“The magnificent progress achieved by capitalism in a brief span of the spectacular improvement in the conditions of man’s existence on Earth — is a matter of historical record.” These words came from Ayn Rand. Rand continued by saying that “what needs special emphasis is the fact that this progress was achieved by non-sacrificial means.”
How true is this assessment? To answer this question, I add a quote with a similar opening claim, but with a different conclusion. “Every enhancement of the type ‘man’ has so far been the work of an aristocratic society — and it will be so again and again — a society that believes in the long ladder of an order of rank and differences in value between man and man, and that needs slavery in some sense or other,” thus spoke Friedrich Nietzsche.
Which is it? Has capitalistic progress required no sacrifice, or has it required slavery?
No one can deny that the capitalist system has made great achievements. But it has paid a high price with outrageous inequality. Ancient Sparta, feudal Europe and the antebellum American South also achieved great accomplishments, but they did so on the back of forced labor. Modern capitalism is merely a new stage in this pattern.
Capitalism necessarily entails a certain amount of just economic inequality, as the industrious are rewarded more than the idle. But the current system includes unjust levels of inequality. There is not nearly as much upward social mobility as libertarians suggest, as workers are systemically repressed.
To an extent capitalism is self-regulating. Bad business decisions are punished, and poorly-run businesses fail. Efficiency is the criterion of survival in a truly free market, granted of course that regulation ensures that companies do not mislead the public. Libertarians are apt to remind one that the market corrects itself quite well.
However, libertarians fail to consider what such corrections entail for workers. A business is not a democratic organization; bosses must act as authoritarian decision-makers, as the workers do not have the experience that a good boss has. But a problem arises when bosses make bad decisions because these decisions mean that the workers — who did nothing wrong and played no part in the bad decisions — lose their livelihoods.
This system keeps workers down and leads to the creation of a class of wealthy personages who have never worked a day in their lives, instead living off wealth earned by their ancestors. This system is rather rigid and unchanging because, as Alexis de Tocqueville wrote, “no more … [is] necessary to the … [worker] than physical strength without intelligence; … The master and the worker thus bear no resemblance to one another, and they differ more each day … Each occupies a place that is made for him and which he does not leave … What is this if not aristocracy?”
In capitalism, workers are reduced to mere tools in the production of capital. My great-great-grandfather was a manager of a coal mine in Western Pennsylvania. The miners were forced to live in company housing and shop in company stores. They were paid wages, but almost all of their money went back to the company through rent and grocery bills. This exploitation meant that the miners had no way of accumulating enough capital to escape this systemic subjugation.
Again, to quote Tocqueville, “[w]hat ought one to expect from a man who has employed twenty years of his life in the making of pinheads? … He no longer belongs to himself but to the occupation that he has chosen. It is in vain that laws and mores have taken care to break all the barriers surrounding this man and to open to him on all sides a thousand different paths to wealth; an industrial theory more powerful than mores and laws has attached him to a trade, and often to a place, that he cannot quit.” Laissez-faire capitalism has de jure upward mobility, but de facto there are only exceptional cases of rags-to-riches tales.
All human progress has required some form of aristocracy, but we have it in our power to prevent the oppression that has always attended it. There will always be the rulers and the ruled, but the current level of inequality is simply unacceptable, and it is unjust for this distribution to be based on birth rather than merit. We must not allow the top 1 percent to hoard more than 50 percent of the world’s wealth. This is simply something up with which we cannot not put. As Tocqueville warned, “[I]t is in this direction that the friends of democracy must constantly turn their eyes with anxiety; for if the permanent inequality of conditions and aristocracy ever enter the world once again, one may predict that they will come in through this door.”
