socialism will keep making comebacks, despite its deep and dark record of human misery.

Dr. Salsman is president of InterMarket Forecasting, Inc., an assistant professor of political economy at Duke University and a senior fellow at the American Institute for Economic Research. Previously he was an economist at Wainwright Economics, Inc. and a banker at the Bank of New York and Citibank. Dr. Salsman has authored three books: Breaking the Banks: Central Banking Problems and Free Banking Solutions (AIER, 1990), Gold and Liberty (AIER, 1995), and The Political Economy of Public Debt: Three Centuries of Theory and Evidence (Edward Elgar Publishing, 2017). In 2021 his fourth book – Where Have all the Capitalist Gone? – will be published by the American Institute for Economic Research. He is also author of a dozen chapters and scores of articles. His work has appeared in the Georgetown Journal of Law and Public Policy, Reason Papers, the Wall Street Journal, the New York Times, Forbes, the Economist, the Financial Post, the Intellectual Activist, and The Objective Standard. Dr. Salsman earned his B.A. in economics from Bowdoin College (1981), his M.A. in economics from New York University (1988), and his Ph.D. in political economy from Duke University (2012). His personal website is

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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