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Source link: http://archive.mises.org/12496/capitalism-socialism-and-libertarianism/

Capitalism, Socialism, and Libertarianism

April 16, 2010 by

There’s been a good deal of debate recently in libertarian circles about the word capitalism. Is it compatible with libertarianism? A synonym for it? Should we use it? For example:

As some of my posts linked above indicate, I find this debate extremely frustrating because the nature of the debate is rarely made clear. In that respect it is reminiscent of the interminable debates over gay marriage and thick v. thin libertarianism. On the gay marriage issue, it’s often the case that the arguments of gay marriage opponents boils down to opposition to the word marriage being used by the state in the caption in the statute, though they usually won’t come clean and admit it. In my view (not shared by all my fellow libertarians), the thick-thin paradigm adds nothing of substance and is used to equivocate–engaging in non-rigorous argument about what “libertarianism” “is” semantically and then using this to argue for one’s particular substantive positions; it’s like trying to prove that marriage implies slavery or wife-ownership because the word “my” is used in “my wife.”

The libertarian opponents of “capitalism” often engage in equivocation, I believe. If challenged they say they are just opposed to the word, as if this is a semantic or maybe tactical/strategic issue. But because of confused leftist beliefs, many of them are actually opposed to aspects of the underlying social order that we anarcho-libertarians refer to as (non-corporatist) “capitalism”–the modern industrial free market. They oppose “absentee ownership” (see my post A Critique of Mutualist Occupancy), favor localism and self-sufficiency, are leery of the division and specialization of labor, buy into Marxian ideas about “alienation” and “labor”; they accuse standard libertarians of putting undue stress on “capital” while they do the same with “labor” and “the workers”; some flirt with crankish Georgist ideas, and so on. Some of the opponents of the word “capitalism” seem to have genuine strategical or even semantic concerns, such as Sheldon Richman, instead preferring the term “free market.” But some of them seem to oppose even this term–preferring instead the bizarre and annoying term “freed market,” or outright opposing the word “market” in the phrase “free market” (see Markets vs Free Markets).

In my view we should separate the semantic and strategical debate from a debate about substance. Conflating these leads to dishonest argumentation, confusion, and equivocation. On the substantive issues, we can have that debate; I think “left-libertarianism” is a confused project. To the extent it is correct, it is just standard libertarianism and adds little new; see my post Wombatron’s “Why I Am A Left-Libertarian”, noting: “yes we need to be aware that modern day ‘big business’ is not pure; it’s too in bed with the state (as Rothbard, say, recognized long ago in criticizing Rand’s bemoaning of Big Business as being America’s most persecuted minority). Yes, corporatism is bad. Yes, “big business” is often in bed with the state. We know this. And to the extent left-libertarianism says things standard libertarians do not say qua libertarians, then it is either wrong, or incompatible with libertarianism, or, at best, compatible but completely orthogonal to it as much as one’s religious or recreational or cultural preferences are outside of libertarianism (see why the “thick-thin” debate can worm its way in here by unduly and unnecessarily expanding what libertarianism “is”?). In my view, we libertarians are neither left nor right; both left and right are confused, wicked doctrines. We are better than both of them. Which one is “more” evil is a question that may have no answer; from the libertarian point of view, both are wrong, which is why we have an original, fresh, consistent, and radical view focused on individual rights. But my point is not to debate this here. The point is that it’s a substantive debate. It won’t be solved one whit by pointing out that the word “capitalism” was originally attached to us by our enemies as a pejorative.

So to my mind, the only legitimate debate about using the word “capitalism” is a semantic one, or perhaps a strategical/tactical one. As for semantics, this is not really an interesting debate. As a semantical matter, “capitalism” technically means a system with private ownership of the means of production. This is true regardless of its origin, and regardless of whether corporatism is prevalent in the West. It is at least arguable that “a system of private ownership of the means of production” is an acceptable definition of “capitalism”. So much for the semantic issue. If this is what the word means, is it a synonym for libertarianism, as Rand, Friedman, and other founders of modern libertarianism used it; or at least for “free market”? Is it at least compatible with libertarianism? It seems to me that capitalism should not be used as a synonym for libertarianism. For this reason in the last few years I tend to refer to myself as an anarcho-libertarian instead of anarcho-capitalist. I believe capitalism–especially if it is made clear that it does not include corporatism–is closely associated with libertarianism in that it describes the free market in any libertarian society above a primitive level. That is, libertarianism supports property rights, which clearly imply a free market, so long as men engage in trade; and a free market is characterized by capitalism since the means of production (if there are any) are of course privately owned. This is true even of the left-libertarians’ kibbutzes, communes, and coops–such arrangements are simply voluntary coownership which is just one type or application of private ownershp rights.

What about tactical or strategical concerns? This one has more weight. The West is often referred to as “capitalist” because it allows a much higher degree of genuine capitalism than have other countries. Yet because the western states have never been fully libertarian, there has been a large and growing degree of corporatism or mercantalism. Thus in popular usage “capitalism” has some corporatist connotations. If we call ourselves capitalism we may mislead outsiders and open ourselves to unjust criticism. This is one reason I tend to say anarcho-libertarian instead. But so long as we are clear that we mean laissez-faire capitalism, or to condemn corporatism, mercantalism, and protectionism, I see nothing wrong with using the term capitalism to describe an important aspect of libertarian theory and society. Due to the constant drumbeat of the left-libertarians, there is a temptation to just give them this one. To stop using the word. To retreat. But we have to be careful in siding with them on their ostensibly “semantic” battle. In my view, we standard libertarians do not want to give the impression that we agree with the leftists’ substantive attacks on (laissez-faire, Lockean, private-property, modern, industrialized) capitalism. That debate should be a separate one, not mired in semantics.


DixieFlatline April 16, 2010 at 1:19 pm

Brilliant.I remarked to Wombatron a long time ago that left-libertarianism (and as you noted, its sympathies with Marxism and Georgism) is an anachronistic venture, worried about who sat on which side of the legislature, and what terms meant 200 years ago (see the recent Charles Johnson/Lee Doren debate snorefest). While it is interesting historical trivia, it has very little to do with the development or promulgation of ideas.

As I noted in another blog comment, ideologues make poor marketers. In the aforementioned debate, Johnson tried to explain that using what seem to be to counter-intuitive terms (to the listener) are useful for initiating a dialog. As someone who markets for a living, I can say with confidence that confusing the listener/reader may work some of the time (like a stopped clock being right twice a day), but will almost always will yield a poorer result than being clear and reinforcing.

Ron Paul has proven that these ideas are infectious, exciting and powerful. They don’t need a complicated or intricate delivery. They do not have to be delivered by demagogues and skilled oratory. They don’t require sophisticated arguments about historical context. They certainly benefit from the absence of obfuscation and rhetorical tricks of redirection.

The appeal of revising language appears to me to be, that it keeps everyone talking about the superficial and not talking about and acting on ideas.

Brian Drake April 16, 2010 at 2:32 pm


I can appreciate your point. And in a way, that’s an element of libertarian philosophy that appeals to me intensely, it’s brilliant simplicity.

Libertarianism has the selling-point in its name: Liberty

And liberty functionally means only one thing: self-ownership

That’s it.

You’re a libertarian if you believe you-own-you and I-own-me. Period.

That’s a pretty simply sell, is it not? No historical context or understanding of economics necessary.

If you can convince someone of self-ownership, and they really buy it, then all else follows fairly easy for the rest of the philosophy is simply an exploration of the self-evident nature of liberty and the practical application of it. Of course, that’s where you encounter a lot of “buyer’s remorse” and the exposure of false “converts”. When a follow-the-idea-to-its-logical-conclusion investigation reveals that self-ownership is incompatible with theft, slavery, murder, and fraud, the true character of the person is laid bare. Which do they value more? Liberty, or what they can obtain by aggression against others?

Michael A. Clem April 16, 2010 at 1:45 pm

What could be more anarchistic than language itself? It is the users of the language who decide what a word means. The best advice is the often-used phrase, “know your audience”. Are you talking to a friend, a co-worker, a stranger at a fair; are you speaking on the radio, posting on the internet, writing a letter to the editor? Different audiences will have a slightly different understanding of the terms you use.

Brian Drake April 16, 2010 at 2:23 pm


This is an excellent point (language is the ultimate proof of anarchy). Language is not absolute, it’s a bunch of arbitrary noises and squiggles that we’ve collectively attached meaning to. Just as all value is subjective, ultimately, language is subjective. That there is a high-degree of commonality in our individual subjective evaluations of those arbitrary noises and squiggles doesn’t change the subjective nature of language. In fact, the high-degree of commonality is further proof that it is human nature to mold one’s values to be compatible with others out of a desire to exchange (supporting the fact that order is a spontaneous result of voluntary society).

So I definitely agree choosing words that communicate with the intended audience is more important than “sticking to our guns” over a certain semantic quibble.

The caveat is that this must swing both ways. As it is wise to choose words that truly communicate our ideas to a specific audience, it is dishonest to use one subjective understanding of a word to falsely accuse another for using that word though they define it differently.

If those on the “left” want to use capitalism to refer to corporatism and reject that, that’s fine. But when they then criticize libertarians for supporting corporatism because we use the word capitalism, knowing full well that by capitalism we mean “the ‘system’ of voluntary exchanges between self-owning individuals (knowing full well because we are not ambiguous in defining our terms) — something fully incompatible with corporatism, that’s just lying.

I think it was Voltaire who said “if you want to converse with me, define your terms”. As long as someone will honestly and consistently apply their definitions, I have no problem adapting to their vocabulary for at least the duration of a discussion. It’s the “bait-and-switch” people who really piss me off.

Deus X. Nihilo April 16, 2010 at 3:25 pm

Well, I guess one up side to this is that in labeling their ideas LEFT-libertarian–which you hold to be confused and wrong–there’s no chance of yourself being confused with those ideas. At least they did you the courtesy of adopting a distinctive label that seperates them out from the rest of the libertarian movement.

I rather wish other libertarians would start doing this–I think it would help the rest of the world sort out all the different movement subsets there actually are, rather than just casually assuming that because Neal Boortz calls himself a libertarian, all libertarians agree with Neal Boortz (to use one extreme example).

Russ April 16, 2010 at 4:34 pm

The only problem with so-called “left-libertarianism” is that it isn’t libertarianism at all. It’s just a repackaging of the tired old “property is theft” variant of anarchism of 100+ years ago. Just because it’s anti-state, that doesn’t mean it’s libertarian.

I agree with SK on the idea that we shouldn’t retreat, and allow the leftists to frame and define the terms of the debate. In fact, when I am in a discussion that allows me to define my terms, I call myself a liberal, then explain that I mean a liberal in the classical Misesian sense of the word, in a possibly Quixotic attempt to take the word back.

Deus X. Nihilo April 16, 2010 at 5:08 pm

Who in the modern Libertarian Left says that “property is theft”?

Stephan Kinsella April 16, 2010 at 11:33 pm

Russ, I think most soi-disant left-libertarians are very libertarian. Consider Roderick Long and Sheldon Richman. Both extremely principled, great libertarians. I just think for them left might describe some of their (a-libertarian) personal preferences, or some of their emphases in their libertarian interests or research. I think it’s a confusing and misleading concept, but that’s no crime.

Nihilo — well those libertarians and mutualists who advocate some kind of occupancy rule, and who maintain that a landlord or employer loses ownership of his own property to his tenants or employees because he is “absent” do in fact maintain that the societal recognition of the landlord/employer as owner of his property is theft from the tenants/employees, who have a better claim to it.

Michael A. Clem April 16, 2010 at 4:40 pm

Actually, they don’t tend to call themselves “left-libertarian”, but anarchist or libertarian, and objecting to us “right-libertarians” or anarcho-capitalists for trying to appropriate their terms…

Stephan Kinsella April 16, 2010 at 11:28 pm

Well what other types are there? Most people that the left calls “paleo” or “right” libertarians are not. I am not. Most Misesians are not. We are just standard libertarians. We properly condemn the right as much as the left.

There are minarchist and anarchist libertarians; in my view anarcho-libertarian is redundant because libertarianism implies opposition to the state; a minarchist is not a full libertarian. In any case, they usually adopt these labels to specify which they are.

Other than these labels what other groups do you think need especial naming?

Anthony Clair April 16, 2010 at 3:36 pm

“What could be more anarchistic than language itself?”

Great point, Michael. This idea follows closely with some insight a classmate of mine offered in a discussion a few days ago. We were discussing the Lawrence v. Texas Supreme Court case, which effectively banned state legislatures from imposing anti-sodomy laws in their states (thank goodness, and finally), and she said, “This all seems so arbitrary. The laws are just words that a select few write down, and the Supreme Court is an even smaller group that decides our fate based on their opinions and interpretations.” Despite the State’s attempts to establish never-ending laws and regulations, people’s preferences for changing language will always trump their arbitrarily established rules. It’s a very ironic idea – the State has no option expect to try and establish its foundations using anarchistic devices.

I think it’s unfortunate that words like “liberal,” “liberty,” “freedom,” “capitalism,” and even to a certain extent “laissez-faire” no longer carry the same widely accepted definitions they did decades and centuries ago. Too often I hear highly educated, seemingly at-least-partially wise people proclaim the perils of our “free-market” system, and how the hands off approach of laissez-faire capitalism has proven itself to be an awful, innefficient, unfair system that breeds greed and egoism.

To me, people who have treated themselves to some Mises, Rothbard, Hazlitt or any other Austrian by the time they hear such utterances should find very little difficulty in confronting the speaker and explaining his or her errors. But perhaps the most important task is to be comfortable using whatever words will work in the conversation. If one has to define self-ownership, the non-aggression principle and voluntary action as “Tallahassadoogyism,” so be it. Besides, that tends to lighten the mood.

Brad April 16, 2010 at 3:56 pm

The only reason I question the use of the term capitalism is that it has been too polluted – both by those we don’t like it all and those Statists who have co-opted the term to mean the corporo-fascistic economic model that we actually have (and meant to). Unfortunately in the sound-bite world we live in we don’t have time to explain that what we mean by Capitalism is x, y, and usually z, not the 1,2, and 3 that it is said to be – you have lost the audience’s attention span.

If it’s a debate between right-libertarianism and left-libertarianism, absent the use of Force, it then really is just a matter of how an individual chooses to live their life and the voluntary associations they choose to make.

Stephan Kinsella April 16, 2010 at 11:29 pm

I don’t think there are many “right” libertairans if we are talking about anarcho-libertarians. We are neither right nor left.

Aubrey Herbert April 17, 2010 at 8:21 am

“In my view, we libertarians are neither left nor right; both left and right are confused, wicked doctrines. We are better than both of them. Which one is “more” evil is a question that may have no answer; from the libertarian point of view, both are wrong, which is why we have an original, fresh, consistent, and radical view focused on individual rights.”


Vanmind April 20, 2010 at 12:04 am

Use of capital is not optional in any society, therefore it is the self-professed “socialists” who must abandon that ridiculous term to start using various forms of “capitalism” (e.g. State Capitalism, Minarchist Capitalism, Free Capitalism, etc.).

Michael Duffield October 14, 2011 at 12:53 pm

I would be what you would term a left-libertarian. However, I personally would use the term libertarian-socialist. I would argue that you have understated the socialist definition of capitalism. It is not merely that private ownership of the means of production defines capitalism, but that the ownership is distinct from the laborer. Imagine a craftsman, who owns his tools. Under capitalism he is entitled to 100% of his production, because he receives the share of his labor and the share of his capital. Socialist critiques of capitalism center on the idea that now the craftsman has become a laborer and rents his tools from the capital owner. Just as classical economists criticized landowners for rent seeking behavior, a socialist can be critical of the capital owner for rent seeking behavior. So, I am equating profits with rents. I know that I will be roundly booed for this assertion, but it does not deter me. For, I am free to speak my belief. One must remember that the socialism promoted by libertarian-socialists is not the Marixst-Leninism of the former Soviet Union. This construct of an invasive and overbearing state is an affront to all forms of libertarian thought. It is to be remebered that the original intent of socialism was to remove economic power as a hindrance to liberty by creating equality.
As to John Locke’s ideas in relation to property rights. Locke believed that individuals owned themselves and the product of their labor. To him, ownership of property came about because the owner improved the land or some resource, embedding it with his own labor. Thus, gaining possession of it. Evidence that this is how Locke’s ideas were historically interpreted can be seen in the Homestead Act that required a land claim to be lived on and improved for five years to be valid. Of course, Locke’s position does not explain how that ownership can then be inherited, as the heir may not have any embedded labor in the property and this would refute his ownership claims, or make Locke’s premise invalid. Additionally, Locke’d ideas cannot justify the ownership of anything by a corporation. Despite, the Supreme Court ruling that a corporation is a legal person, they cannot perform labor. Rather, they purchase labor. Now, if embedded labor creates ownership by the laborer, then corporations have a real issue.
It is true that modern libertarian-socialists own communal property by choice. This is not an endorsement of private property, but rather a necessity to exist within the greater capitalist society. Long is the memory of the Enclosure movement, when the commons were carved up and taken from the people, who had been using and improving them for centuries.
I am not an advocate of banning private property. But, I believe that private property creates a need for a large state to enforce and secure it. Thus, private ownership invites a restriction of liberty as a trade off.
Peace, Liberty, and Equality

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