This article is reprinted by perrmission of Nathaniel Branden Lectures. It is part of a lecture in a series being offered in
Capitalism and socialism have, traditionally, been considered exclusively as opposing economic-political systems. It is therefore in terms of economic and political tenets that the battle between them has been fought. Certainly each system does embody a mutually exclusive theory of the proper function of government and the legitimate operation of an economy—but if one examines their tenets, one will discover at the root of their specific and practical doctrines, a more basic and divisive clash between them.
It is in their opposing concepts of the nature of man and of his proper relationship to other men—in that which each side holds to be the good, the right, the moral—that the heart of the conflict between capitalism and socialism exists.
What is capitalism? Economically, it is a system in which the instruments of production are owned by private individuals who operate them for their personal profit. Goods and services are exchanged by free trade on a free market, a market which is regulated, not by bureaucratic edict, not by what those who claim to represent the majority decide is good for the people, but by the law of supply and demand—which means: by each man’s voluntary decision as to what products he is willing to produce, to buy, and to sell, and at what price, within the context of the market with which he deals.
The motive power of capitalism, the propelling force which makes it work, is men’s desire and effort to use their productive capacity for the purpose of creating wealth. The end which capitalism serves is the achievement of profit—a private, personal, selfish profit—by every man from a captain of industry to a shopkeeper to a coal-miner, each to the limit of his ability, his effort, his attainment. Capitalism is not aimed at what its opponents call "the service of the public good." It is concerned exclusively with the private good of individual citizens, and holds that the good is to be achieved by those citizens as individuals. It expects each man to achieve whatever heights he is able, in whatever work he has chosen, by his own intelligence, his own will, his own virtue and his own work. Capitalism expects, and, by its nature, demands, that every man act in the name of his own rational self-interest. Just as it does not expect a consumer to pay more for any product than the lowest price at which that product can be obtained—just as it does not expect a worker to accept a lower wage for his effort than the market will bear—so it does not expect a factory-owner to sell his products at a price lower than the public is willing to pay. The twin motors of capitalism are profit and achievement, with one a function of the other; profit is proportionate, not to a man’s intentions, wishes, needs or desires, but proportionate to that which he in fact accomplishes.
The political system logically implied and necessitated by capitalism is one which limits the function of government to the protection of its citizens from the violation of their rights by force or fraud, and from foreign invasion. Just as its economic principles are not aimed at "the public good," neither are its political principles; it does not recognize the validity of the concept; it does not grant that anyone’s good can be achieved by having some men decide what to do with other men’s lives, energy and profit. It recognizes that all good inheres only in individual men, and that there is no moral reason why one man should be forced to accept, as the goal of his work and his life, the achievement of the good of another man.
What is socialism? Economically, it is a system in which the means of production are owned by the State, not by private individuals, and are operated for the profit of the collective, not for the private gain of the producers. The State, not the free market, decrees how and by whom goods and services are to be produced, how and to whom they are to be distributed. The State purports to be the voice and the expression of the majority of its citizens; it equates state-good with public good, and, insofar as individual good is regarded as of concern, it holds that the good of the individual is to be achieved by his service to the good of the public—which, in practical terms, means: by service to the State—which, in concrete terms, means: by service to the particular group of men in power at any given moment.
Socialism rests on the premise that man, by his nature, is unfit for freedom, that he cannot be trusted independently to pursue and to achieve that which is necessary for his life, that he cannot be trusted to own and freely to exchange that which he produces, that, if left free, men will live as wild beasts. Therefore, socialists decree, men must produce at the order of a higher authority called the public, or society, or the State, and must permit this higher authority to utilize the products of men’s efforts as it sees fit. Under socialism, men are to produce not for profit, but "for use"—the use of the public, without regard for the profit of the men who created that which is being used.
Each Life an End in Itself
What opposing moral premises are implicit in the doctrines of capitalism and socialism?—of individualism and collectivism? It was Ayn Rand, in her novels advocating individualism, The Fountainhead and Atlas Shrugged, who defined the basic antagonism between individualism and collectivism, and stated that their opposing moral concepts are to be found in their answer to this single question: Does man have the right to exist for his own sake?
The individualist answers: Yes. The collectivist answers: No—and asserts that man exists, not by right, but by virtue of a permission granted him by society, a permission contingent upon the service he renders to society.
Individualism holds that a human life is an end in itself. Collectivism holds that man’s life is a means to an end to be designated by society. Individualism holds that man possesses, by his nature, the rights of life, liberty and the pursuit of happiness. Collectivism holds that man possesses, by his nature, the duty to sacrifice his life, his liberty and his happiness whenever and wherever the collective may demand it. Collectivism regards man as property, signed, sealed and delivered up to those who claim to represent his fellow men; he must exist for their sake, in their service, and by their command.
No matter how vehemently collectivists may insist that the individual does in fact profit under their system, no other premise can underlie the coercion of the individual by the will of the mass but the premise that man does not possess the right to exist for his own sake—the premise that self-interest and profit are evil. Every insult and every criticism ever hurled at a free economy has been based on the assumption that it is not moral for men to pursue their profit, and that morality consists of sacrificing their self-interest to the welfare of others.
The questions which every man who preaches collectivism must ask himself are these: Do I have the right to force other men to work for my benefit? Are their lives mine? If I do not have this right, if they are not my chattel, do I have the right to force them to work for the benefit of others? And if I do not have this right, do I acquire it by virtue of the fact that other men like myself, who call themselves "the public," wish to join me in the activity of forcing men to work for ends other than those they have voluntarily chosen? Is it not man’s right to exist that makes me brand as evil the actions of a hold-up man who coerces and robs? Why is this reason canceled when the coercion and robbery are committed, not by an individual thug, but by the State?
“Though Shalt Not Steal, Except…”
It seems that wherever the Welfare State is involved, the moral precept, "Thou shalt not steal," becomes altered to say: "Thou shalt not steal, except for what thou deemest to be a worthy cause, where thou thinkest that thou canst use the loot for a better purpose than wouldst the victim of the theft."
And the precept about covetousness, under the administration of the Welfare State, seems to become: "Thou shalt not covet, except what thou wouldst have from thy neighbor who owns it."
Both of these alterations of the Decalogue result in complete abrogation of the two moral admonitions—theft and covetousness—which deal directly with economic matters. Not even the motto, "In God we trust," stamped by the government on money taken by force in violation of the Decalogue to pay for the various programs of the Welfare State, can transform this immoral act into a moral one.
F. A. HARPER, Morals and the Welfare State