The Case for Capitalism, Part VII

Every previous column in this series (Part I, Part II, Part III, Part IV, Part V, and Part VI) has featured a video.

I’m going to break that pattern today and instead start with this profoundly important tweet.

The first part of the tweet is supported by straightforward empirical data.

The nations that have more capitalism grow faster and generate broadly shared prosperity. The nations that have more government languish.

But I want to focus on the second part of the tweet, which gives one of the possible reasons for why some people reject free enterprise.

Is it true that the haters of capitalism are merely resentful?

That’s obviously the case for some folks on the left, but let’s explore why.

In a column for Law & Liberty, Dominic Pino cites Friedrich Hayek’s hypothesis (which I also wrote about back in 2010) that a preference for redistribution may be a legacy of how human societies evolved.

The better explanation for the seemingly irrational rejection of capitalism comes from Friedrich Hayek, in what he calls the “atavism of social justice.” Hayek said that he spent ten years trying to figure out what “social justice” means and concluded it is “nothing more than an empty formula, conventionally used to assert that a particular claim is justified without giving any reason.” He traces the instinct towards social justice and against the market system to earlier stages of civilizational development, when humans lived in small bands of a few dozen people. In that context, “a unitary purpose, or a common hierarchy of ends, and a deliberate sharing of means according to a common view of individual merits” are beneficial characteristics to survival. In a modern commercial town of thousands of people, to say nothing of a globalized market economy, those characteristics are largely impossible to obtain, given the diversity of human wants and needs and the specialization of production. Commercial society has improved our standard of living far beyond what our ancestors could have ever imagined, but that instinct from primitive societies is still hardwired in us, Hayek argues.

That seems compelling and I’m sure it’s part of the answer.

However, envy is also part of the answer. I think people like Bernie Sanders simply resent success. So I agree with @kiyahwillis.

But I’ll elaborate in a way that maybe links her explanation to Hayek’s explanation. Based on my countless discussions for statists, the big problem is that folks on the left believe in the zero-sum fallacy.

To understand, here’s a video I shared about three years ago.

In primitive societies, the zero-sum fallacy wasn’t a fallacy. If the chief took a bigger share of mammoth meat, it did mean less for everyone else.

So maybe there are “hardwired” reasons for people to feel hostility toward people with a lot of wealth. But as explained in the video (and by Hayek), that mentality is wildly wrong in a market economy based on voluntary exchange and wealth creation.

The pilgrims figured that out 400 years ago. Is there any hope for today’s class-warfare crowd?

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Image credit: Jorge Royan | CC BY-SA 3.0.