from The Psychology of Liberty
CHAPTER FIVE: THE FORMATION AND IMPACT OF THE IDEAL SOCIETY
The Logical Political System: Self-Governing Capitalism
Since a free market is one in which individuals and their enterprises operate unimpeded by government, we now see what capitalism really means. We see that it represents the implementation of human nature, a combination of understanding a noncontradictory metaphysics, epistemology, and ethicsyielding a noncontradictory politics. The term capitalism has been defined as an economic system in which private owners control trade and industry. The only addition to this is that a free market should be absolutely free. No coercion should be used to negate human rights.
The only legitimate capitalistic system is one that does not permit anyone to initiate force. Of course, all governments are unfit due to their coercive nature. Government is the only entity intrinsically capable of creating and being a coercive monopoly.99 The U.S. Constitution, while being the best document at the time it was fashioned, is now mostly a mechanism that keeps government intrusiveness alive and expanding. Though the Declaration of Independence and the Bill of Rights were intended to put limits on government, they did not outlaw a coercive State.
Many of the exhaustive descriptions and duties of the three branches of government would not be a part of an objective political system. These branches chiefly have been used as crutches to maintain a government that upholds the use of initiatory force. The original earnest attempt to stabilize and limit a new government stressing human rights failed because of the nature of the task: One can never make a contradiction work, no matter how many safeguards and precautions one takes.
The formal executive, legislative, and judicial branches of the United States government were designed, in part, to foster complex checks and balances. They made government inefficient and less capable of allowing a few (or one, such as the President) to dominate its operations. Checks and balances may have prevented totalitarianism, but they could not prevent violation of individual rights. Our present Semi-Fascist Welfare State is quite far from the intentions of the Founders.
In a society of political justice, real checks and balances must be economic ones, in which moral individuals make rational decisions about the services they purchase. The companies from which they purchase services will be concerned with profits and hence with reputation. After all, to not be concerned with reputation is to jeopardize the profit-making ability of ones business. Only non-objective laws and governmental subsidies are able to grant businesses immunity from free market consequences.
From the essence of liberty found in the Declaration of Independence and the Bill of Rights, we must fashion a new system that finally frees humanity from unjustifiable coercive control and arbitrary power over others. Reality and the ideas identifying it determine the final, noncontradictory political system for human beings.
The name of this system is rather straightforward: Self-Governing Capitalism. Although Anarcho-capitalism has been used (among others) to name this system, it can obviously carry a detrimental connotation. The term anarcho denotes that the single entity, government, does not exist.103 Unfortunately, this term can be confused with anarchy, in which no or extremely few laws (to say nothing of objective laws) are enforced in society and, hence, much chaos and disorder arisesmuch injustice. Incidentally, anarchy tends to occur both among ungoverned societies and among unstable governments. Both lack a rudimentary understanding and practice of benevolent and beneficial relationships, which involve at least implicit acceptance of customary law. Instead of examining and re-thinking the ideas and psychologies involved in anarchy, people typically bring order by implementing coercive government.
By calling the ideal political system Self-Governing Capitalism, we also avoid the conceptual difficulty of explaining something by reference to what it is notwhich is the case with Anarcho-capitalism, that is, capitalism without coercive government. Self-Governing Capitalism is just that: a capitalistic society that governs itself, in which private enterprise subsumes the services of government.
The freedom to trade values solely on a voluntary basis is the precondition for the ideal society of justice. In such a society, individuals are at liberty to exercise their right to contract or not to contract with othershence freedom to contract and freedom from contract.4
Of course, even within this political framework, the values sought and traded will reflect the degree of logic people use. Only by thinking critically and conscientiously can we determine what will best benefit us. And the citizens who establish capitalism would honor primarily this method of thinking. Intellectual clarity and psychological health of the populace generate the values that ensure happiness and enlightenment. This is certainly the case in any age.
Many of the uplifting changes and marvelous improvements that will occur with Self-Governing Capitalism have been expounded in other books.e.g.,82,103,99,89,4,& 5 Some of these books focus mainly on how the system would work (its economic practicality), rather than why it is the only moral political system. Although the stance of this book is primarily a moral/philosophical one, some old (along with new) economic ground needs to be covered. This will clarify and reinforce some of the key effects (and causes) of the ideal society. The examples are given not simply to persuade or justify the case for Self-Governing Capitalism (i.e., to merely show that it works). They are provided to show once again that what is logical in theory is, by definition, logical in practiceand therefore practical. Again, what is moral is practical. And what works must be moral.
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