I am fairly new to Libertarianism. I first properly came to learn about it (ironically) because of the recent rise in extreme leftism in South Africa. Through learning about this ideology, I have now become convinced that Libertarian ideas are the best way forward.
However, as per usual, the Far Left of South Africa isn’t exactly welcoming to ideas which are contrary to their own. There are a number of axioms and general dogmatisms which I view as not just being factually incorrect, but actually demonstrably false and (in my opinion) very immoral. I would like to deal with a certain leftist myth which, it seems, is often believed not just by the hard-line Bikoists, but also by the average South African who may not even take a great interest in politics. The myth in this case is that capitalism is an immoral system.
This unfortunate perception comes from a combination of scapegoating the upper class, propaganda but most of all a general misunderstanding of the nature free-market capitalism. Here I will explain a few ways in which free-market capitalism is moral.
Free-market capitalism is colour-blind
By its very nature, capitalism cannot have any kind of prejudice. Why? Simply put, it is bad for business. A shop which refuses to serve people belonging to a certain race immediately commits a grave business error as they cut out a huge potential group of consumers. Rather, capitalism rewards the hardworking regardless of any traits which they may have been born with. A capitalist’s ultimate motive is to make a profit and so it is in their best interest to put aside any pre-conceived notion they might have of a group of people belonging to any kind of race, ethnicity, religion or any other identity.
Free-market capitalism fulfills community needs
In a free market, an entrepreneur’s best shot at success is to provide goods or services which are desired by their community. This stimulates new ideas and generates creativity. Add competition into play here and you end up with a culture which strives for excellence, not mere adequacy. It creates an environment where people don’t have to feel like they are entitled to goods and services from the government. Instead, entrepreneurship become much more attractive in an environment where all barriers for businesses (taxes, job legislation, etc.) are removed. As a bonus, jobs are created and the community now can have more of their desires met without the government spending other citizens’ money on things to which those citizens didn’t consent*.
Free-market capitalism does not allow for harmful monopolies to occur
Monopolies are not intrinsically bad things. This might seem like a strange notion, but it happens more often than we realise. An example of a good monopoly could be the following: Person A is a baker who lives in a small town within a libertarian society. Person A is the only baker in a town and so he could be seen as having a monopoly in the baking industry in his town. This is not a bad thing because no other bakers have been forced (by government or other means) out of the baking industry and there is nothing stopping more from starting. Despite the fact that Person A has a monopoly, he still provides the town with the bread which they require and so everyone wins. Even if Person A was to slack in the quality of his bread (perhaps even an ergot infestation here and there), his lacking quality would simply create the opportunity for someone else to start baking even better bread. This way, a high quality is maintained.
To contrast this, when a government imposes a monopoly by force, this simply means the there are fewer jobs and those that are employed by a government firm are being paid with tax payers’ money. In a country like South Africa, which has a minutely small tax-paying population, this just means that the government is forced to invest money into their monopolised companies. This leads to many problems. Complacency among workers will develop with their standardised wages and working conditions which means the consumer has no choice but to pay for sub-par services. The cruel irony is that those people’s money was taxed from them to provide sub-par services. There is also theoretically no limit on what the government can charge as they have forcibly made their company immune to any kind of competition.
A rather unfortunate example of a harmful monopoly instituted by force would be everyone’s favourite electricity provider: Eskom. If our electricity suppliers were private, Eskom would be losing clients and would inevitably fall. Competition is necessary for a healthy economy and merely allows the consumer to get more for their money.
Free-market capitalism can protect the environment better than the government
This issue is particularly important in South Africa. South Africa contains multiple national parks and game reserves where millions of species of flora and fauna thrive. Many of these species are severely endangered due to the fact that most of the other African nations which they call home have been ravaged by war and bad leadership. Because of this, many African nations have become feeding grounds for poachers due to their severe poverty and by extension, terrible security. South Africa now has by far the largest rhinoceros population on the planet, however, poaching continues to be rife. In 2014, over 1 000 rhinos were killed, many of which were in game reserves governed by the organisation SAN Parks, a government organisation.
If game reserves were privatised, the owners themselves would be responsible for ensuring the security and conservation of their wildlife. Competition would once again come into play and game farms would look to build a reputation for having a plentiful and diverse range of wildlife. In addition to the profit motives, there exists a genuine concern among conservationists and wildlife enthusiast for the conservation of endangered species, the rhino being a very good example. For many, conservation is a passion, profit merely makes conservation possible.
On the opposite end of the spectrum, government mismanagement has proven itself to be catastrophic when it comes to conservation. Decorated South African conservationist Lawrence Anthony wrote in his book The Last Rhinos, of the extraordinarily frustrating bureaucracy which ultimately did not allow him to rescue the last 14 Northern White Rhinos remaining in the wild in the Democratic Republic of Congo’s Garamba National Park. As a result, the Northern White Rhino became extinct in the wild. This could have easily been avoided if there was no government involvement.
Free-market capitalism allows freedom
As Frédéric Bastiat so rightly says in The Law:
“Life, faculties, production – in other words, individuality, liberty, property – this is man. And in spite of the cunning of the artful political leaders, these three gifts from God precede all human legislation, and are superior to it.”
A free market is an instrument of the public to express their desires, provide for themselves with profit and indeed to question the established norms. The free market – by its very nature – does not infringe on any of our rights as people and actually helps maintain them. Due to the above reasons, a capitalist can only be successful if they are not infringing on anyone else’s liberties. It affords the consumer the ability to choose what they want to pay money for. The free market is a system which stimulates new ideas to satisfy humanity’s unlimited needs and wants with limited resources. It is economics in its purest and most fundamental form. If there was ever an economic system that granted people freedom and allowed people to get themselves out of financial dire straits, it is free-market capitalism.
In short, capitalism, if done correctly within a strictly free market, certainly does strike one as being an incredible moral system. It is a system of freedom and justice where the hardworking are rewarded, new ideas are stimulated and the consumer reaps the benefits.
*for further reading on the immorality of taxation, see The Law by Frédéric Bastiat
Author: Nicholas Babaya matriculated from Rondebosch Boys High School in November 2015, and will be pursuing an undergraduate degree in law at Rhodes University in 2016.