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11A087
Freedom & Capitalism
by Jim Davies, 3/29/2011
Are these two things one and the same? - not quite. They relate closely, because in a zero government society I'm quite sure that free people would choose to interact in a capitalist manner, and so the great benefits of capitalism would be fully enjoyed; but some might disagree with that prediction. Free people might choose some other arrangement, theoretically. In any case we need to understand what capitalism is, for some today have towards it a virulent hatred. When we probe, it's clear that what people detest is better called State Capitalism, ie the close alliance between big government and big business - or better yet, just "Fascism." Easy to agree that such an alliance is deeply damaging to freedom and very unhealthy. True capitalism is what happens when a person saves some of what he earns, investing it in ways to make his work more efficient. Irwin Schiff explained it simply in his "How an Economy Grows and Why it Doesn't" at pages 3 thru 5; castaways invent a fishing net to raise their productivity. Savings can of course also be invested in ways to help someone else to produce more, in return for a share of his profits. For this to work powerfully, on a large scale as well as a small one, no government is required.
DiLorenzo emphasizes that for capitalism to work, it's essential to have a legal structure to secure property rights, and while it's a subtle point I part company with him there. Certainly, property rights are vital, certainly they must be enforcible - but a "legal structure" is not the way to enforce them - unless by that term one includes the kind of free-market justice system that will prevail in a zero government society; and I think DiLorenzo does not. He has in mind a written code of law, enforced by a limited government. That is the usual "classical liberal" ideal and while it would be far superior to what we have today, it is Utopian; that is, even if implemented, it can not survive. That can be proven theoretically, and we have two centuries of experience, much of which DiLorenzo chronicles in his book, to prove it conclusively in practice. Don't let that deter you from reading his book. The ways in which government has systematically hindered free capitalism, and thereby impeded progress and prolonged poverty, are presented in awesome, horrifying and convincing detail.
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As mentioned 
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it's that true form of capitalism to which he refers. Strongly
recommended, the book expands on the above definition of what the
subject means, then relates how it brought huge and sustained
benefit to America, from the first days after the Pilgrims
landed, to the present. In its first chapter, DiLorenzo quotes the 
