Entry from July 31, 2012

It looks as if National Review is seeking to exploit what President Obama resolutely keeps insisting wasn’t a gaffe — “You didn’t build that” — by a offering up a mini-Festschrift for capitalism. “Capitalism means benevolent creativity,” claims George Gilder; Ramesh Ponnuru says that “the voter question Romney must answer” is this: “What can capitalism do for me?” On NRO today, Charles C.W. Cooke says that if you want to know “How to be an American” you should “Embrace capitalism.” Such celebration is echoed in today’s Wall Street Journal (pay wall) in articles by both Stephen Moore and Bret Stephens who also offer up what at that venue are not-unfamiliar tributes to capitalism — a thing generally thought by those with whom I tend to agree politically to be as much a part of the American way as “freedom.”

I hesitate to challenge such clever men as these, but I’m afraid I can’t agree. I’m all for freedom, of course, but I think “capitalism” is not a very good way to express what we mean by economic freedom. Not that my reservations are likely to make any difference to the reflex on the right to assume that capitalism must be the opposite of socialism. We have the socialists’ word for it, after all. Mr Moore takes the occasion of the one hundredth anniversary of the birth of the late Milton Friedman to call him “The Man Who Saved Capitalism” — though long before he did that, he wrote a book called Capitalism and Freedom. Mr Stephens praises Mitt Romney in Israel because “he admires the country as much for where it’s going as for where it has come from” — leaving his headline writer to specify that “where it’s going” is capitalism, no doubt on account of the fact that “where it has come from” is socialism.

Mr Moore’s piece is meant to be a counterblast to the likes of Joseph Stiglitz and the Occupy Wall Street crowd who blame the crash of 2008 on “deregulation” and deregulation on Friedman and the Chicago school. Mr Stephens’s piece draws a natural contrast between Mr Romney and President Obama, who may be supposed to prefer Israel’s socialist past.

The president’s views are of a piece with the broader left-right debate on the nature of success. When detractors think about Israel, they tend to think its successes are largely ill-gotten: Somebody else’s land, somebody else’s money, somebody else’s rights. It’s the view that Israel gets an unfair share of foreign aid from the U.S., and that it takes an unfair share of territory from the Palestinians. It’s also the view that, as the presumptive stronger party in its dealings with the Palestinians, Israel bears the onus of making concessions and taking the proverbial risks for peace. As the supposed underdogs, Palestinians are not burdened by any reciprocal moral obligations.

He explicitly makes the parallel with “You didn’t build that,” which was obviously intended as a way to clear away the most obvious objection to those, like Mr Obama, who wish to rob Peter to pay Paul as a remedy for capitalism’s supposed “unfairness.”

But such unfairness is as chimerical as capitalism itself, in my view, and a result of the same conceptual confusion. When those of us who don’t like moral arrogance of the self-appointed wealth-spreaders use the terms “capitalist” and “capitalism” to describe what we believe instead, we hand an instant advantage to the Joseph Stiglitzes and the Barack Obamas of the world. Once the believers in economic freedom have identified themselves with an -ism, they have effectively acknowledged that what they believe in is the same kind of thing the socialists believe in, namely a system designed by intellectuals (another word that I think we should shun to describe ourselves) for the production of a utopian outcomes. The two sides must then engage in argument over the question of which system “works” — what can capitalism do for me? — with the implicit understanding that what it would mean for either system to work would be a realization of the same ideal society.

What is called capitalism, however, is not such a system — or any sort of system. It is the name given by socialists to the way reality works, regardless of all –isms, which belong to the realm of political fantasy. Anyone who lived under Soviet socialism can tell you that. “We pretend to work, and they pretend to pay us,” as the old saying went. That was what socialism meant for most Russians. But while the country was officially socialist, the free markets of so-called “capitalism” continued to function, as they always do, in the form of a vast black economy to which the authorities were mostly forced to turn a blind eye. The only difference between Russia then and officially socialist China now is that, by legalizing the free economy, China has removed a great many of the costs of doing business under socialism and so allowed the country to thrive in a way that Russia’s form of cronyism — not “crony capitalism,” please — still has not managed there. And so life goes on, magnificently heedless of our plans for Life 2.0.

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