Even the recluse buys groceries, clothes, perhaps tools. He interacts with stores, even if little else. He trades, because trade is hugely mutually beneficial. Engaging in some trade can dramatically raise one's standard of living from abject poverty to first world comfort.
Cooperation is hard. Good intentions are not enough. Good ideas are required.
People make mistakes all the time. This can make cooperation fail. It can lead to fighting.
Not fighting with people makes life much better.
Some types of cooperation, such as buying items in stores, have become common sense. Everyone in our culture learns how to do them. They now appear simple and easy to us. Regular people are able successfully to do them thousands of times without fighting.
They aren't actually inherently easy. We're just good at them.
Some types of cooperation, such as marriage, fail frequently. When methods of interacting with other people do not work, they should be changed.
Many excuses have been made for fighting. Even wars for conquest have been defended and justified.
Fighting is fundamentally bad because it is irrational. If two or more people disagree about something, fighting is not a way to find out the truth of the matter.
If people disagree about who should rule an area of land, or anything else, shooting at each other cannot discover what's best.
When disagreements are settled by force then truth does not govern the outcome, instead brute force decides. Fighting is the "might makes right" approach.
Everyone should always want to figure out the truth, which is best for everyone, and do that.
It is never necessary to sacrifice, or hurt anyone else, in order to solve one's problems. Rational men do not have fundamental conflicts of interest which require them to fight each other. Cooperating is always possible.
The name of the rational way of thinking which has brought peace and prosperity to Western civilization is liberalism.
Liberalism is the political philosophy of freedom, individualism, capitalism, world peace, cooperation, voluntary action, tolerance, diversity, reason, global free trade, and social harmony. Liberalism opposes fighting and unreason.
Liberalism has never been thoroughly understood by most of its supporters. A lot of people live in a pretty liberal way, but couldn't explain it very well.
Even most philosophers who try to explain liberalism haven't done a very good job. They make mistakes. It's difficult.
The truth is never obvious or easy. When an idea seems obvious, that just means one already learned most of it in the past. Most of the ideas people think are obvious are the ideas which our culture teaches to everyone and does not question.
Like all ideas, liberalism isn't obvious. It's pretty hard. Hard does not mean unpleasant. It means it is easy to make mistakes and there is a lot of stuff to learn.
Common sense cultural knowledge helps people live in a liberal way, but it is not perfect. It contains mistakes and it leaves things out. Understanding liberal ideas is valuable in order to help deal with those mistakes and omissions.
As long as one's knowledge isn't causing problems, then it's good enough for now. But when problems are encountered, then better knowledge is desirable because it can help deal with more issues.
Understanding liberalism well can help us be adaptable and let us cope with unexpected situations. If we understand general principles, we can apply them to problems ourselves to get answers, instead of needing to know the answers in advance from our culture.
There are no good objections to liberalism itself. There are no compelling arguments for war against peace, or for fighting instead of cooperating. There is nothing known to be wrong with free trade, freedom, and voluntary action.
Often, people object to specific liberal ideas, such as school vouchers. Or they advocate something anti-liberal like restricting the freedom to smoke. Prohibition is another example. A major reason this happens is that people on both sides do not understand how these specific issues relate to liberalism in general.
School vouchers are a liberal reform because they help give people more freedom to choose a school, and they are more tolerant of people who are dissatisfied with their assigned school.
People object to smoking because it can cause cancer. Smoking is often a mistake. They focus on this without realizing that restricting freedom is not a wise way to deal with mistakes. Restricting freedom does not persuade anyone of better ideas, or teach them how to use better judgment.
Prohibition was similar. People decided alcohol was a mistake, and then they decided to ban it. But banning mistakes is not the way to make a better world. Freedom, including the freedom to criticize mistakes, is how a better world is achieved.
People usually don't like to say it out loud, but they may still wonder: what's so good about freedom? What do people need multiple options for? All but one of the options are worse than the best choice. Freedom is freedom to make mistakes.
Many people think that freedom is good because they and their friends like being free. They like strawberries too. But they don't want too many strawberries, and will trade some for raspberries. So, too, they may think that some freedom is enough, and sometimes freedom should be traded for other nice things.
What's so great about freedom? The key fact is: when people think something is a mistake, they might themselves be mistaken. What's needed is a system that allows for unlimited progress. Don't just stop after a few ideas are figured out and base society on those ideas. Allow for continual improvement.
All good ideas that are improvements start off as minority opinions which most people think are mistakes. First, one single person thinks of it. It takes a while to spread. And because it contradicts what many people think they know, they disagree with it.
If we ban everything that most people think is a mistake, we will be banning not only a lot of bad ideas but also the brilliant new ideas that could improve the world.
If freedom is restricted, some of the most valuable freedoms are some of the first to be lost, because only a small minority of people use them. Freedom to have popular ideas is never in danger, but the unlimited freedom to have unpopular ideas sometimes is.
Cutting edge ideas are always unpopular before they become more widely known. And the ones that improve on deeply cherished traditions are offensive to some people.
Freedom means everyone can try out the ideas they think are best. It means they can disagree with each other. It means tolerating diverse ways of life. It means a person only gives up an idea when he decides it is mistaken, not because someone else orders him to.
Freedom means freedom to use one's mind and judgment.
It's not rational for a person to change his mind unless he understands why the new idea is better than the old one. If I think someone is making a mistake, and I want him to change his mind, the rational thing for me to do is to explain to him a better idea, and why it is better.
If I try to explain to someone why an idea is better, but he doesn't think my explanation is correct, then he should not change his mind. It might be his fault for not understanding. But it also might be my fault for not explaining well enough.
Or maybe he has the better idea, but he isn't explaining it to me well enough, or I'm not understanding it well enough. It could I who is mistaken. When people or ideas disagree, there is no simple way to assign blame or automatically know the truth.
When I try to persuade someone, but he is not persuaded, that does not mean he's a bad person who should be forced. It means that more knowledge is needed. We should either try more or, if we don't find that productive, then we could leave each other alone and go make progress in other ways.
There is a fundamental symmetry when people disagree. I disagree with him. And he disagrees with me. Freedom means that each person can think for himself. Restrictions on freedom always mean that some disagreements are approached by using force against one side without explaining to them (to their satisfaction) why they are mistaken.
Force is the opposite of persuasion. Persuasion is a method of approaching disagreements which is capable of discovering mistakes, correcting mistakes, and improving knowledge. Force is not.
As _The Beginning of Infinity_ by David Deutsch points out in chapter 10, knowledge is created by persuasion. "HERMES: Suppose I were to tell you that all knowledge comes from persuasion." Force opposes perusasion. Thus, force is an opposite to knowledge creation, and freedom a requirement of knowledge creation.
When alcohol is banned, policemen with guns will use force to stop people. A lot of the time the threat of force is enough. People don't want guns pointed at them, so they try to obey. Threatening force isn't more rational than using force. It's dealing with disagreement in a non-truth-seeking way.
Obedience is not rational. What's rational is to use one's mind to try to find the truth and to improve on mistakes. Threatening people who do not obey, or who disagree, hampers progress.
Liberalism, by promoting freedom, tolerance, peace, cooperation, voluntary action, and so on, is the rational political philosophy. It is the political philosophy with deep connections to epistemology.
-- Elliot Temple
http://curi.us/
Why do the ideas of liberalism and freedom seem to be at risk so often despite ample evidence that they lead to progress?
Are universal ideas and those with tremendous reach more prone to denial, at least in a piecemeal or partial way? Or is it that universal ideas, when denied, even partially, demonstrate their reach by such wide effects.
I am struck by the common notion that "too much freedom" can be such a bad thing that must be regulated. Many people seem frightened by the universal nature of freedom. Many seem quick to embrace it to a point, but almost as quickly deny it beyond that point.
I am curious why so many people seem resistant to liberalism as you describe it. I agree with your ideas on liberalism and freedom. I think that a theory on why there seems to be so much resistance to it could be helpful in persuading those who embrace it only partially.
John Campbell
On Sat, Jul 23, 2011 at 7:48 PM, Elliot Temple <cu...@curi.us> wrote:
*snip*
Liberalism, by promoting freedom, tolerance, peace, cooperation, voluntary action, and so on, is the rational political philosophy. It is the political philosophy with deep connections to epistemology.
-- Elliot Temple
http://curi.us/
Why do the ideas of liberalism and freedom seem to be at risk so often despite ample evidence that they lead to progress?
Are universal ideas and those with tremendous reach more prone to denial, at least in a piecemeal or partial way? Or is it that universal ideas, when denied, even partially, demonstrate their reach by such wide effects.
I am struck by the common notion that "too much freedom" can be such a bad thing that must be regulated. Many people seem frightened by the universal nature of freedom. Many seem quick to embrace it to a point, but almost as quickly deny it beyond that point.
> Why do the ideas of liberalism and freedom seem to be at risk so often
> despite ample evidence that they lead to progress?
Evidence is always open to interpretation. It's the arguments that are more important.
> I am struck by the common notion that "too much freedom" can be such a bad
> thing that must be regulated. Many people seem frightened by the universal
> nature of freedom. Many seem quick to embrace it to a point, but almost as
> quickly deny it beyond that point.
Because they are happy for people to be free to do everything in the wide range of stuff they are willing to tolerate, and nothing else.
> I am curious why so many people seem resistant to liberalism as you describe
> it. I agree with your ideas on liberalism and freedom. I think that a theory
> on why there seems to be so much resistance to it could be helpful in
> persuading those who embrace it only partially.
I think liberalism has never been understood very well. Most people don't understand *what problems it aims to solve* clearly, nor how it solves them, nor what its positions and arguments are.
I think more specific mistakes, such as communism, are secondary. If people understood liberalism well they could easily see why communism is mistaken.
Ludwig von Mises claims liberalism had more sway in the world in the past. I think he's wrong.
No doubt Mises is correct about various details. Some anti-liberal policies we have now did not exist in the past. Some pro-liberal policies from the past have been changed. But on the other hand, the past had all sorts of bad things, including anti-liberal policies, that we don't have now.
Rather than focus on policies, I'm more inclined to look at the history of ideas, and the understanding of liberalism. It is with regards to philosophical understanding (especially by the bottom 99.9%) that I think liberalism never got all that far, and isn't doing any worse today.
Most of the well known liberal philosophers are not really very good. They make a ton of mistakes.
John Locke had very popular and very anti-liberal ideas about the education of children. And I haven't been impressed by his political writing either. Perhaps it was good for the time an improvement on what came before, but I'm more concerned with objective standards. Objectively I don't think his writing is clear and easy to understand enough for most people to get it, nor do I think his arguments are good enough.
John Stuart Mill has been praised a lot for On Liberty. But how good can it be if didn't even persuade Mill himself of liberalism? Mill became one of the best (or worst, you might say) advocates for socialism. (This is according to Mises, who was a very well read expert on this kind of thing.)
In 1789, the best liberal political party in the world was the whig party in England. But when Edmund Burke told them that the French Revolution was a bad idea, most of the party did not understand his ideas and arguments. He considered himself to be pretty much alone for years before he (or perhaps more accurately, the bloodshed in France) finally started convincing some people.
If it takes widespread violence for people to oppose the French Revolution, then we can infer some things about their philosophical understanding of liberalism. It is crude. They don't like gruesome violence and that's good. But they don't have a good grasp of more subtle issues.
The most important liberal thinker is William Godwin. He was the first person to have a good understanding of persuasion, and its connections to fallibilism, rationality, and the use of force. He is virtually unknown. And many of the people who do know about him mistake him for a socialist, left-wing anarchist, and sometimes also a French Revolution supporter. This is bizarre and not historical. Godwin favored free trade and his favorite person was Burke. Burke persuaded Godwin of liberalism. Yet somehow people categorize Godwin very differently than Burke.
How well can liberalism be understood if people haven't noticed its best advocate? If they can't even recognize the value of _Political Justice_? Godwin's obscurity is because people do not understand the ideas well.
Instead names like Thomas Jefferson and Thomas Paine get attention. They were both radical utopian advocates of violence, not liberals. People have a hard time even understanding who is and is not a liberal, and what is and is not a liberal policy. Without knowing what conclusions liberal arguments argue for, they are hard to understand!
My explanation of liberalism is different than any previous explanation. I regard it as better. I focus more on connections with epistemology, which have been often discussed in little pieces but which I don't think are well known. Mises and Rand had the weakness of not being Popperians. Popper and Hayek had the weakness of not being fully in favor of capitalism and free trade. And worse than that, none of them were Godwinians.
I also think it's important to make one's writing simpler than any previous liberal philosopher has managed. Ideas are hard for people. The difficulty of understanding ideas is a lesson of fallibilism. And it's a lesson of the Popperian way of understanding communication. More details about communication can be found in BoI (e.g. the example of Socrates and friends misunderstanding the directions they received), all throughout Popper (but generally in ways people could miss), and it's discussed here: http://fallibleideas.com/communication-is-hard
Another reason people don't like liberalism is that the open society involves individual responsibility, which is hard. Popper talks about this some in his book _The Open Society and Its Enemies_.
Another issue, as Randal pointed out, is that people don't understand how free market competition is compatible with cooperation, and how capitalism promotes cooperation. This fits with my theme of people not understanding liberalism.
Ayn Rand addresses the conflict topic well in _The Virtue of Selfishness_, chapter 4. She goes over an example of two people applying for (and competing for) the same job. William Godwin addresses the topic implicitly. Mises discusses liberalism and cooperation in his book _Liberalism_.
Offhand, I don't know more published good answers. I don't think the answer is well known, especially to the people who think of Rand and Mises as too extreme and don't read them carefully (and who have never heard of Godwin). So there is a shortage of enough published explanations and arguments being read by most people.
-- Elliot Temple
http://beginningofinfinity.com/discussion
>________________________________
>From: Scepticos <scep...@gmail.com>
>To: beginning-...@googlegroups.com
>Sent: Sunday, 24 July 2011, 17:00
>Subject: Re: [BoI] Liberalism
>
>You say "Liberalism is the political philosophy of freedom, individualism,
capitalism, world peace, cooperation, voluntary action, tolerance,
diversity, reason, global free trade, and social harmony. Liberalism
opposes fighting and unreason."
>
>I wonder if your puzzlement over why this statement isn't embraced by all, isn't found in the fact that many of your "goods" listed here are actually contradictory and in conflict. My political philosophy professor used to call Locke, the first liberal, the "confused man's Hobbes." Hobbes showed that conflict is perfectly rational in a world of individualism. Capitalism is based on competition. Competition is another word for conflict, conflict between capitalists and conflict between owners of capital and labor. Cooperation, not so much.
Competition in the free market without gov't intervention is based on persuading people to give you their money. This is rational because if somebody has an objection to what you do he can refuse to give you his money. So it allows variation and selection in the way people provide goods and so allows the growth of knowledge about how to provide goods. Creating good products requires a lot of cooperation since every product requires inputs and putputs so you have to cooperate with the makers of those and any particular manufacturer requires a lot of detailed knowledge to make what he makes. He must cooperate with the people who will implement his knowledge of the manufacturing process.
What about companies in the same market? Everyone makes mistakes, so it is not in your interest to have a situation in which it is difficult to correct your mistakes, and for other people to correct their mistakes. And if people are forced to subsidise some group of people their mistakes won't be corrected, so liberalism is in the interests of everybody including people who at this particular time would lose money as a result of liberalisation.
>Freedom to despoil the commons is not freedom, it is vandalism.
If you can tell where spoiling of a resource comes from then somebody who owned that resource could try to get reparations from the polluter. So private property can solve that problem. If you can't tell where the pollution comes from, gov't can't solve the problem either.
> Freedom to exploit workers is not rational, it is based on power relations that have evolved over centuries. Liberalism ignores power, because it is the philosophy of those with power. Liberalism often as not is simply a defense of the powerful against the weak.
Liberalism is opposed to the use of force. So employers who use force against their employees would not be tolerated in a liberal society.
Alan
I have been considering this idea of why such universal ideas as
liberalism
are so resisted despite ample evidence for their
explanatory power.
> Capitalism is contradictory to cooperation. It depends on conflict and needs to be protected by violence.
What aspect of capitalism leads to it needing to be protected by violence?
--
Lulie Tanett
Lulie,
I told Elliott that I wouldn’t be posting to this list in
future, but your charming little Socratic question brings me back.
Hypothesis: The aspect of capitalism that leads to it needing to be protected by violence is that it is based on private property.
To consider this hypothesis, to falsify it, it seems to me that we need to consider the question historically (secondary hypothesis). Capitalism is not an idea that can be discussed in an a-historical frame. It evolved in certain societies in a certain way.
A brief summary history of capitalism in England and the United States might include some of the following:
1) The enclosure movement in England in the late eighteenth century forced people who had survived by use of the commons to supplement their subsistence from agricultural labor from the country to the newly industrialized cities and towns.
2) Improvements in technology reduce more complex craft work to more isolated tasks in the industrial production process. This, combined with the flood of agricultural workers coming from the enclosed countryside, leads to what Marx called a large “reserve army of the unemployed” which drives down wages to a subsistence level and leads to the Dickensian universe of aristocratic and new capitalist owner’s wealth and widespread poverty among urban and agricultural workers.
3) The increase in poverty leads to numerous popular movements for reform, which are suppressed by imprisonment of the reform leaders. The lives of hundreds of thousands are shortened by the miserable conditions of life for the industrial poor.
4) In the United States an industrialized North exists with a slave-based agricultural society in the South until the Civil War (imposed by violence), which secures the domination of the economy by the industrial north and releases large numbers of slaves who migrate to the northern cities. 500,000 dead in the war.
5) Gradually a union movement secures some rights for industrial workers. This is resisted by the owners of industrial enterprise in every way possible, including outright violence. In the US witness the bloody suppression of the Haymarket labor march in Chicago in 1886, the Everett massacre of the Wobblies in 1916, the breaking of the strikes in the West Virginia Mine Wars of 1920-1921.
6) With the rise of European imperialism, new global markets and access to raw materials are secured by force of arms.
7) The Great Depression of the 1930s creates misery for millions. This gives impetus to the rise of the social democratic model that now dominates most of Europe. This combination of private enterprise with regulation and a social safety net are a response to the manifest failure of unrestrained capitalism to bring the benefits of industrial innovation to all.
8) Today the United States has 900 bases around the world. What are they there for?
It seems to me if my thesis is to be falsified; it must in the historical record that we must seek an understanding and evidence. I would love to see evidence of the peace and cooperation that capitalism can bring to society based on that historical record.
The problem that seems to be at the root of the dynamic of capitalism is that for it to succeed, private property rights must be imposed by force. Hobbes showed why this is so in the seventeenth century. This may be the best of all possible worlds, but I don’t see that we can sweep away the protections that governments in the twentieth century have secured for rights of assembly and union activity without the rise again of the same dynamic of impoverishment that led to their creation in the first place. Of course we need to move on from here, not recreate the past. I just doubt that that cooperative world that we all would wish will come with a return to capitalism without government.
Ciao,
Randal
> On Tue, Jul 26, 2011 at 8:56 AM, Lulie Tanett <lul...@gmail.com> wrote:
>
> On 24 Jul 2011, at 06:48 PM, Scepticos <scep...@gmail.com> wrote:
>
> > Capitalism is contradictory to cooperation. It depends on conflict and needs to be protected by violence.
>
> What aspect of capitalism leads to it needing to be protected by violence?
> Hypothesis: The aspect of capitalism that leads to it needing to be protected by violence is that it is based on private property.
All the features of "private property" that you link to what you call "capitalism" relate to the attribute *private* (i.e. non-governmental), while all the features that you link to violence relate to the attribute "property".
So your explanation contains a gap, of the "and-then-a-miracle-occurs" variety. For, regardless of whether you call the institution "property" or not, *every* political/economic system relies on violence or the threat of violence to prevent people from using physical objects in ways deemed illegitimate under that system.
To criticise "capitalism" (whatever you mean by that) on the grounds that it "needs to be protected by violence" is therefore contentless.
> A brief summary history of capitalism in England and the United States might include some of the following:
>
> 1) The enclosure movement in England in the late eighteenth century forced people who had survived by use of the commons to supplement their subsistence from agricultural labor from the country to the newly industrialized cities and towns.
>
> 2) Improvements in technology reduce more complex craft work to more isolated tasks in the industrial production process. This, combined with the flood of agricultural workers coming from the enclosed countryside, leads to what Marx called a large “reserve army of the unemployed” which drives down wages to a subsistence level and leads to the Dickensian universe of aristocratic and new capitalist owner’s wealth and widespread poverty among urban and agricultural workers.
>
> 3) The increase in poverty leads to numerous popular movements for reform, which are suppressed by imprisonment of the reform leaders. The lives of hundreds of thousands are shortened by the miserable conditions of life for the industrial poor.
> 4) In the United States an industrialized North exists with a slave-based agricultural society in the South until the Civil War (imposed by violence), which secures the domination of the economy by the industrial north and releases large numbers of slaves who migrate to the northern cities. 500,000 dead in the war.
>
> 5) Gradually a union movement secures some rights for industrial workers. This is resisted by the owners of industrial enterprise in every way possible, including outright violence. In the US witness the bloody suppression of the Haymarket labor march in Chicago in 1886, the Everett massacre of the Wobblies in 1916, the breaking of the strikes in the West Virginia Mine Wars of 1920-1921.
>
> 6) With the rise of European imperialism, new global markets and access to raw materials are secured by force of arms.
>
> 7) The Great Depression of the 1930s creates misery for millions. This gives impetus to the rise of the social democratic model that now dominates most of Europe. This combination of private enterprise with regulation and a social safety net are a response to the manifest failure of unrestrained capitalism to bring the benefits of industrial innovation to all.
>
> 8) Today the United States has 900 bases around the world. What are they there for?
>
> It seems to me if my thesis is to be falsified; it must in the historical record that we must seek an understanding and evidence. I would love to see evidence of the peace and cooperation that capitalism can bring to society based on that historical record.
That's impossible if you define most everything as "violence" if it is done under what you call "capitalism", while also defining almost all violence as being caused by "capitalism".
Additionally, evidence is useless unless (among other things) one knows at least two explanations that it would distinguish between.
BTW, it's interesting that the Marxist theory of history and economics that you sketch above did not lead Marx himself to consider "relying on violence" to be a fatal flaw in an ideology.
-- David Deutsch
> 2) Improvements in technology reduce more complex craft work to more isolated tasks in the industrial production process. This, combined with the flood of agricultural workers coming from the enclosed countryside, leads to what Marx called a large “reserve army of the unemployed” which drives down wages to a subsistence level and leads to the Dickensian universe of aristocratic and new capitalist owner’s wealth and widespread poverty among urban and agricultural workers.
You are claiming by implication that minimally skilled labor was
making above subsistence income, prior. When and how did that begin?
> 8) Today the United States has 900 bases around the world. What are they there for?
Defense.
> It seems to me if my thesis is to be falsified; it must in the historical record that we must seek an understanding and evidence. I would love to see evidence of the peace and cooperation that capitalism can bring to society based on that historical record.
Try looking at the following for the last 3000 years:
- wars between liberal countries (or states, city-states, tribes, empires, etc…)
- wars between a liberal country and a non-liberal country
- wars between two non-liberal countries
Wikipedia has extensive lists of wars to help out:
http://en.wikipedia.org/wiki/Lists_of_wars
When countries are mixed, consider who had political power. E.g. for
the American revolutionary war, the liberal whig party wanted peace
with America not war, but they were not in power and didn't get to set
policy, so England counts as non-liberal.
War is nothing new. What I think needs greater explanation is peace
and prosperity. E.g. why did England and France *stop* having wars?
> The problem that seems to be at the root of the dynamic of capitalism is that for it to succeed, private property rights must be imposed by force.
Would you call it a violent system if it defended people's lives by
force, against forcible murder?
How do you expect them to live if their possessions are not also
defended by force, against forcible theft?
> I would say that capitalism is that system of organization of social production in which private persons are granted ownership (by the state) of productive processes. Capitalism socialized production.
Capitalism is the application of freedom to economics. It is an independent issue from whether there is a State or not.
Capitalism ownership is not granted by the State. At most it is protected by the State. Property rights are deemed to be *granted* by reason, liberalism, natural rights, utilitarianism, religion, morality, or various other things, but not by the State.
The idea of capitalism as requiring State backing is a Marxist idea (no doubt also held by many other people who take the State for granted without questioning it):
http://en.wikipedia.org/wiki/Capitalism
> Marx's notion of the capitalist mode of production is characterised as a system of primarily private ownership of the means of production in a mainly market economy, with a legal framework on commerce and a physical infrastructure provided by the state.
"Capitalism" is Marxist terminology (used by a few socialists before Das Kapital, and then made well known by Marx). It was not chosen by liberals or advocates of capitalism. I am pointing this out because the root word, "capital", is misleading. This is not surprising since the word was chosen by an opponent, to emphasize what he saw as a main characteristic of a bad system, rather than being chosen by a proponent to emphasize what he saw as being good about it.
Capitalism only has to do with capital indirectly: it allows (and causes, without requiring or forcing) accumulation of capital, and it is favored by some economists who understand the value of accumulation of capital and how capital can help create more wealth more efficiently. Economists also speak of issues such as repurposing capital as the needs of society change (e.g. retrofitting an obsolete factory to produce something else).
Capitalism refers to an economic system of free trade and individual property in which the market is left alone and individual economic actors freely make decisions about their own property and actions, rather than (for example) a central authority running or regulating commerce or individual behavior (e.g. imposing tariffs).
Capitalist societies, by the way, can have a central authority or not have one. Capitalism itself is compatible with either approach. Having a central authority is the historical norm and it's not simple to avoid but, for example, anarcho-capitalism does not involve one.
The key concepts of "capitalism", as seen by its advocates, are *free trade* and *individual property*, not capital.
Trade means people swap goods or services. People choose to trade when they believe they will benefit. Trade thus operates by *unanimous consent*. If they wouldn't benefit (in their opinion), and they had the free choice, then they would choose not to trade. Free trade therefore refers to mutually beneficial trades (beneficial as judged by each party to the trade).
Restricting free trade is bad because it means that in some cases where two people want to trade, and believe they would both benefit, they are forcibly prevented and denied that benefit. Therefore restrictions on free trade always make people worse off.
Alternatively, free trade can be violated by *forced trade*, in which at least one party considers themselves worse off but is forced to trade anyway. Force trade is trade without unanimous consent and it can only be imposed by violence or threat of violence (normally by a State).
Individual property is a system of resolving disputes. Disputes are dangerous because they can leading to fighting, force, and violence. The system of individual property says that when two people disagree about the use of a piece of property, the owner gets to decide. As long as people respect this system, disputes get settled without violence.
People who have ideas about property they do not own are required to use persuasion and argument to convince the owners to use the property differently. If they are unconvincing then they have to trade for the property in order to gain control over it.
In this way -- by successfully resolving many conflicts -- capitalism facilitates cooperation and avoids violence.
What about "voluntary socialism"? That is a special case of capitalism. It is allowed under capitalism. Property owners may share or give away any property they want. What makes it a type of "capitalism" is that no violations of free trade or individual property ever take place. That's because of the voluntary nature of the arrangement and the ability for anyone to stop if they change their mind and not be forced to do anything they do not wish to go along with.
Voluntary socialism looks similar to socialism as long as no conflicts come up. When everyone agrees, any system allowing freedom will look about the same -- people will happily do whatever they want and nothing bad will happen. But what's crucial is what happens when people disagree, and how conflicts can be resolved without violence.
Voluntary socialism uses the capitalist system of individual property as its fallback conflict resolution mechanism when persuasion and verbal discussion fail. What that means is if someone disagrees with something he can leave and take his property with him. His participation is purely voluntary and isn't forced on him. (Of course, and again this is how capitalism works, anything he had ceded ownership of he won't be able to take with him if he leaves.)
Previously this question came up (here phrased in my words):
> How is the competition of capitalism compatible with cooperation and social harmony? Does capitalism cause conflict and fighting?
I've begun to answering this by explaining how capitalism provides a dispute resolution mechanism. Further, it provides freedom and *lack of freedom* always means conflict (people being forced to do things they do not consent to). I'd now like to address the issue of competition.
The sense of competition involved in capitalism works as follows:
People try to do or make what they think is best. They offer to trade what they think is valuable. If they want a lot of good or services from others, then they strive to do what is most valuable that they can trade, so that they can get the most in return.
People aim for *objective value*. High quality is rewarded. They are competing primarily against failure and mistakes.
An example of a mistake would be if someone judged a particular product would be useful, produced it, and then it was discovered it is not useful so no one bought it. (Note: buying is a form of trading for it, for mutual benefit, where money is the thing traded by one party.)
There is a special category of mistake which is confused with competition between people. But it does not fundamentally put people at odds with each other. It goes something like this:
If I am going to produce a product and sell it, I have to judge what people will want to buy. If I am mistaken then I will benefit less than I hoped, or even lose resources.
Many products take time to create. Sometimes they take years of research and planning. So entrepreneurs often have to make predictions in advance.
Sometimes the following thing happens: I predict people will want to buy my product in two years time. I produce it. And I would have been correct except that something unforeseen (to me) happened. So, I made a mistake.
And that unforeseen thing is: someone else started selling a different product which was (in the eyes of the people I hoped would buy my product) better than mine.
That this happened is good for my potential customers. They believe themselves to be better off this way. But it's bad for me because I made a mistake in my predictions about who would wish to buy my product. And that mistake indirectly involves another person. So it's easy to blame that other person as a scapegoat. But he has done nothing wrong.
This is not a zero sum game. Everyone can win. No one else's success ever makes me lose out. Only my own mistakes end badly for me. My competitors are not my enemies. And bear in mind that being an entrepreneur is a risky and optional occupation. One doesn't have to do that.
-- Elliot Temple
http://fallibleideas.com/
>
> One thing that comes up over and over again is that people think force is great at solving certain kinds of problems. They also overestimate the negative consequences of not using force.
>
> So leftists think some free market policies are good, but left entirely to their own devices, markets will convulse and steal people's money, or something.
>
> Another example: few parents are 100% authoritarian, but you tell them about TCS, and they will tell you how if you don't have bed-times and regulate popsicle intake carefully you will wind up with a wild and feral child, or something.
>
> Missing from these stories is how force actually solves the concern at issue.
>
> Markets can make mistakes. There can be fraud in them. Yes, and? How does regulation and government interference solve that?
>
> Children can make mistakes (though I'll mention here people are unreasonable about the alleged problems caused by not keeping regular bed-times and eating "too many" popsicles.)
People don't just claim that children staying up too late or eating "too many" popsicles *cause* problems. Those *are* the problems.
> Yes, and? How does parental force solve that?
>
Parental force *does* solve it in their eyes, because it makes the behaviour go away, and it was the behaviour that was the problem. People are unconcerned with ideas. They think that conforming matters. They don't care *why* the child conforms, they just want the child to conform.
Jordan
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