Note: This is an expanded version of my entry for the “What is Capitalism?” essay contest on Ayn Rand Institute Campus. The essay prompt was: “Why does Ayn Rand argue that the moral justification of capitalism does not lie in the claim that it is the best way to achieve the ‘common good’?” The maximum length for the essay was a mere 800 words, so I had to heavily edit my original draft for submission, (already brief at just over 1,000 words.) Here, I’m able post the essay without that length constraint. For the 799-word version, click here.

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Ever since the Enlightenment, there have been many attempts to justify capitalism–or a quasi-capitalist mixed economy—on the basis of its being the best way to achieve “the common good,” or “the public good.” For example, Adam Smith wrote that “By pursuing his own interest [a man] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.” Thus he implied that the public good is a valid concept and consideration. (1) According to the Internet Encyclopedia of Philosophy, Jeremy Bentham thought that “[Rights] ought to be made because of their conduciveness to ‘the general mass of felicity,’ and correlatively, when their abolition would be to the advantage of society, rights ought to be abolished.”

More common among modern conservatives and the moderate left, is the statement that regulated quasi-capitalism is “practical.” This statement is generally made without answers to the question: Practical for whom and to what end? The implied answer seems to be: For everyone and to any end. So this claim of practicality can be taken as an implied appeal to “the common good” as justification.

But Ayn Rand justified pure, laissez-faire capitalism on different grounds. She rejected “the common good” as an invalid, collectivist notion, and instead held that capitalism rests upon the principle of individual rights. This principle, in turn, rests upon the morality of rational egoism, which rests on the nature of man. Thus, the justification for capitalism as the proper governmental system for man starts with the nature of man as a living organism.

All living organisms must support their own lives by their own actions. Whether plant or animal, microbe or man. It is this self-sustaining, self-generated action of life that gives rise to values. Values are the things that living organisms pursue to keep themselves alive. It is only in reference to the maintenance of an organism’s life, as the ultimate basis, that anything can be evaluated.

Thus, it is only in reference to the maintenance of human life that a human governmental system can ultimately be evaluated. But in order to evaluate the effectiveness of any governmental system in the promotion of human life, we need to know the fundamental means by which man survives.

Plants survive by brute physical means: they automatically absorb sunlight, grow thick bark to ward off parasites, produce toxins to poison the ground for other plants. They survive without consciousness by adapting to their immediate environment.

Animals survive by using their consciousness to guide their actions. They find plants to graze on, other animals to eat, and good places to sleep. Non-human animals need their consciousness to survive, but also rely heavily on their physical adaptations to their environment, such as claws or blubber. They may survive as solitary creatures, like tigers, or they may survive communally, like bees. But whatever the species’ unit is, it must actively pursue values to remain alive and healthy.

Man too, must use his consciousness to pursue life-sustaining values. But he has a fundamental distinction among the animals: his mind operates conceptually and non-automatically. He has no instincts to guide him throughout his life. He does not act automatically on the emotion of the moment, but can choose to think conceptually.

Man cannot survive by simply adapting himself to his environment, but must adapt his environment to himself. He lacks the physical prowess of the other animals, but he can use his mind to make tools, shelter, clothing, to grow food and domesticate animals.

Man’s mind—his process of thinking—is his basic means of survival, and it is individual. People can’t telepathically share knowledge. Learning requires independent thought on the student’s part. Nor can people be made to genuinely believe conclusions by means of physical force.

So the fundamental unit of human life is the individual. If human beings are to live, rather than die—to flourish, rather than stagnate—they need to choose to use their own minds to support their own lives.

This is the basis of morality: Given that one has made the choice to live and flourish, rather than to suffer and die, what are the fundamental, universal values one must pursue as a human being?

Since I am here focusing on the case for a political system, I won’t go into detail about what morality requires. (More on that can be found in books such as The Virtue of Selfishness, Loving Life, and Ayn Rand’s Normative Ethics.) But the fundamental moral activity is the pursuit of one’s own life and happiness by means of actions based on rational thought.

In order to act on their own rational thought—their own independent judgments about reality—human beings need to be free from the initiation of physical compulsion by others. Among chosen human actions, it is only physical force that can stop, paralyze, or nullify the thought of an individual. A man’s thought (and life) is stopped if he is killed; his thought is stopped if his brain is destroyed by a club; his thought is paralyzed if the government prohibits his ideas from being expressed; his thought is nullified to the extent that he is prevented from acting on his own judgment.

The principle required to objectively implement the non-initiation-of-force principle in a societal context is the principle of individual rights. A right is, in Ayn Rand’s words, “a moral principle defining and sanctioning a man’s freedom of action in a social context.” It is the rights to life, liberty and property that enable man to be moral and thrive in a society, when they are enforced. This is because the enforcement of these rights protects man’s freedom of judgment and action in the pursuit of his own life and happiness. The protection of rights ensures that man has the free use of the fundamental tools of survival and happiness: his mind, his body and his property.

It is in the name of individual rights, not “the common good,” that Ayn Rand advocated for capitalism (laissez-faire.)

Rights, as guarantees of freedom of action, do not include so-called “rights” to food, clothing, shelter or medical care. One cannot have a right to things that are products of the effort of others, since such a “right” would be a coercive claim on those others that have produced those things. The attempt to enforce rights to others’ products is an infringement on the freedom of action of those others; that is, their rights to liberty and property.

Under capitalism, the government only has three basic functions: to provide the police, the military and the courts. The only laws that the government enforces are those that help protect individual rights. The government does not provide welfare, health insurance, retirement payments, or subsidies. Nor does it regulate business activity, (beyond protecting rights, prosecuting fraud and enforcing contracts.) Nor does it regulate interest rates, enforce an official currency, regulate housing prices, enforce its own standards on food, drugs or medical services.

Capitalism is a system designed to let those who produce wealth—those who use their minds to make valuable things—benefit from their own production. They are as free to benefit from their own productivity as they would be on a large island by themselves. Capitalism is not designed to let some people force others to pay for their lifestyle. Capitalism, just like a deserted island, is not good for people who are determined to leech off of others, when they could be productive.

If the woozy notion of “the common good” is translated into “the good of everyone in the country, irrespective of his goals,” then capitalism does not promote the common good. It enables those whose goal is the maintenance and betterment of their own lives, to actually sustain and improve their own lives. In this process, capitalism enables people who are willing, to donate to charities for those who are genuinely unable to sustain themselves. The abundance of created wealth allows for larger donations, without self-sacrifice on the part of the donors.

Thus, capitalism, by enshrining and protecting individual rights, would provide great potential benefits to mankind. But it is only the portion of mankind that is (or would be) willing to use their minds and produce values that would actually benefit from the system.

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(1) The Wealth of Nations, Book IV, Chapter II, p. 488-489

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Related Posts:

How to Show That Taxation is Robbery

Wealth is Created by Action Based on Rational Thought

The Nature of the Morality of Rational Egoism: Short Notes

Why Healthcare in the US is So Expensive, and What Can Be Done About It

An Objectivist Refutation of Anarcho-Capitalism (Market Anarchy)