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What is Freemarket Capitalism?

F. Earle Fox

Despite the fact that freemarket capitalism has hands down beaten all forms of economic centralization, it remains a suspected bad egg because it does not appear to most people to stand on the moral high ground.  Communism won much of the 20th century because it created the illusion that it did stand there.  People did not run to be Communists because they read Marx, they ran there because it seemed the "right" way to do things, the best way to help the poor, etc. 

The best short way to describe (if not define) freemarket capitalism is, I think,

the (perhaps only) form of economic structure in which the rich are no longer able to capture the coercive power of government to enslave and plunder the poor.

We often want to equate capitalism with the "rich" folks.  That is a mistake.  Capitalism is more about the middle class than the rich.  Freemarket capitalism is what lifts the poor up into the entrepreneurial middle class.  The rich are not a problem or a threat to the welfare of others -- until they are able to commandeer the forces of government to make laws promoting and favoring their hold on power.  Left to themselves without being able to buy out politicians and control legislation, they are easily outvoted by the rest of us. 

Well, they are IF the "rest of us" have some Biblical and Godly common sense about the matter. 

Read Rodney Stark's superb book, The Victory of Reason: How Christianity Let to Freedom, Capitalism, and Western Success.  It describes exactly what the subtitle says.  In the northern Italian city states, citizens became free enough from centralized government so that they were able to begin developing the growing appreciation for God's creation as a good and reliable place to live and to move forward, and that included developing their own creative means of production and commerce.  The results were astounding. 

This quote from Rodney Stark puts the matter about as boldly as it can be put.  And Stark does a good job proving his case.  

    Christianity created Western Civilization. Had the followers of Jesus remained an obscure Jewish sect, most of you would not have learned to read and the rest of you would be reading from hand-copied scrolls. Without a theology committed to reason, progress, and moral equality, today the entire world would be about where non-European societies were in, say, in 1800:
    A world with many astrologers and alchemists but no scientists. A world of despots, lacking universities, banks, factories, eyeglasses, chimneys, and pianos. A world where most infants do not live to the age of five and many women die in childbirth -- a world truly living in "dark ages".   P. 233.

If that seems absurd, consider the following:

    One of the things we were asked to look into was what accounted for the success, in fact, the pre-eminence of the West all over the world. We studied everything we could from the historical, political, economic, and cultural perspective. At first, we thought it was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity. That is why the West is so powerful. The Christian moral foundation of social and cultural life was what made possible the emergence of capitalism and then the successful transition to democratic politics. We donít have any doubt about this.       P. 235.

And who would write such outrageous prose? Stark introduced that paragraph as a "recent statement by one of Communist Chinaís leading scholars". Perhaps the same Chinese communist leader who said that if he had his choice of a national religion, it would be Christianity because it was the Christians, he said, who were taking care of the social problems, reaching out to the poor and needy.  Quite a change from Mao Tse Tung, who is famous for his claim that morality proceeds out of the other end of a gun barrel. 

Honest followers of Jesus Christ will always be doing those things admired by the Chinese.  Of what other religion or philosophy can that be said? 

Freemarket capitalism can survive only under a government limited to being essentially
            (1) the referee for, and defender of, and administrator for the public space,
                    the level playing field on which we are all to meet and debate public policy; and,
            (2) the protector against foreign invasion and internal strife.

Freemarket capitalism, by definition, cannot survive government control of the economy.  The "free" part of the freemarket means free from government control so that the market is able to make its own adjustments as situations develop.   We have found out from massive devastating experience that bureaucrats cannot manage an economy. 

But they can destroy one.  That happens when government and commerce begin to collude in order to put the force of civil government behind the money interests of commercial powers.  Beyond being the referee for (and collecting taxes from) the commercial realm, government has little or no place in it at all.

So we must mount a movement for separation of Economy & State (along with separation of Church & State and of School & State). 

Mexico is a good example of a rich country with enslaved peasants, who are unable, because the rich/powerful will not allow them, to participate in the riches of their economy.  If we want to help the Mexican poor, we MUST openly and firmly urge the Mexican people to mount an American (Biblical) style revolution, which will force the control-minded out of control, and allow honest elections. 

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Date Posted -  06/03/2008   -   Date Last Edited - 07/07/2012