Wednesday, May 09, 2007

Capitalism, By Definition

Over the past couple of days I've been in a debate with "Red Deathy" on Wikipedia. The debate began because I noticed an obvious contradiction in the criticisms section. The entry (correctly) says that capitalism is based on voluntary transactions. (That part of the entry has since been removed by Red Deathy, but as I point out, it's really still there.) However, the criticism section notes that "unfree labor" (ie slaves and serfs) is consistent with capitalism. This doesn't make any sense.

Red Deathy disagrees, arguing sometimes people are faced with a series of bad choices and thus they are forced to take a job or buy a product. I, however, maintain that this is not force. The company that hires the destitute did not make them destitute. They only gave them an opportunity; no force was involved. This is a common confusion.

When the state demands tax dollars, it presents a choice: give me money or I arrest you. If a firm tried to do the same thing (work for me or I'll arrest you), then it would be violating private property and thus it would not be capitalism. Capitalism and coercion are inconsistent.

4 comments:

Jason Br. said...

Taxation is inconsistent with capitalism?

David said...

On the theoretical level, yes. On the practical level they aren't but only to the point that the raised money is used to keep property clearly defined and strictly enforced.

Jason Br. said...

I am not familiar with any theoretical definition of "capitalism" that excludes taxation. Aren't you mistakenly equating "anarcho-capitalism" with "capitalism"?

David said...

Depends on your precise definition of capitalism. "All property is privately owned" does not jive with taxation. "Most property is privately owned" does. The former is a tenet of anarcho-capitalism and the latter is the (in my opinion) the practical application of capitalism.