Killing Two Capitalist Myths

F.A. Hayek, a Libertarian Scholar and Stooge For Capitalism; Argued that Ruthless Capitalism was the Best Course For Humanity.

There is a widespread popular myth that the capitalists are entitled to their compensation, as well as the value of other peoples’ labor, simply because they take “risks” or because they come up with original ideas for production of goods. A second popular myth is that we cannot criticize capitalism as a system, because capitalism has made our modern lifestyle possible. In other words, capitalism has provided us with consumer goods,  should all just shut up and stop complaining. These are not ideas exclusive only to radical libertarians or Austrian School advocates; they are far more commonly accepted even by people who admit that there are many problems with the capitalist system.

The Theory of “Original Risk”
First, let’s look at this matter of “risk.” Who takes more risks—the worker or the capitalist? The capitalist is someone who has capital, at least enough to invest in some industry or business. After all, this is what we are speaking of when we speak about capitalists taking risks—they invest in some business or industry with the hopes of getting a high return on their investment. Recent events have shown us how wonderfully this system works, but let’s ignore that for a moment. What happens when the capitalist takes a risk and loses? Most likely, he/she will not lose everything unless they have been very foolish with their money and careless with their investments. Even if that should happen, what is the absolute worst that could occur? They will have to work for a living, like everyone else. How dreadful!

Now what about the worker’s risk? The worker is already forced into a life-or-death situation, as working people have no means of subsistence other than their ability to work. They are forced by necessity to work for the capitalist by his or her conditions in order to be paid money to live. Thus for many men, women and even underage children, the worker may often be risking physical injury, disease or death. Millions of workers worldwide are forced to risk their health and life by working long hours under extremely dangerous conditions such as exposure to toxic fumes, heavy machinery, unsafe structures and so on.

As if that wasn’t enough, the worker is also taking a risk when they trust that the company they work for isn’t going to go belly-up within a short time, putting them back out on the street. This is especially devastating in these days when unemployment is very high. Workers may have to relocate and disrupt their lives just to find a decent job. When they are laid off soon after relocating, all their plans are shattered. The capitalist by stark contrast, risks at most being reduced to the state of the worker. Clearly, the worker risks far more, and yet their compensation is far less than that of the capitalist, thus dispelling the idea that risk entitles one to wealth.

Capital, in a capitalist system, is generally accumulated via surplus value; that is the exploitation of workers’ labor. Moreover, what about those capitalists who make wise investments, searching for investments which will guarantee profitable returns? Should they be penalized or taxed in some way for not making risky investments? But how are investments risky when the richest capitalists can trust the governments they control to bail them out if they should fail? Those banks and companies which invested their money weren’t risking anything at all, since the government promptly compensated them for their failure at the expense of the public.

“Capitalism Has Given You All This!”

Now for the next item on the chopping block. In discussions about capitalism, we have heard many times the argument that reduces anti-capitalism and anti-imperialism to complaining: “You complain so much about capitalism, but capitalism is why you have a computer, phones, toasters, clothes…” and so on and so forth.

This argument essentially says that we have no right to be anti-capitalist because, presumably, capitalism is providing a better standard of living. There are many flaws with this argument. Foremost is the fact that capitalism is not providing such a wonderful lifestyle for the majority of the world’s population. More than half the world’s population—about 3 billion people—currently lives on less than a few dollars a day. Imagine if we were to suggest that African-Americans had no right to complain about the system of segregation and Jim Crow laws in the South simply because they had it worse under slavery. Slavery was objectively worse, as feudalism is objectively worse than capitalism, but that does not mean that the post-slavery society of the South should be beyond reproach. As well, this logic must also mean that because of the inventions that feudalism gave us, which we still use to this day, we must not criticize the feudal system of serfs, kings and lords.

We must also consider that in many countries which formerly had socialist systems, including revisionist market-socialist systems, the standard of living has dropped, often quite dramatically, with frightening consequences for many populations. It’s easy to look at modern-day Eastern European cities, note the people carrying expensive cell phones, the internet cafes, and the modern clubs and restaurants and conclude that this is an improvement over the late “socialist” societies which previously existed here. However, let us be honest—many of the innovations that make these societies bearable today did not exist even in capitalist societies in the last days of the USSR and Eastern Bloc, such as our wonderful modern cell phones.

These countries now import many luxuries and consumer goods that are out of reach for most of the world population. Not to mention that many people in the West acquired their homes, cars, and other luxury consumer goods through credit, and now we can all see the results of that scheme.

In Moscow, people work ridiculously long hours just to get a piece of that capitalist pie, to the point where many people will tell you that they have virtually no time for recreation. By contrast, the socialist government, even in the corrupt, revisionist post-Khrushchev era made it a point to ensure that workers had access to recreation and cultural facilities, and provided workers with the means to develop their various talents. When we look at the negative aspects of full capitalist restoration, such as plunging birthrates, migration, corruption, drug addiction, shortened life-spans, ethnic violence, sex slavery, and a failing social welfare system, it is clear that while it can be said that Western capitalist countries had a higher-standard of living compared to the socialist bloc countries, the standard of living in these countries today is in many ways worse.

So much worse in fact, that a number of articles from sources including The Wall Street Journal and the AFP report that recent polls show a growing discontent with capitalism and a rising opinion that life under “communism” was in many ways better. So to say that capitalism has provided us a much better world today is clearly dishonest as it has also provided a much worse standard of living for many people.

Now if we consider the argument that we should be grateful that capitalism has produced everything we use today, we see that it is also illogical on the grounds that capitalism has been the dominant system for several hundred years, and it has had time to develop unlike the first attempts at building socialism. To say that we can’t criticize capitalism because we depend on it today would be like attacking capitalism from a feudal perspective, pointing out that capitalism could not have accomplished anything without feudalism. How can the pro-capitalist sing the praises of capitalist innovation when so much of that innovation is based on previous technology, in turn based on previous scientific knowledge and methodology, all dating back centuries, even thousands of years in some cases, developed by societies which existed long before the development of capitalism and the money-based economy. Does capitalism owe a debt to the theocratic Islamic Caliphate, under which a great deal of crucial inventions and scientific advances were made? Try that argument next time a capitalist apologist tells you to thank capitalism.

Class Nature & Origin of these Arguments
These myths persist like urban legends. They are often the products of various think tanks and right-wing organizations who bankroll the books, television, and radio programs of pundits whose job is to convince working class people to align with the businessmen at the top, rather than consider their own interests.

Propoganda has Always Played a Large Role in the Ruling Class' Fear Campaigns

Because there is an inherent contradiction between these two classes, in that what benefits one class necessarily comes at the expense of the other, the apologists for capitalism have little choice but to resort to illogical arguments in favor of capitalism. No wonder that right-wing punditry seems to prefer focusing on social issues, creating false outrages every week, and generally relying mainly on emotional appeals, especially fear.


Explaining that a capitalist deserves to profit off of others’ labor because he allegedly takes a risk simply does not stand up to scrutiny. Thus, the right today seems far more interested in convincing our fellow workers that they are in danger of a Marxist dictatorship, being taken over by “illegal aliens,” that their religion is under attack, and so forth. We must obviously engage and expose these lies, since if we attack the foundations of those myths which are used to justify capitalism in the eyes of the worker, it can only help towards building class consciousness. When class consciousness becomes strong enough, and the working class is fully aware of their class interests, all the whining, fear-mongering, and conspiracies of a thousand Glenn Becks will be able to throw the working class off their course toward revolution.

Categories: Colonialism, Economic Exploitation, Economics, Economy, Former Eastern Bloc, History, Imperialism, Imperialist War, Labor, Russia, Soviet Union (USSR), Theory, World History

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