Why Not Capitalism?

It’s not often that you can read a great political philosophy book that supports its main argument by referring to the Mickey Mouse Clubhouse television show.

But, Why Not Capitalism? by Jason Brennan is such a book.

The book is a moral defense of capitalism. Ayn Rand is famous for offering her moral defense of capitalism as well, but her nontraditional style and idiosyncratic use of terms like selfishness and altruism made her work easy for many philosophers, and psuedo-intellectuals, to dismiss. Brennan’s work is not as easily dismissed.

Why Not Capitalism? is an explicit response to G. A. Cohen’s Why Not Socialism?

Cohen’s book uses the example of a camping trip of friends who share their property in a socialist manner and contrasts this wonderful experience with how awful it would be if people began acting like capitalists and demanded special rewards for the use of their property and talents. He argues that this shows that, whether or not Socialism is feasible on a grander scale, it’s certainly more desirable, and morally superior. Many people, even those who prefer Capitalism for prudential, realistic, reasons agree with this and believe that we’re stuck with Capitalism because we’re just not good enough for Socialism.

My first reaction, upon hearing Cohen’s argument was to dismiss it as irrelevant because of the Knowledge Problem (or Socialist Calculation Problem). The information required to allocate resources well in a large society is not concentrated, but is dispersed and inexplicit. Market prices help to coordinate productive activity without the need for the information to ever be localized. So, it just seemed to me to be a mistake to talk about scaling up the sharing among friends to the organization of a large society.

Hayek himself wrote:

Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within the different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos i.e. of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once.

But Brennan isn’t content to quibble about the feasibility of large-scale Socialism. He understands that Cohen is making a point about whether morally ideal people should prefer Socialism or Capitalism, and that the feasibility question is separate.

Brennan recognizes that Cohen has pulled a fast one and has compared an idealized (among morally perfect members) version of Socialism with a “realistic” version of Capitalism (among morally imperfect members). Brennan offers a parody of Cohen’s metaphor by using Disney’s Mickey Mouse Clubhouse television show world as his idealized version of Capitalism, and then contrasts it with “realistic” Socialism, with collective ownership, where the characters act as real socialists have:

a. Donald decides to forcibly nationalize and control all of the farmland, murdering millions in the process, and causing a massive famine that murders tens of millions more. He uses terror tactics to assert his control….

b. Things don’t go as well as Donald planned, and the other villagers begin to resist. Goofy stifles dissent by creating gulags in the coldest reaches of Disney World. Anyone he deems an enemy is sent to the gulag to be tortured and worked to death…

c. Mickey Mouse stifles free speech, crushes all political opposition, and installs himself for life as the Premier. He becomes increasingly paranoid. At one point, to assert his control, he murders nearly all
members of the governing party…

d. Minnie Mouse creates five-year economic plans for the entire village economy. In some areas she decides to depopulate the cities and move everyone into agricultural communes. In other areas she forces [them] to work in factories. She causes massive economic stagnation, shortages, and breadlines…

It’s easy to see how one can use this kind of apples to oranges comparison to get the result he desires.

But, Brennan goes further. He goes on to show that even with apples to apples comparisons of Idealized Socialism to Idealized Capitalism, (and also when comparing realistic Socialism to realistic Capitalism) Capitalism has many virtues that make it preferable.

And, to top it all off, even if many people would actually prefer to live under a socialist regime, they could do it within a capitalist society (so long as all of the members are there voluntarily), but Socialism does not permit a similar option for those who prefer Capitalism.

That’s Why Capitalism!

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