Taking a break from our irregular programming for a brief diversion into economics and the psychology of envy, Larry J. Sechrest's talk The Anti-Capitalists: Barbarians at the Gate (video) made for a good start to a lazy, sunny Saturday:

The case against capitalism is indefensible. It is smoke and mirrors. It is rooted in envy and malice. It is fueled by a stunning ignorance of sound economics, which is part and parcel of a broader rejection of reason itself.

Sechrest quotes the grand old man of economics and classical liberalism, Ludwig von Mises, who posited that the misunderstanding and warped perspective many people cultivate about capitalism stems from two basic factors: envy and ignorance. On the subject of envy, Mises wrote:

In a society based on caste and status, the individual can ascribe adverse fate to conditions beyond his own control. [For instance] he is a slave because the superhuman powers that determine all becoming had assigned him this rank. [...] It is quite another thing under capitalism. Here everybody's station in life depends on his own doing [...] The sway of the principle, to each according to his accomplishments, does not allow of any excuse for personal shortcomings. [...]

What makes many feel unhappy under capitalism is the fact that capitalism grants to each the opportunity to attain the most desirable positions which, of course, can only be attained by a few. Whatever a man may have gained for himself, it is mostly a mere fraction of what his ambition has impelled him to win. There are always before his eyes people who have succeeded where he failed. [...] The price and market system of capitalism is such a society in which merit and achievements determine a man's success or failure.

— Ludwig von Mises, The Anti-Capitalistic Mentality

In other words, a great many people vaguely perceive capitalism to be a zero-sum game where somebody else winning must mean that they themselves, somehow, lose. This misplaced envy is sustained by the second cause Mises identified, namely ignorance of what capitalism even is. As Sechrest touches upon in his talk, capitalism is in fact the only positive-sum game in town, and what people think of as capitalism today is substantially something else altogether:

I am amazed by how often I hear people speak of "the free market," but somehow manage to incorporate within that notion the presence of the Federal Reserve, Social Security, the IRS, ad nauseum. What part of the word "free" do they not comprehend? In any case, I for one obviously do not refer to that tortured, disfigured, tormented, twisted gargoyle which usually masquerades as capitalism today. [...]

Indeed, how can anyone find capitalism objectionable at all once one recognizes that it has — even in its attenuated form — increased the standard of living so dramatically that an average person [in the developed world] now daily enjoys "luxuries" which hereditary monarchs could not boast of a mere 200 years ago?

What's not explicitly mentioned in the talk, but will be evident to anyone who has some historical perspective, is that the semantics of words are in fact appropriated (or corrupted, if you will) as time goes by, so we shouldn't be all that surprised at the public-relations predicament that capitalism finds itself in.

To keep this somewhat on topic through the use of a pseudo-computational analogy: words are nothing but syntactic, indirect pointers representing concepts and ideas; and the idea space address that the pointer references can change both implicitly (misunderstandings being one equivalent of cosmic rays and bugs) and explicitly (propaganda and misinformation working as memetic viruses).

This linguistic drift means that I, for example, could have in broad terms satisfactorily described myself as a 'liberal' a century or more ago, but today must resort to a slightly more cumbersome, and slightly broader, word 'libertarian' because the meaning of the original word has been appropriated for other purposes.

The same has happened to the word 'capitalism'. Much of the public in the developed world do persist in thinking that we have 'capitalism' and a 'free market', when in fact what we have are increasingly handicapped perversions (twisted gargoyles, per Sechrest's remark) of anything that those words used to mean and continue to mean to most economists. (Ron Paul argues we should call it what it is, namely inflationism or interventionism, not capitalism.)

Now, the aforementioned particular cases do partly represent increased sophistication in the differentiation of the various shades of economic theory; that is, a broadening of the scope of the original term. But that redefinition of scope is often the very means of the appropriation and corruption of the original intent. For example, if the definition of 'freedom' suffers scope creep so as to also include the state of being "free as a slave at the point of a gun", then there's little doubt that the original meaning has been appropriated beyond any hope of its recovery.

This is a form of inflation of natural language, where the original meaning (that is, value) of words is diluted and ultimately lost. To regain some explicit semblance of what the words should mean, it becomes necessary to add a host of cumbersome adjectives, as in 'laissez-faire capitalism'. Eventually, the list of adjectives grows long enough to be impractical, and a new word altogether must be coined in order to save the original concept. In the meantime, the unadorned original word (potentially) continues earning a bad name for itself.

In arguments among laymen (and this includes most politicians, sadly) how can any genuine understanding be achieved when the very terms we use are founded on such undesirable, yet most often imperceptible, quicksand? Witness all the uproar caused by a scientifically illiterate public's misunderstanding of scientific 'theories'. (As I'm sure you know, a 'theory' in science would correctly be colloquially described as a 'fact', but most non-scientists persist in misunderstanding it as something akin to what 'hypothesis' means in science.)

Winston Churchill famously lamented that "the best argument against democracy is a five-minute conversation with the average voter." That's perhaps a tad harsh, but I can imagine many an economist thinking substantially the same when they advise: be careful what you wish for, lest it come true.

As for you, dear anonymous reader, if you think capitalism is simply evil and that the collectivist undertone of John Lennon's Imagine portrays a desirable and sustainable future (it's okay - I'll confess I once did, too, when I was very young and ill-informed), do peruse The Anti-Capitalists: Barbarians at the Gate and The Anti-Capitalistic Mentality to expand your perspective and to come to better understand how, exactly, you came to be infected with such an absurd meme. After all, pseudo-economic doctrines like socialism are to capitalism what astrology is to astronomy, stork theory to sex theory, creationism to evolutionary biology, and unreason to reason. Just say no and stop it!