As someone who owns a (very) small business (obligatory self-promotion), I sometimes find it frustrating when people talk about capitalism solely as a tool for the greedy. Capitalism exists as a replacement for old systems that weren’t working as society became more complex, and remains a valuable way of running society.
I must first acknowledge those who have said these same ideas more eloquently and more profoundly, most importantly Hayek, whose books on the nature of the decentralized economy and the history of economics are terrific resources for understanding how capitalism works. I am not a professional economist, but I find myself on occasion engaged in conversation with people who have no understanding of the basic notion of capitalism, and who indeed feel that it is a great social ill. I find the exact opposite to be true: capitalism, when kept free of corruption as all systems must be, is an enabling tool for progress.
Why is this? Because capitalism is built on the notion of demand. There will always be times when people rely on cronyism or malice to get an unfair advantage (a problem likely more for ethics and governance than economics), but the fundamental reward of capitalism comes from service.
Continue reading “In Defense of Capitalism”