Morals and markets

THE BALTIMORE SUN

It's not too hard to find someone who would say - apologetically, perhaps - that capitalism is the most practical economic system. But the most moral? That's the argument Andrew Bernstein makes.

The philosophy professor - author of The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire, published in September - defends and celebrates capitalism as "the system of freedom." He is an objectivist, a follower of the individualistic philosophy created by Ayn Rand, best known for the novels Atlas Shrugged and The Fountainhead.

Bernstein, 54, a lecturer at Marist College in New York, was introduced to objectivism as a 16-year-old high school student in Brooklyn and was immediately hooked.

Now a resident of Cold Spring, N.Y., he has master's and doctoral degrees in philosophy from the City University of New York. He lectures and writes for the Ayn Rand Institute in Irvine, Calif., and has also written a novel, Heart of a Pagan. Bernstein will give a speech about capitalism Saturday at Howard Community College in Columbia.

Why do you say capitalism is the only system that defends individual rights? How do socialism and other systems impinge on liberty?

What true capitalism does is limits the power of government. ... Individuals are free to pursue their lives as they see fit, so long as they don't engage in criminal actions. ... Socialism and other political systems, they're basically examples of statism. There is no Bill of Rights guaranteeing individuals certain inalienable rights, and the government is permitted to violate individual rights constantly, whether they steal your money through taxation or they don't like your religion or what class you come from, so they arrest you and put you in a gulag. These are dictatorial forms of the government, and the government has no legal restrictions on its ability to initiate force against its own citizens.

Defenders of statism will often say things like, "Well, they don't have crime in the streets in China." But the point of course is that the criminals are in the government. The communists or the Nazis may make the streets safer temporarily, but they murder 20 million - or in the case of Mao, 50 or 60 million - of their own citizens. ... Statism is extremely hazardous to your health.

Stalin said that one human murder is a tragedy, but a million is a statistic. It's so vast that people just can't wrap their wits about it, so communists can get away with it because it's just numbers to people.

Why do you call capitalism the most moral system?

By protecting your rights and mine, it leaves an individual free to pursue his own happiness. ... In a capitalist society, you are free to pursue every value that makes your life meaningful. That's the reason immigrants have always come here, and want to come here.

Under the statist regimes, you're not permitted to open a business, you're not permitted to hold or practice your own religious views, you're not permitted to speak out against governmental policy.

Is America more or less capitalist than it used to be?

Less so. We're a mixed-economy welfare state. I think it's still a basically capitalist system: There's still the basic principle of individual rights, we still have the Bill of Rights guaranteeing certain rights, but governmental power has been encroaching on individual rights for at least 100 years. You see it very clearly in the economic sphere with the regulatory agencies. So, for example, the EPA won't let people develop their own property. The government - through means like OSHA - just makes it impossible or enormously difficult to be an entrepreneur and have your own business. For instance, I don't think Henry Ford could do today what he did 100 years ago. Between the EPA and OSHA and the IRS and other regulatory agencies, I think he'd be out of business. ...

The recent Supreme Court ruling upholding and broadening the principle of eminent domain was just horrifying. They have to pay fair market value, but that's not the point - they can still take your land from you without consent. I think the conclusion is, in many ways, we were freer in the late 19th century - especially in the Northern states, where there were no Jim Crow laws - than we are today. What has happened over the 20th century is what they call creeping socialism, or what may more properly be called creeping statism.

What society is most capitalist, in your opinion?

Before the Communists took over, you could have made a case for Hong Kong, but I think the good ol' US of A is still the freest country in the world. For all its creeping statism and the drift toward government control, I think the Constitution and the Bill of Rights still guarantees us more liberty than any other country can provide, which is the main reason why immigrants from other countries want to come here.

Why did you write The Capitalist Manifesto?

With capitalism under attack from so many different religious or intellectual dominations, I think it's crucial to support the system that has provided freedom and prosperity for billions of human beings. ... Politically, there was a time when Republicans were sort of - at least halfheartedly - committed to capitalism and the rights of the individual. Certainly not anymore.

There has been an increasing amount of upheaval in the economy - companies cutting pensions, manufacturers "offshoring" jobs U.S. workers once held. Is this pure capitalism at work? Is it moral?

I'm not an economist, I'm only a philosopher. But I think ... in a free society, it has to be held that it is the inalienable right of a private company to hire workers anywhere in the world that they want and to lay off workers that by their standards don't do the job as effectively or as inexpensively. Morally, yes, these are examples of capitalism. Economically, I think it's good, sound business sense. The companies do it because they can hire competent foreign workers at a lower wage rate than competent American workers.

The reason for that is, American labor unions, backed by the government, have pushed wages way above market scale, way above market level. I think this comes out of Economics 101: In many forms, if the government imposes wage rates that are too high, the only possible result is unemployment. Minimum-wage laws, for instance - the only thing they could do or have done is price out of the market some unskilled worker whose work is not worth that to the employer.

Why do you fault labor unions?

The unions are the worst enemy of the working man that have ever existed. What makes it all the worse is they pose as the friend and defender of the working man. Again, it's Economics 101 - the only way you can raise living standards across the board in a society for millions of people, including the workers, is by increasing productivity. You have to create more of the goods and services that human beings require. Great supply will bring the prices down. That's when real wages rise - that is, income in terms of purchasing power.

The labor unions, backed by the government, violate that in a hundred ways. By raising monetary wages, they cause unemployment, so there's fewer people working, fewer people producing. Their real goal is not to produce, their real goal is to get as many members of the labor union working as possible. ... The government-backed labor unions undercut productivity and consequently undercut the real wages of every worker in the country. The one way to increase everybody's wealth, including the workers, is to break the power of the unions. In a free country, the government does not interfere in the economic system - neither on the side of employers nor on the side of the employees. The government simply makes sure that nobody's rights are violated.

What do you think of Maryland's new law requiring Wal-Mart to pay 8 percent of its payroll on worker health care?

It's immoral as hell. In a free society, the government has no moral right to force any individual, any honest individual, to do anything.

You say your book is grounded in Ayn Rand's philosophy of objectivism. What is objectivism?

She's given us for the first time in history a philosophy that stresses reason, the rights of a human being to pursue their own happiness, freedom - these are the ideas that the United States was founded on, but Ayn Rand provided the philosophic foundation and validation.

jamie.smith.hopkins@baltsun.com

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