Capitalism Ideology Vs. Practice

Not all business owners are Capitalists. If we're going to say that Capitalism is an ideology, then to be a capitalist you have to do more than merely participate in the free market.

I was 5 years old when I started sorting out the virtues of capitalism and the current state of society, namely- statism. Instantly, I figured that my goal in life was to own and run a factory. Be productive. Be Innovative. I understood that there were two kinds of people in the world: those who produce value, and those who don’t.

The thought of owning and managing a factory filled me with joy and excitement. This lasted about a day, maybe two. Then I stumbled upon a dilemma: In order to run a factory I would need workers, but those guys will want to run their own factories too – so how can capitalism be right for everybody?

My first act in reconciling with my wish to be a factory owner and my hope that capitalism is indeed for everyone – was to examine the different kinds of people who can be good workers but can’t or don’t want to own a factory themselves. After mulling the problem in my head for a day or so, I found a solution.

I concluded that morality doesn’t come without a cost, and that I would be required to help my best workers to grow from workers to fellow capitalists. The downside of this would be that I would constantly lose my best workers, and gain competition (well, to be honest, at age 5 I didn’t figure that part about the competition – but it changes very little in the general equation). Now, the advantage on the other hand would be huge: I would be responsible for choosing who will rise in status and power. My mission would include selecting the ones who are capable (that’s easy), the ones who want to (that’s also easy) and finally, the ones who are the most deserving. I’d be looking for the ones who handle power well and add morality to the world – basically, those who create more capitalism and less governmentalism.

Time went by and I didn’t become a factory owner or business owner as I thought I would. I did inherit a great moral education, spirit and character – but I didn’t inherit the required know-how, the business connections/ relationships nor the capital which can buy those missing components. Whatever I did, wherever I went, there was never this capitalist figure to find, the figure I thought myself to be when I grow up. That mentor-employer who gives you work, training, and eventually helps you start your own business when he notices you’re doing everything right: that you can do it, that you want to do it, and that you’re a decent person.

I’m 36 years old now, I’m 14 years in the software industry, and I’m nowhere close to running my own business. Yes, there are great resources on the internet, and yes, people have helped me learn the profession and have helped me get a job here and there – but no business owner helped me to start my own business. It’s one thing to be a business owner and write an article on “how to start your own business”, and a whole other thing to instill someone with all the know-how and business relationships needed to start a business.

I have to add one thing regarding my earlier mentioned insight, the one from 31 years ago: when I concluded that I’m ethically obligated to help the good – I also concluded (and it didn’t take me more than a day to arrive at this) that it’s NOT OK to first exploit someone as a worker, and only when it’s convenient start helping that man to grow. I concluded that it’s morally wrong to be a stumbling block. If a good person comes to me for work, and he can and wants to run a factory, and he’s not a murderer, liar, thief or any of those things, then it is my duty as an employer to help that person or avoid hiring him altogether. It is morally wrong to take a good person, a capable and willing person – and keep him in the dark about how to become a business owner.

Admittedly, I use the word “morality” in a loose way here. I don’t mean enforceable behavior, but socially preferred behavior — truthfulness, right and wrong, good and bad, and so forth.

When you hire somebody to work for you, you make him dependent upon you in many ways. It surely isn’t something enforceable, but not enabling a worker’s personal growth and development is disgusting behavior from a social perspective, and bad for the world. If you truly believe in capitalism, you must help everybody grow and not be a stumbling block — especially not to your hirelings.

Yes, they need to save their money, but know-how and connections must come from somewhere – and it’s best if it comes from you, the employer. If it doesn’t, you can’t say that you support capitalism. In other words, you can’t call yourself a capitalist if you don’t share know-how with the people who depend on you. (Workers will not be taught and helped by company X when they work for company Y).

So if you are still with me, you can understand why I don’t call most industrialists and business owners today “capitalists”. They may be involved in doing capitalism, but they surely don’t believe in the virtue of capitalism. If I payed a thief to not-steal, you wouldn’t say he’s a moralist. And so most of those private sector business owners are not capitalists. They may be in favor of property rights, but they aren’t helping other people become capitalists.

If there was a guy claiming to be a socialist, and he didn’t tell hungry and homeless people that they’re entitled to free food and housing – and where and how they can get that – we would hardly call that guy a socialist. We’d probably call him “an opportunist” and that’s all. He gets something free from the government, he wants it to keep coming, but he’s not really a socialist.

Now, if you ask “what interest has a business owner to let workers leave?” you already forget that you had an ideology. You throw it out the window. When socialists do this (“what interest do I have that other needy people will get money from the state?”) we immediately point out the moral hypocrisy.

You started your own business? Good for you. You’ve created a new job? That’s good, and I don’t think you’re exploiting anyone. I don’t consider selfishness to be something evil, and I never made any such suggestion.

But merely avoiding violence is not enough to support an ideology. Travis, a business owner may indeed help whoever he wants, but when Travis hires John, Bill and Charlie as workers, they become dependent on him. So if Travis decides to help only John, and only after 10 years using him as a worker (because if John had that knowledge, in theory he wouldn’t be working for Travis), then Travis shouldn’t boast of his virtuous capitalism. He is merely an opportunistic hypocrite who puts profit ahead of moral values.

In other words, his capitalism is not value-driven. In the end, all rhetoric about “the virtues of capitalism” must differentiate between avoiding evil and doing good.

We must also consider the consequences, over time, of a business owner’s actions. This includes more than the immediate aspect of it. It is not good if a person works for you for 10 years and still doesn’t know how to manage a business (meaning, how to supply value to the market). He becomes dependent upon you, and while this is not strictly immoral, it’s not to be admired. It is wrong to see people as “human resources” – an attitude that was very widespread in recent centuries and is still increasing. It doesn’t help to consider humanity as a resource to be thrown away like an old computer when it no longer serves you.

It is better for the world and consistent with the ideology, to treat a worker as an apprentice – a person who wants and deserves, just like you, to be his own boss.

If Robinson Crusoe and Friday live on a lonely island and Robinson builds a small cabin while Friday doesn’t bother, it’s obvious that Robinson would have a much greater right to use that cabin – and if it only suits one person, Robinson is the one live in it.

But if only Robinson knows how to build a cabin, and he doesn’t share that knowledge with Friday, and if Friday remains dependent on him and does all the hard chores by himself – this is already reprehensible. It has nothing to do with principles, private property, or what belongs to who. It is simply evil.

What I’m saying is that we must differentiate capitalism as a pattern of behavior from capitalism as an ideology. If you declare “I’m a capitalist” or “I believe in capitalism” you are using it as an ideology. In that case, you must honestly deem it good for all concerned that everybody participates. Now that you have this idea in mind, look around. Are you a capitalist? Do you work for a capitalist? Because now, when a skeptic asks you why they’re not getting ahead in the private sector, or why they don’t get a fair chance in the capitalism game, I think you’ll have a good answer: Not every private business owner is a capitalist, and if you’re not working for a capitalist, then you’re not doing it right.