In re-reading Professor Murray Rothbard’s wonderful essay, “Capitalism vs. Statism”, we were reminded that “capitalism” is a term invented by Marx and used by the Marxists. In contrast to this is the idea of the “free-market”, which arises naturally whenever men are left to their own devices, as in a peasant or jungle society. It needs no central planning, as each man produces or does what he has in abundance or trades his unique skills for the products of other producers, without any coercion. Any contractual disputes between producers and consumers are brought before the wise elders of the community or tribe, and settled.
So, this distinction set us thinking about whether we should use the term “capitalist” at all, and choose rather to employ the term “free-marketeer” in its place. Is not using a term coined by Marxists to describe the free-market playing into their hands?
Indeed, what image does the term “capitalist” conjure up in the mind? Does it not mean someone whose one drive is to acquire capital, or money? In other words, someone obsessed with money? In getting this term dispersed in wide-spread usage, the Marxists have achieved a popular view that capitalists are money-obsessed individuals.
Now, what does the term “free-marketeer” imply? Much more that someone who is money-obsessed. Firstly, it stresses that one wants freedom not only for oneself, but for the other party in the transaction. And also, one wants freedom for everybody else doing transactions, and making markets. Freedom for all! Not just for me. Secondly, it shifts the emphasis from the money-half of the transaction to the commodity-half of the transaction. In other words, the true free-marketeer is interested in the commodity he is either getting, or getting rid of in the market, much more than the money-half of the transaction. Certainly, the seller is very interested in taking receipt of the asking price in terms of cash, but that cash is almost always as a means to some commodity or service that the seller values. The wealthy seller may find it in the added security of having his cash balance just a little bit larger, and further away from bankruptcy; the hungry seller in the lentil sandwich he just bought with the proceeds of his last sale. But in both cases there is some value, be it the elimination of the physical discomfort of hunger or the psychological gratification of being slightly more financially secure, which makes it worthwhile for the seller or buyer to engage in his action.
This emphasis on the commodity and its implimentation by the new owner for some physical or psychological value is the real meaning of the “free-market”, not two parties to a transaction who are only interested in the capital-half of the transaction. Obviously, the buyer is far more interested in the thing or service he is receiving for his money rather than just his money, or he wouldn’t have spent it. Even when one is “forced” to sell or buy, it is always to achieve a desired physical or psychological need, be it bread or selling one thing to pay off the debt on another thing. So “free-market” implies not money, but action, i.e. the action to which the acquired commodity is put.
Now, it seems to us that Mr. Libertarian, Thomas Jefferson, saw this subtle distinction between physical property and the ends to which it is put. Jefferson, in our view, was a Renaissance Man; one of the greatest. In his life’s actions, one can see the intellect of the Renaissance Man constantly at work, whether he was approaching gardening and farming, the construction of Monticello so that the U.S. Mint could put it on the back of the nickel 180 years later, playing the violin, collecting and reading books, arguing for the Abolition of Capital Punishment in Virginia, or putting forth the most lucid case ever for the Natural Law philosophy of Libertarianism in his masterpieces, the Declaration of Independence and the Bill of Rights.
In earlier documents the phrase “Man is endowed with certain inalienable Rights, amongst which are Life, Liberty, and the Pursuit of Happiness” had read “Life, Liberty, and Property”. But we believe Jefferson had the amazing insight to make the Libertarian leap from mere “property” to the much larger cause or aim to which it is put, that is “the pursuit of happiness”. This insight directly correlates to Ludwig von Mises subjective valuation principle which is one of the major breakthroughs in economics of the Austrian School — that the value of anything is its subjective value to the owner or purchaser, and that value can never be predicted. No wonder all the other schools of economics could never ever figure out how to measure the value of an object; it cannot be done except subjectively. It can only be measured it terms of its psychological gratification and value to the property owner.
Now, Professor Rothbard in his essay breaks Capitalism down into two breeds: “state Capitalism” and “free-market Capitalism”. State capitalism is what we have in America and the West: the government and associated industries looting wealth from individual Capitalists, a form of Mussolini’s Fascism. “Free-market Capitalism” would be — well, no one really knows exactly what it would be like since it has never really existed except in remote peasant and jungle communities that are probably unknown to modern history. Free-market Capitalism’s days as a world economic system are ahead of it, in the future, and not in the past which has never known it.
Whether we should use the rather longwinded terms “free-market Capitalism” and “free-market Capitalist” every time we want to refer to Capitalism or the Free-Market, or whether we should comply with the Marxists by using a term they coined which, as we have pointed out, has prejudicial connotations, or lastly whether we should always use the term “free-marketeer” instead of “Capitalist”, is a hard decision which each Libertarian must make for himself. The subtle distinctions are probably beyond the comprehension (or interest) of most Socialists.
Hooooooooooooooooooooooooowwwwwwwwwwwwww! — Silverwolf