Rand, Ayn – Capitalism

There were many reasons for this tribal view of man. The morality of altruism was one; the growing dominance of political statism among the intellectuals of the nineteenth century was another. Psychologically, the main reason was the soul-body dichotomy permeating European culture: material production was regarded as a demeaning task of a lower order, unrelated to the concerns of man’s intellect, a task assigned to slaves or serfs since the beginning of recorded history. The institution of serfdom had lasted, in one form or another, till well into the nineteenth century; it was abolished, politically, only by the advent of capitalism; politically, but not intellectually.

The concept of man as a free, independent individual was profoundly alien to the culture of Europe. It was a tribal culture down to its roots; in European thinking, the tribe was the entity, the unit, and man was only one of its expendable cells. This applied to rulers and serfs alike: the rulers were believed to hold their privileges only by virtue of the services they rendered to the tribe, services regarded as of a noble order, namely, armed force or military defense. But a nobleman was as much chattel of the tribe as a serf: his life and property belonged to the king. It must be remembered that the institution of private property, in the full, legal meaning of the term, was brought into existence only by capitalism. In the pre-capitalist eras, private property existed de facto, but not de jure, i.e., by custom and sufferance, not by right or by law. In law and in principle, all property belonged to the head of the tribe, the king, and was held only by his permission, which could be revoked at any time, at his pleasure. (The king could and did expropriate the estates of recalcitrant noblemen throughout the course of Europe’s history.)

The American philosophy of the Rights of Man was never grasped fully by European intellectuals. Europe’s predominant idea of emancipation consisted of changing the concept of man as a slave of the absolute state embodied by a king, to the concept of man as a slave of the absolute state embodied by “the people”—i.e., switching from slavery to a tribal chief into slavery to the tribe. A non-tribal view of existence could not penetrate the mentalities that regarded the privilege of ruling material producers by physical force as a badge of nobility.

Thus Europe’s thinkers did not notice the fact that during the nineteenth century, the galley slaves had been replaced by the inventors of steamboats, and the village blacksmiths by the owners of blast furnaces, and they went on thinking in such terms (such contradictions in terms) as “wage slavery” or “the antisocial selfishness of industrialists who take so much from society without giving anything in return”—on the unchallenged axiom that wealth is an anonymous, social, tribal product.

That notion has not been challenged to this day; it represents the implicit assumption and the base of contemporary political economy.

As an example of this view and its consequences, I shall cite the article on “Capitalism” in the Encyclopaedia Britan-nica. The article gives no definition of its subject; it opens as follows:

CAPITALISM, a term used to denote the economic system that has been dominant in the western world since the breakup of feudalism. Fundamental to any system called capitalist are the relations between private owners of nonpersonal means of production (land, mines, industrial plants, etc, collectively known as capital) [italics mine] and free but capitalless workers, who sell their labour services to employers. . . . The resulting wage bargains determine the proportion in which the

total product of society will be shared between the class of labourers and the class of capitalist entrepreneurs.1

(I quote from Gait’s speech in Atlas Shrugged, from a passage describing the tenets of collectivism: “An industrialist—blank-out—there is no such person. A factory is a ‘natural resource,’ like a tree, a rock or a mud-puddle.”)

The success of capitalism is explained by the Britannica as follows:

Productive use of the “social surplus” was the special virtue that enabled capitalism to outstrip all prior economic systems. Instead of building pyramids and cathedrals, those in command of the social surplus chose to invest in ships, warehouses, raw materials, finished goods and other material forms of wealth. The social surplus was thus converted into enlarged productive capacity.

This is said about a time when Europe’s population subsisted in such poverty that child mortality approached fifty percent, and periodic famines wiped out the “surplus” population which tiie pre-capitalist economies were unable to feed. Yet, making no distinction between tax-expropriated and industrially produced wealth, the Britannica asserts that it was the surplus wealth of that time that the early capitalists “commanded” and “chose to invest”—and that this investment was the cause of the stupendous prosperity of the age that followed.

What is a “social surplus”? The article gives no definition or explanation. A “surplus” presupposes a norm; if subsistence on a chronic starvation level is above the implied norm, what is that norm? The article does not answer.

There is, of course, no such thing as a “social surplus.” All wealth is produced by somebody and belongs to somebody. And “the special virtue that enabled capitalism to outstrip all prior economic systems” was freedom (a concept eloquently absent from the Britannica’s account), which led, not to the expropriation, but to the creation of wealth.

I shall have more to say later about that disgraceful article (disgraceful on many counts, not the least of which is scholarship). At this point, I quoted it only as a succinct example of the tribal premise that underlies today’s political economy. That premise is shared by the enemies and the champions of capitalism alike; it provides the former with a certain inner

» Encyclopaedia Britannica, 1964, VoL IV, pp. 839-845.

consistency, and disarms the latter by a subtle, yet devastating aura of moral hypocrisy—as witness, their attempts to justify capitalism on the ground of “the common good” or “service to the consumer” or “the best allocation of resources.” {Whose resources?)

If capitalism is to be understood, it is this tribal premise that has to be checked—and challenged.

Mankind is not an entity, an organism, or a coral bush. The entity involved in production and trade is man. It is with the study of man—not of the loose aggregate known as a “community”—that any science of the humanities has to begin.

This issue represents one of the epistemological differences between the humanities and the physical sciences, one of the causes of the former’s well-earned inferiority complex in regard to the latter, A physical science would not permit itself (not yet, at least) to ignore or bypass the nature of its subject Such an attempt would mean: a science of astronomy that gazed at the sky, but refused to study individual stars, planets, and satellites—or a science of medicine that studied disease, without any knowledge or criterion of health, and took, as its basic subject of study, a hospital as a whole, never focusing on individual patients.

A great deal may be learned about society by studying man; but this process cannot be reversed: nothing can be learned about man by studying society—by studying the inter-relationships of entities one has never identified or defined. Yet that is the methodology adopted by most political economists. Their attitude, in effect, amounts to the unstated, implicit postulate: “Man is that which fits economic equations.” Since he obviously does not, this leads to the curious fact that in spite of the practical nature of their science, political economist* are oddly unable to relate their abstractions to the concretes of actual existence.

It leads also to a baffling sort of double standard or double perspective in their way of viewing men and events: if they observe a shoemaker, they find no difficulty in concluding that he is working in order to make a living; but as political economists, on the tribal premise, they declare that his purpose (and duty) is to provide society with shoes. If they observe a panhandler on a street corner, they identify him as a bum; in political economy, he becomes “a sovereign consumer.” If they hear the communist doctrine that all property should belong to the state, they reject it emphatically and feel, sincerely, that they would fight communism to the death; but in political economy, they speak of the government’s duty to effect “a fair redistribution of wealth,” and they speak of businessmen as the best, most efficient trustees of die nation’s “natural resources.”

This is what a basic premise (and philosophical negligence) will do; this is what the tribal premise has done.

To reject that premise and begin at the beginning—in one’s approach to political economy and to the evaluation of various social systems—one must begin by identifying man’s nature, i.e., those essential characteristics which distinguish him from all other living species.

Man’s essential characteristic is his rational faculty. Man’s mind is his basic means of survival—his only means of gaining knowledge.

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