Why Capitalism

My support for capitalism is primarily based on moral and ethical grounds. That capitalism also is economically efficient is an added bonus to me. Its instrumental role in creating more wealth than alternative systems is great but even if that were not so, I would still support it because it is the only system that is consistent with individual freedom and choice.

Capitalism is based on private property rights and voluntary exchanges in free markets. It’s essentially an impersonal process — no one is giving out commands for people to follow — out of which emerges an order that is beyond anyone’s ability to foresee or improve upon (unless there is a benevolent, omnipotent, omniscient dictator who controls every single entity, which in our case we have not got.) This process leads to outcomes that are, in the words of the Scottish Enlightenment philosopher Adam Ferguson “the result of human action, but not the execution of any human design” (1782).

Are distributions of income and wealth obtained by this process fair? Since the distribution obtained itself is not the intention of any person or persons, we can only ask if the process which leads to the distribution is fair or not. Therefore if we agree that the process is fair, we can accept that the resulting distribution is fair.

Is it morally superior to other systems? I believe that a system that does not involve coercion is superior to a system that requires coercion of some by some others. Capitalism does not involve coercion, while socialism and communism cannot be enforced without coercion. Therefore I judge capitalism to be morally superior to collectivist enterprises.