Tuesday, August 21, 2012

Of Capitalism I Sing


The driving force behind Western styled capitalism, “the force that through the green fuse drives the flower,” says George Gilder, the Walt Whitman of Capitalism, is – hang onto your hats here – altruism. Or, to put it in terms that might best arouse the fierce antagonism of socialists, progressives and “Occupy Wall Street” san culottes, the primary notes of capitalism are: methodological experimentation, creativity and a concern for others – not greed.
The very notion that altruism, a meeting of the wants and needs of others, rather than greed is the spark that sets the entrepreneurial spirit aflame is anathema to the ardent followers of Ayn Rand, the author of “Atlas Shrugged,” apart from the Bible one of the bestselling novels --  or, as some would insist,  polemical tracts -- of all times.
Miss Rand firmly insisted that altruism was a mark of the socialist mindset. The heroes of her novels are moved by an enlightened self-interest, crushed in totalitarian systems by an omni- incompetent state. In the aggregate, the pursuit of self-interest, coincident in the Rand view with the pursuit of happiness, transports the benefits of capitalism to mankind. It is precisely a creative self-interest, rather than a destructive altruistic itch, which must always be sternly resisted, that leads to a capitalistic social Eden.

The Randian vision is enticing, not least of all because its inbred atheism neatly swells modern perceptions, according to which even the ethical prescriptions that derive from religious views are a hindrance to happiness.  A true child of the Enlightenment, Miss Rand thought religion – “Surely you don’t believe in Gott?”she asked Bill Buckley – interfered with self-actualization and a objectivist view of man and the world.

Gilder, in a short piece in National Review, “Unleash the Mind,” offers a rebuttal to the post-modern view of capitalism as greed, incorporating all the while some of Miss Rand’s more cogent ideas.

He begins by noting that “America’s wealth is not an inventory of goods; it is an organic entity, a fragile pulsing fabric of ideas, expectations, loyalties, moral commitments, visions.” The notion that wealth is a static entity “of things that can be seized and redistributed,” a Marxian desideratum, is a “materialist superstition.”

And – prepare yourself -- here comes Whitman:


“It [Capitalism] stultified the works of Marx and other prophets of violence and envy. It betrays every person who seeks to redistribute wealth by coercion. It balks every socialist revolutionary who imagines that by seizing the so-called means of production he can capture the crucial capital of an economy. It baffles nearly every conglomerateur who believes he can safely enter new industries by buying rather than by learning them. It confounds every bureaucrat of science who imagines he can buy or steal the fruits of research and development.


“Capitalism is the supreme expression of human creativity and freedom, an economy of mind overcoming the constraints of material power. It is not simply a practical success, a “worst of all systems except for the rest of them,” a faute de mieux compromise redeemed by charities and regulators and proverbially ‘saved by the New Deal.’ It is dynamic, a force that pushes human enterprise down spirals of declining costs and greater abundance. The cost of capturing technology is mastery of the underlying science. The means of production of entrepreneurs are not land, labor, or capital but minds and hearts. Enduring are only the contributions of mind and morality.


“All progress comes from the creative minority. Under capitalism, wealth is less a stock of goods than a flow of ideas, the defining characteristic of which is surprise. Creativity is the foundation of wealth.”

And creativity, because it is “defined by information measured as surprise,” cannot be planned, which explains why the whole process of wealth creation is opaque to government leaders who attempt to manipulate – or worse, replicate – genuinely free markets. To vivisect the market “for redistribution is to kill it. As President Mitterrand’s French technocrats discovered in the 1980s, and President Obama’s quixotic ecocrats are discovering today, government managers of complex systems of wealth soon find they are administering an industrial corpse, a socialized Solyndra.”

The economy is a fragile but live and organic construct of knowledge, invention, and ceaseless change: “The reason capitalism works is that the creators of wealth are granted the right and the burden of reinvesting it. They join the knowledge acquired in building wealth with the power to perpetuate and expand it.”

Mr. Gilder quotes Richard Posner, an eminent judge, on the market economy to this effect: “’The market economy fosters empathy and benevolence, yet without destroying individuality,’ because for an individual to prosper in a market economy he must understand and appeal to the needs and wants of others” – which is, come to think of it, the very definition of altruism.

It was this golden perception, verified by every successful producer of goods, services and ideas who ever lived, that induced Mr. Gilder to write “Wealth and Poverty: A New Edition for the Twenty-First Century.”

And how does the capitalist garden grow? “Capitalist economies grow because they award wealth to its creators, who have already proven that they can increase it. Their proof was always the service of others rather than themselves.” Indeed, Steve Jobs, the founder of the most valuable American company of all time, often described himself as being “tied to the mast” of Apple Inc.
Post a Comment