By Jonathan Carmichael
An opinion piece in The Hill titled, “Let capitalism—not government—build needed infrastructure,” deserves both praise and criticism. The author argues that infrastructure owned and maintained by government (e.g., bridges, highways, pipelines, dams, and airports), should be privatized. In his words, “opening the infrastructure market to private ownership would ensure sufficient funding and would introduce innovation and cost-effectiveness.”
In that, the author is correct. A proper government—one that exists to protect individual rights—has no business building and maintaining infrastructure. In a truly free market, which can only exist under capitalism, the best ideas, when properly executed, will rise to the top—not by subsidies or government protection from competition—but on merit; because they provide consumers with a superior value.
Rather than defend capitalism, however, the author undermines any honest attempt to do so by propounding the idea that capitalism is problematic. For example, the author refers to “inherent warts and blemishes of the capitalist system” and presupposes that prior to now, it was “imperative for the government . . . to finance, own and maintain the country’s infrastructure.”
author commits multiple fallacies, but the focus of this post is to address his
incorrect concept of capitalism; particularly, his act of equating capitalism
with the mixed economy; the mix being that of capitalism and statism, which, in
both theory and practice, is anti-capitalist.
is a common misidentification in which one recognizes legitimate problems
existing under our mixed economy (e.g., cronyism, political inequality,
government protected monopolies) and wrongfully associates them with capitalism
rather than their actual cause, the statist elements of the mixed economy. One
who accepts this false concept of
capitalism, therefore, accepts that capitalism has “inherent warts and
and statism are opposites. Capitalism is a corollary to individualism and
logically follows from the idea that each and every individual possesses the
inalienable right to life, liberty, and the pursuit of happiness. Statism is a
corollary to collectivism and logically requires that some groups of
individuals sacrifice to other groups of individuals and live (or die) for the
state, the public, the community, the greater good, society, humanity, a race,
or some other collective. Just as good is to evil, freedom is to enslavement,
nutrition is to poison, and life is to death; capitalism is to statism.
of the inherent problems of the mixed economy are characteristics and
consequences of its statist elements; not of capitalism. Capitalism necessitates the absence of government
interference in the economy. Thus, capitalism exists only to the degree that
the economy is free of government interference.
few people make the distinction between capitalism and the mixed economy, and
even fewer identify the mixed economy’s statist elements as evil or inimical to
capitalism. Instead, most identify the mixed economy as capitalism and,
consequently, presuppose that capitalism is inherently problematic.
Consider freedom as it relates to each of the two opposing political philosophies of our mixed economy, statism and capitalism. Statist actions and practices—whether of the regulatory or welfare entitlement variety—possess the distinction of denying freedom. In contrast, capitalism distinctly requires freedom: Freedom from government controls; freedom from force; freedom from coercion; freedom from regulation; freedom from government created barriers to market entry; freedom of thought and action; freedom of voluntary association; and freedom of voluntary trade.
act of denying, abating, and suppressing freedom from a given political
socio-economic system disqualifies it from being capitalism. In the 19th
century and early 20th century, the U.S. was as close to capitalism as any
country has ever been. Major progressive reforms under Woodrow Wilson and
again under FDR
moved the U.S. significantly away from capitalism and deeper into statism, and
subsequent presidents and congresses have continued the increase of statist
elements in the lives of Americans.
some pockets of capitalism still remain, and some industries are freer than
others; but don’t make the mistake of thinking that the mixed economy is
equivalent to or synonymous with capitalism. The concepts and, thus, the words
that identify them are not interchangeable.
borrow from Harry Binswanger’s 2013 Forbes
column titled, “Statism: Whether Fascist or Communist, It’s The Deadly Opposite
A government that taxes 40 percent or more of our income, that controls our medical care, that regulates business so thoroughly that every firm large enough to afford it has a department of “compliance,” a government that controls the money supply, sets bank reserve-ratios, regulates stock offerings, margin-ratios, home construction, determines what pharmaceuticals and medical innovations can be sold, operates schools and universities, runs the passenger rail system, forbids “offensive” speech, increasingly intervenes in diet, subsidizes agriculture and “green” businesses, imposes tariffs, decides which businesses may merge, and . . . spies on its own citizens–is not a government remotely consistent with capitalism.
author of The Hill piece correctly
acknowledges that government ownership of infrastructure puts it “in a position
to abuse its power with impunity.” He observes that the government has “no
incentive to keep projects on schedule and within budget,” or to concern itself
with product quality. He points out that the government is guilty of
“manipulating supply and demand to justify constantly raising taxes, user fees
and tolls, ostensibly for building and maintaining roads while neglecting the
assets’ maintenance and repair.”
to the author for identifying several logical consequences that arise from
government involvement in the economy. Indeed, these and many more logical
consequences apply to all areas of the economy, not only infrastructure.
his correct acknowledgements and good ideas, the author does more damage than
good to the pro-capitalism argument. His credential as a senior fellow at a
conservative think tank only makes matters worse. This is a person who most
Americans associate with capitalism due to his “conservative” credentials. He
is a presumed authority on the matter. What conservatives actually stand for,
however, is a topic for a later date.
her essay, “The Anatomy of Compromise” as published in her book, Capitalism: The Unknown Ideal, Ayn Rand
identified a few rules (as she called them) “about the working of principles in
practice and about the relationship of principles to goals.” One of the rules
is as follows: “When opposite basic principles are clearly and openly defined,
it works to the advantage of the rational side; when they are not clearly defined, but are hidden
or evaded, it works to the advantage of the irrational side.” Rand
In order to win, the rational side of any controversy requires that its goals be understood; it has nothing to hide, since reality is its ally. The irrational side has to deceive, to confuse, to evade, to hide its goals. Fog, murk, and blindness are not the tools of reason; they are the only tools of irrationality.
One who intends to argue for anything in honest standing
should educate himself on the principles of both his and his opposition’s
positions and use clearly defined terms. Advocates of capitalism are no
defend capitalism unequivocally and unapologetically, perhaps the easiest thing
any honest of its advocates can do is to avoid misidentifying the current
system (the mixed economy) as capitalism. Furthermore, a defender of capitalism—or
any honest individual—should correct any misuse of the term, capitalism;
especially when it explicates or implies subsumed principles contrary to
educate yourself on the principles of capitalism and statism, read Ayn Rand’s Capitalism: The Unknown Ideal and
encourage others to do the same.
 Markovsky, A. (2018, Dec 10). Let capitalism — not government — build needed
infrastructure. The Hill.
 Markovsky, (2018, Dec 10). Let capitalism.
 This is an example of what Ayn Rand
called the fallacy of package-dealing.
Act, Federal Income Tax, Federal Reserve Act, Federal Trade Commission Act,
Clayton Antitrust Act, Adamson Act.
 The New Deal, Social Security Administration, etc.
 Binswanger, H. (2013, Nov 13). Statism: Whether Fascist or Communist, It’s The Deadly
Opposite of Capitalism. Forbes.
 Binswanger, (2013, Nov 13). Statism:.
 Markovsky, (2018, Dec 10). Let capitalism.
 Rand, A. (1966). The Anatomy of Compromise. In A.
Rand, Capitalism: The Unknown Ideal.
 Rand, (1966). The Anatomy of Compromise..
 Rand, Ayn, Nathaniel Branden, Alan
Greenspan, and Robert Hessen. 1967. Capitalism: the unknown ideal. New York: Signet.