Capitalism vs. Statism: Racism and Prejudice; Summary

#14 in a series of Think Right or Wrong, Not Left or Right: A 21st Century Citizen Guide (2nd Expanded Edition)

Note to readers: This week’s serial installment wraps up of the chapter on capitalism with its final virtue and a summary of what we’ve covered so far. Next week, we’ll start Part II of the book “From Here to There” charting a path how to get from today’s welfare statist to tomorrow’s capitalist society. Can’t wait? Buy the book using the links further down.

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5.20 Capitalism Relegates Racism and Prejudice to the Fringes of Society

Racism is the oldest and most primitive form of collectivism. It has probably been around since Homo Sapiens first ran into the Neanderthals and decided that we were better than them based on looks and behavior (Disclaimer: 23andMe tells me that I have 2% Neanderthal in me). Prejudice casts a wider collectivist net that includes, but is not limited to, irrational bias based on race. According to Wikipedia:

Prejudice is an affective feeling towards a person based on their perceived group membership. The word is often used to refer to a preconceived, usually unfavorable, evaluation of another person based on that person’s political affiliation, sex, gender, beliefs, values, social class, age, disability, religion, sexuality, race ethnicity, language, nationality, beauty, occupation, education, criminality, sport team affiliation or other personal characteristics.16

Both racism and prejudice are vast areas of study and probably more factually and emotionally fraught than most other subjects. Here, we can only scratch the surface. We’ll discuss how statism, with its base in collectivism and focus on alleged group “rights,” perpetuates racism and prejudice, while capitalism, with its foundation in individualism and recognition of individual rights as the only rights, relegates racism and prejudice to the fringes of society.

A collectivist categorizes people by their group membership (or memberships) rather than by their individual traits; your skin color, gender, age, class, or other group-based characteristic fundamentally defines who you are, rather than the virtues and vices you display as an individual.

Collectivists subscribe to the idea that your individual rights—your rights to life, liberty, property, and the pursuit of happiness—are subordinated to the alleged “rights” of the group or groups. They have a hard time breaking out of the “group-think” mentality. Therefore, when perceiving that the alleged “rights” of a certain group are violated because of racial or other prejudicial bias, they unfortunately prescribe more of the same medicine.

Take the example of a private college’s admission process resulting in a racial composition of the student body that diverges from the composition of the population as a whole. (We’re using a private college in the example, as public universities and colleges fall in a different category, being indirectly owned by the public supplying the funding. And we’re assuming our private college doesn’t receive any government funding with admission strings attached, allowing it to set admission standards as it sees fit. As we discussed earlier, in a capitalist social system, the limited role of government doesn’t include education, meaning that all universities and colleges are private and don’t receive any government funding.) Race-centered collectivists are likely to argue that the race or races underrepresented in the admissions are discriminated against, and that their rights as a group have been violated. It rarely matters if the admission process is based on rational standards such as academic or other achievements, if some arbitrary standard laid down by the founders of the college is the cause of the disparity, or if it can be explained by other reasons. For race-focused collectivists, it is enough that the racial composition is “off.” Their default remedy is typically race-based quotas guaranteeing a proportional share of spots for the underrepresented race. But quotas discriminate against people of different ethnic background who now see their chances for admission reduced regardless of qualifications. The “pro-quota” race-focused collectivists may think they have solved the discrimination against the race they are concerned about, but they have only shifted the discrimination to another race—they have “solved” alleged racism with more racism. Substitute gender, class, age, disability, religion or some other group construct for race, and you can see how across society, group-against-group “rights” clashes are perpetuated and will escalate if not counteracted.

With its base in collectivism, a statist social system, whether welfare statist, authoritarian or totalitarian, institutionalizes this group warfare. Government becomes a tool for implementing laws and regulations favoring different collectives or groups. Continuing with the college admission example, government higher education funding may become tied to implementing admission quotas, or such quotas may become law. As a result, racism becomes institutionalized.

An individualist, on the other hand, judges you not by the color of your skin or any other non-essential group membership characteristic, but by the content of your character, to paraphrase Martin Luther King Jr. Individualists see you as an independent, sovereign person who has the right to your own life, while recognizing that others have the same right to theirs. They subscribe to the idea that individual rights are the only rights, and that a group or collective cannot have any rights apart from the individual rights of its members.

Returning to our college admissions example, individualists acknowledge that a private college has the right to set its admission standards as it sees fit. If they consider the standards irrational (for example, truly racist), and if the cause is important to them, they may individually or as an ad hoc group with shared values advocate for change. They may try to persuade their fellow men and women to join the cause and, using the court of public opinion, put pressure on the college and on its donors and alumni to change the standards. But individualists don’t resort to asking the government to step in, because that would violate the rights of the college to determine its admission standards, however irrational they may be.

Capitalism is the individualist social system. We’ve discussed that under capitalism the only role of government is to protect our individual rights. And we explained when covering political equality that the limited role of government under capitalism ensures that special interest groups have no power to exert pressure on politicians to further their agendas. Therefore, society doesn’t run the risk of institutionalizing irrational ideas rooted in racism and prejudice.

However, it is important to note that capitalism most likely doesn’t eradicate racism and prejudice, at least not in the short term. Individuals have the right to adopt irrational ideas, and capitalism allows them to act on those ideas so long as they don’t violate the individual rights of others. For example, under capitalism a restaurant owner has the right to limit his clientele to whites only (or blacks only, or Jews only, etc.). But if he’s renting his building, the conditions of his lease may prevent such limitations; if a few such examples pop up around the country, landlords are sure to modify their terms to avoid potentially embarrassing tenants. And most suppliers will steer clear of this restaurant owner for fear of taking a hit to their reputation. Under capitalism, a racist restaurant owner may not change his mind, but to survive and thrive as a business owner, he will most likely keep his views private.

In a capitalist social system, this dynamic permeates society across industries and fields of study. Just as capitalism over time rewards the most rational and productive business ideas, so it rewards the most rational and productive views and beliefs. And just as capitalism relegates businesses that cannot compete to the fringes, so does it relegate to the fringes of society irrational views and beliefs facing overwhelming competition from rational ideas. Therefore, capitalism is the only social system that over time realizes the promise of a color-blind and non-prejudicial society.

5.21 Summary

This wraps up the overview of capitalism. You probably feel like you’re drinking from a fire hose. But hopefully this has provided a taste of what is possible, straightened out a few question marks, given some food for thought, and addressed a misconception or two.

To recap, we’ve concluded that under capitalism, with its foundation in individualism, its respect for and protection of individual rights, and its limited government,

• cronyism vanishes,

• monopolies are short-lived,

• political inequality is eliminated,

• envy is politically impotent,

• unimagined advances are unleashed,

• safety nets flourish,

• the unfortunate and underprivileged are empowered,

• recessions are few and mild,

• K–12 education is affordable and of high quality,

• housing is affordable,

• few need a college education,

• inflation is eliminated,

• the world is peaceful,

• the impact of natural disasters such as pandemics is reduced,

• taxes are in the past,

• infrastructure investments are optimized,

• immigration is an opportunity, not a threat,

• the environment gets the real deal, and

• racism and prejudice are relegated to the fringes of society.

Under capitalism, you have the right to be in control of your life while respecting that others have the right to be in control of theirs.

Conversely, under statism, with its foundation in collectivism, and with its individual rights violations and unlimited government,

• cronyism is rampant,

• monopolies are sustained,

• political inequality rules the day as access to political power is limited to those with money and connections,

• politicians successfully exploit envy with collectivist slogans,

• society faces slow stagnation and eventual demise,

• the safety net is of the one-size-fits-all variety and not very safe at all,

• the unfortunate and underprivileged are left behind,

• recessions are severe and more frequent than under capitalism,

• K–12 education is of poor quality and not subject to the quest for the unimagined

• housing is frequently unaffordable,

• higher education is expensive and almost required,

• inflation is a constant threat,

• conflict and war looms,

• natural disasters, including pandemics, have severe impact,

• taxes are ubiquitous,

• infrastructure investments are misallocated,

• immigrants are often a threat and political pawns,

• the environment suffers, and

• racism and prejudice are institutionalized.

Statism limits your ability to be in control of your life by assigning “rights” to collectives and groups that violate your individual rights. And the morally Wrong gets worse the more you are subordinated to the collective, the more your individual rights are violated, the more unlimited the government, and the more statist the society becomes.

+++++

This concludes the survey of the socio-political spectrum from morally Right to morally Wrong:

© 2022 Anders Ingemarson; from “Think Right or Wrong, Not Left or Right: A 21st Century Citizen Guide (2nd expanded edition)”

Congratulations on having made it this far. It was hopefully worth spending some extra time on capitalism. Welfare statism is unfortunately entrenched and usually is taken for granted in our society. Capitalism faces frequent criticism from both its openly collectivist detractors and its supposed defenders, many of whom are closet collectivists of the welfare statist kind. Therefore, it’s important to set the record straight.

The virtues of a capitalist social system, and the vices of welfare statism, are not limited to the areas we’ve covered in this chapter. You will find the same pattern in many other areas of society. Understanding why the protection of individual rights is critical for the morally Right to triumph allows you to apply that knowledge universally.

Much of this is perhaps new to you and may sound too good to be true. It is understandable if you’re on the fence. Whether you think there’s something to the arguments for capitalism or not, read on. In Part II we’ll discuss how to transition from today’s welfare statist social system to capitalism, which eventually will take us to Part III, the citizen guide, explaining how you can make a difference and move us towards capitalism with your activism and on election day. And if that doesn’t convince you, the “Further Reading” section at the end of the book offers leads for deeper dives. Finally, if you have questions, submit them on thinkrightorwrong.com and we’ll try to answer as soon as possible.

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