Celebrate Capitalism This May Day

by | May 1, 2021

We should not only allow global capitalism; we should welcome it and foster it in every way possible. It is time to rephrase Karl Marx: Workers of the world unite for global capitalism; you have nothing to lose but your poverty.

A version of this article was first published in 2003. CM is republishing it because its message still remains relevant today.

May Day will once again be celebrated by left-wing and environmentalist protestors united by a single emotion: a virulent hatred of capitalism, especially global capitalism. Why the hatred?

The advantage of a global economy based on free trade and capitalism is so obvious and so enormous that it is difficult to conceive of anyone opposing it. The benefit is based on the law of comparative advantage: every country becomes more prosperous the more it invests in producing and exporting what it does best (in terms of quality, cost, uniqueness, etc.), and importing goods and services that other countries can produce more efficiently. For example, let us say that Nigerian companies can produce T-shirts for $1 a piece whereas U.S. companies can only produce them for $5 a piece. Under free trade, Americans will buy their T-shirts from Nigeria. This division of labor benefits people in both countries. Nigerians will have more money to buy food, clothing and housing. Americans will spend less on T-shirts and have more money to buy cell phones and SUVs, and the investment capital formerly spent on T-shirts will be put to more productive uses, say in the area of technology or drug research. Multiply this by millions of products and hundreds of countries and over time the benefits run into the trillions of dollars.

How, then, do we reconcile the incredible benefits of global capitalism with the anti-globalization movement? The protestors make three claims repeatedly. First, they argue that multinational corporations are becoming too powerful and threaten the sovereignty of smaller nations. This is absurd on the face of it. Governments have the power of physical coercion (the gun); corporations do not; they have only the dollar–they function through voluntary trade.

Second, anti-globalists claim that multinational companies exploit workers in poor countries by paying lower wages than they would pay in their home countries. Well, what is the alternative? It is: no wages! The comparative advantage of poorer countries is precisely that their wages are low, thus reducing the costs of production. If multinational corporations had to pay the same wages as in their home countries, they would not bother to invest in poorer countries at all and millions of people would lose their livelihoods.

Third, it is claimed that multinational corporations destroy the environments of smaller, poorer countries. Note that if 19th-century America had been subjected to the environmental legislation that now pervades most Western countries, we ourselves would still be a third-world country. Most of the industries that made the United States a world economic power–the steel, automobile, chemicals and electrical industries–would never have been able to develop. By what right do we deprive poor, destitute people in other countries from trying to create prosperity in the same way that we did, which is the only way possible?

All of these objections to global capitalism are just rationalizations. The giveaway, and the clue to the real motive of today’s left and their hangers-on, is that all their protests are against–they are anti-capitalism, anti-free trade, anti-using the environment for man’s benefit–but they are not for anything. In the first third of the 20th century, most leftists were idealists–they stood for and fought for an imagined, industrialized utopia–Communism (or Socialism). The left’s vision was man as a selfless slave of the state, and the state as the omniscient manager of the economy. However, instead of prosperity, happiness and freedom, Communism and Socialism produced nothing but poverty, misery and terror (witness Soviet Russia, North Korea and Cuba, among others). Their system had to fail, because it was based on a lie. You cannot create freedom and happiness by destroying individual rights; and you cannot create prosperity by negating the mind and evading the laws of economics.

Furious over the fact that their envisioned utopia has collapsed in ruins, the leftists now seek only destruction. They want to annihilate the system that has produced the very prosperity, happiness and freedom that their system could not produce. That system is capitalism, the system of true social justice where people are free to produce and keep what they earn.

The fact that free trade is now becoming truly global is one of the most important achievements in the history of mankind. If, in the end, it wins out over statism, global capitalism will bring about the greatest degree of prosperity and the greatest period of peaceful cooperation in world history.

We should scornfully ignore the nihilist protestors–they have nothing positive to offer. We should not only allow global capitalism; we should welcome it and foster it in every way possible. It is time to rephrase Karl Marx: Workers of the world unite for global capitalism; you have nothing to lose but your poverty.

Copyright 2003 Ayn Rand Institute. All rights reserved. That the Ayn Rand Institute (ARI) has granted permission to Capitalism Magazine to republish this article, does not mean ARI necessarily endorses or agrees with the other content on this website.

Edwin A. Locke is Dean's Professor of Leadership and Motivation Emeritus at the R.H. Smith School of Business, University of Maryland. He is a Fellow of the Association for Psychological Science (APS), the American Psychological Association, the Society for Industrial & Organizational Behavior, and the Academy of Management. He is the recipient of the Distinguished Scientific Contribution Award (Society for I/O Psychology), the Lifetime Achievement Award from the Academy of Management (OB Division), the J. M. Cattell Award (APS) and the Distinguished Scientific Contribution Award from the Academy of Management. He, with Gary Latham, has spent over 50 years developing Goal Setting Theory, ranked No. 1 in importance among 73 management theories. He has published over 320 chapters, articles, reviews and notes, and has authored or edited 13 books including (w. Kenner) The Selfish Path to Romance, (w. Latham) New Directions in Goal Setting and Task Performance, and The Prime Movers: Traits of the Great Wealth Creators. He is internationally known for his research on motivation, job satisfaction, leadership, and other topics. His website is: EdwinLocke.com

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.

Did you gain value from this article?

With over 9,000 articles online Capitalism Magazine is completely free. We rely on the generosity of our readers to keep us going. So if you already donate to us, thank you! And if you don’t, please consider making a donation today. One-off donations – or better yet, monthly donations – are hugely appreciated. You can find out more here. Thank you!

What do you think?

We are always interested in rational feedback and criticism. Feel free to share your thoughts using this form.

We will post responses that we think are of interest to our readers in our Letters section.

Pin It on Pinterest