‘’ They fail to realize that the shocking circumstances they describe are the outcome of the absence of capitalism, the remnants of the precapitalistic past or the effects of policies sabotaging the operation of capitalism.’’
Critics level two charges against capitalism: First, they say, that the possession of a motor car, a television set and a refrigerator does not make a man happy. Secondly, they add, that there are still people who own none of these gadgets.
81 John Ruskin will be remembered-together with Carlyle, the Webbs, Bernard Shaw and some others-as one of the gravediggers of British freedom, civilization and prosperity. He was a bigoted detractor of the market economy and a romantic eulogist of the guilds. He paid homage to the arts of earlier centuries. But when he faced the work of a great living artist, Whistler, he dispraised it in such foul and objurgatory language that he was sued for libel and found guilty by the jury. It was the writings of Ruskin that popularized the prejudice that capitalism, apart from being a bad economic system, has substituted ugliness for beauty, pettiness for grandeur, trash for art.
90 It is nonsensical to blame capitalism and the capitalistic nations of the West for the plight the backward peoples have brought upon themselves.
Capital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving.
The accumulation of new capital, the maintenance of previously accumulated capital and the utilization of capital for raising the productivity of human effort are the fruits of purposive human action. They are the outcome of the con· duct of thrifty people who save and abstain from dissaving, viz., the capitalists who earn interest; and of people who succeed in utilizing the capital available for the best possible satisfaction of the needs of the consumers, viz., the enterpreneurs who earn profit. Neither If the wage earners were to behave in the way which the spurious "iron law of wages" describes and would know of no use for their earnings other than to feed and to procreate more offspring, the increase in capital accumulated would keep pace with the increase in population figures. All the benefits derived from the accumulation of additional capital would be absorbed by multiplying the number of people. However, men do not respond to an improvement in the external conditions of their lives in the way in which rodents and germs do. They know also of other satisfactions than feeding and proliferation. Consequently, in the countries of capitalistic civilization, the increase of capital accumulated outruns the increase in population figures. To the extent that this happens, the marginal productivity of labor is increased as against the marginal productivity of the material factors of production. There emerges a tendency toward higher wage rates. The proportion of the total output of production that goes to the wage earners is enhanced as against that which goes as interest to the capitalists and as rent to the land owners.
None of the passionate tirades of Marx, Keynes and a host of less well known authors could show a weak point in the statement that there is only one means to raise wage rates permanently and for the benefit of all those eager to earn wages-namely, to accelerate the increase in capital available as against population. If this be "unjust," then the blame rests with nature and not with man.
97 What separates East and West is first of all the fact that the peoples of the East never conceived the idea of liberty.
The imperishable glory of the ancient Greeks was that they were the first to grasp the meaning and significance of institutions warranting liberty.
But nobody has ever contested that the idea of liberty originated in the cities of ancient Greece. The writings of Greek philosophers and historians transmitted it to the Romans and later to modern Europe and America. It became the essential concern of all Western plans for the establishment of the good society. It begot the laissez-faire philosophy to which mankind owes all the unprecedented achievements of the age of capitalism.
The purpose of all modern political and judicial institutions is to safeguard the individuals' freedom against encroachments on the part of the government. Representative government and the rule of law, the independence of courts and tribunals from interference on the part of administrative agencies, habeas corpus, judicial examination and redress of acts of the administration, freedom of speech and the press, separation of state and church, and many other institutions aimed at one end only: to restrain the discretion of the officeholders and to render the individuals free from their arbitrariness.