Tuesday, July 16, 2019

Reisman vs. Bylund: Should We Continue to Use the Word 'Capitalism'?

This exchange recently took place on Twitter:

I am in the Reisman camp on this. Over time the meaning of words can change, some times it makes sense to battle against the change other times it doesn't.

For example, the word equality as used in the Declaration of Independence meant a shortcut version of "equality before the law.". Now, when most hear equality, they think equality of opportunity or equality of outcome. Thus, to use the word equality and mean the sense in which it was used in the Declaration requires explanatory context. This is not a  bad thing since the context educates those who have previously failed to understand how the word was used in the Declaration and its more sophisticated meaning that actually contradicts the more modern usage.

The case with the word capitalism is of the same nature. The original free-market advocates who used the term capitalism in the sense described by Prof. Reisman meant a very specific kind of societal structure that we can for short-hand call free markets. This is far different from the way the word capitalism is used to actually describe crony capitalism. But it is extremely valuable to teach the person who holds that "crony capitalism" and "capitalism" are synonyms that there is, in fact, a societal structure that is based on capital that is not crony.

To get this differentiation into a person's head is the first step in getting him to recognize that capital, business operations and entrepreneurship are not necessarily tied together with cronyism.

In other words, we should fight for the original meaning of capitalism and use the fight as an educational weapon, not surrender the term to the definition created by commies to distort the picture as if socialism/communism is the only alternative to crony capitalism.



  1. I agree with professor Reisman. Whereas for some, Capitalism is a loaded word and thus would prefer to call the economic process Proprietism or Free Market economics, the error in this thinking is that it conflates two things. One, the Free Market, is the economic system based on free and voluntary exchange of goods and services without undue hindrances. Two, the process of production based on private ownership of the means of production (in opposition to a communal ownership) and capital accumulation (i.e. savings), or Capitalism, is the economic process that thrives in a free market. You can have a free market with almost no capital investment - barterism is an example. But you cannot have capital investment without a free market and voluntary exchange of property. A lack of economic freedom explains why people in Communist regimes live like shipwrecked victims on a deserted island.

    What is missing is more vocal and eloquent defenders of Capitalism. Orange-peel-man is certainly the furthest from an advocate for free markets and Capitalism you can get: a con man who likes tariffs.

    1. Yours is a superb description of the Free Market vs. Capitalism. I tell people all the time that the latter operates within and stems from the former, and not the other way around.
      The word "freedom" is another word that has changed (for the worse) over time: It used to be nearly if not entirely synonymous with "liberty" (the absence of government constraint or coercion upon individual, peaceful activity), but now is used interchangeably with the word "power" (as in, political power granted by the government).
      And of course, we're all aware of how the word "liberal" has changed over time. I'm squarely in the camp of using the original terms to the extent possibly, with perhaps a qualifier to put it in context, as RW mentions (e.g., adding "Classical" when saying "Liberal," to denote the limited-government, night watchman state-type of liberalism of the 19th century, as opposed to neo-liberalism/progressivism of today...)

  2. Given the fact that too many people confuse "crony capitalism" with "capitalism," I'd be in favor of trying to get the term "free-market capitalism" going.

    1. I love the lack of ambiguity in your term best of all.

    2. Or "laissez-faire capitalism"...

  3. I'm all in with Reisman. Fight for it. If I use the term and am challenged, then yippee, I've engaged some numb nutz and can now educate his ass. They stole "liberal" way back when, and we're still treading water trying to reconcile the old usage (Bastiat) with the current (Ron Paul).
    I say, it stops HEAYAH!!!