IS CAPITALISM THEFT

 

 

In 1776, Adam Smith explained the economic success of Great Britain:

• That security which the laws of Great Britain give to every man that he shall enjoy the fruits of his own labour, is alone sufficient to make any country flourish.… The natural effort of every individual is to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, … capable of carrying on the society to wealth and prosperity.… In Great Britain industry is perfectly secure; and though it is far from being perfectly free, it is as free or freer than in any other part of Europe.

In How the West was Won, Rodney Stark demonstrated how poor policy makes for poor growth: 

• ...taxes were so confiscatory in France that, as Smith pointed out, the French farmer “was afraid to have a good team of horses or oxen, but endeavors to cultivate with the meanest and most wretched instruments of husbandry that he can,” so that he will appear poor to the tax collector. Writing to a friend back in France during a visit to England, Voltaire expressed his surprise that the British farmer “is not afraid to increase the number of his cattle, or to cover his roof with tile, lest his taxes be raised next year.

Society grows when the shackles are removed and free enterprise is enabled, while justice ensures the safety of property and wealth against seizure. In many nations, corruption continues stifle investment and growth, if the investor knows that his business can be taken away if it is successful. Stark writes that because of these factors, the USA became the world’s manufacturing dynamo:

• By 1900 the United States was producing more than a third (35.3 percent) of all the world’s manufacturing output, compared with 14.7 percent produced by Great Britain and 15.9 percent by Germany. By 1929 the United States dwarfed the world as a manufacturing power, producing 42.2 percent of all goods, compared with Germany’s 11.6 percent and Britain’s 9.4.

America boomed because of the laws and values it had inherited:

• The early American colonies came under English common law. Therefore, individuals had an unlimited right to property that they had legally obtained, and not even the state could abridge that right without adequate compensation. Eventually that became the basis of American property law as well. Thus, the state could not seize iron foundries as had taken place in China, although it could purchase them should that seem desirable—as the socialist government of Britain did when it nationalized most basic industries right after World War II (until government control of these industries proved so unprofitable that they were transformed back into private companies).

All such “reforms” are unsustainable because they kill human initiative and dreams of a better life. However, many now erroneously equate capitalism with theft, but is it theft? If I invest in fallow land to grow tomatoes, hire two workers to plant and harvest, do I now become a thief? Have I abused my help? How?