Capitalists and other Psychopaths

A Faible for Socialism

by Pater Tenebrarum

We have often remarked on the soft spot the New York Times has for socialism. It is after all the ideology that is most popular among the self-proclaimed intelligentsia, as can be easily ascertained by observing the unbroken support it enjoys in academe – in spite of the fact that the communist system has collapsed in what was the biggest bankruptcy in human history. Apparently they just failed to 'implement Marxism correctly'. It is easily forgotten today that Western intellectuals were cheering for the Soviet Union throughout its seven decade history, from the Lenin era until its ignominious demise.

The mass murderer Stalin was highly popular with our vaunted intellectuals, who gleefully quoted the strong growth in industrial production reported by the Soviets while the West was mired in the Great Depression. That Stalin used a reserve army of slaves from his Gulags to accomplish his alleged economic miracles was silently glossed over. The fact that Soviet production was completely chaotic due to the socialist economy's inability to calculate never rated a mention. The 'data' looked good, that was all that counted.

Keynesian economist Paul Samuelson was wondering as late as 1988 'when the Soviet Union would overtake the West economically' and Keynesian ex-Fed board member Alan Blinder opined as late as 1989 that the question was not whether we should or shouldn't adopt socialism, but to what extent we should adopt it.

It is no coincidence that these admirers of Soviet economic planning were all Keynesians. Had not the master himself proclaimed in 1936 that his economic policy recommendations were easier to implement in a totalitarian state? He had indeed – verbatim, in the foreword to the German edition of the 'General Theory'.  The two decisive sentences were the following:

"The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire. This is one of the reasons that justifies the fact that I call my theory a general theory."

It was a hint to the Nazis that they would find it easy to adopt Keynesian methods. They didn't disappoint – their economy was a 'Zwangswirtschaft' (a 'coerced economy'). Nominally there was still private ownership in the means of production, but this ownership only existed on paper. In reality it was the government bureaus that decided what was going to be produced. The strong similarity between fascism and communism is no coincidence: they are really the two faces of the same authoritarian creed, no matter how vehemently each of them insists that the other is its mortal enemy.

The most famous and arguably most influential economics commentator of the New York Times is of course the 'New Keynesian' Paul Krugman – the man whose winning of the Nobel Prize for Economics was probably the signal event identifying the prize as a contrary indicator. He uses his perch at the NYT both to promote Keynesian fallacies and to advance his political agenda, which consists of shilling for the Democratic party, or rather, its leftmost wing.

It is rare to come across an article on economics in the NYT that is not informed by the most vicious statism. Its Washington bureau chief David Leonhardt, a trained mathematician, is a strong supporter of Keynesian interventionism as well.

Needless to say, not one of the economics writers at the NYT has even a nano-second of business experience. This is not to say that one can not comment on  economics if one has no business background – but one of the hallmarks of today's ivory tower would-be economic planners is that most of them are as far removed from the realities of the marketplace as one can possibly be. Most  owe their income and status to the State in one form or another, so they are unlikely to bite the hand that feeds them – on the contrary, they are the professional apologists for the State, its intellectual vanguard, whose main job it is to keep the hoi-polloi ideologically in line. This is a habit that clings to them even when they leave their tenured positions in academe to venture into journalism or some other private sector employment (see e.g. the recent example of Citi's chief economist and his monetary policy recommendations; if he ever loses his current job, he can probably rest assured that some business will come his way courtesy of the Fed).

Marxist Zingers

A few days ago we came across an editorial in the New York Times by one William Deresiewicz (occupation: 'author and critic'), entitled 'Capitalists and other Psychopaths'.

So you see, the title of the piece tells you already, if you're a capitalist, you are a 'psychopath'. By implication anyone who speaks out in favor of capitalism is therefore lending support to a group of dangerous and mentally ill scavengers. Subtlety is evidently not Mr. Deresiewicz's strongest suit.

He writes:

"There is an ongoing debate in this country about the rich: who they are, what their social role may be, whether they are good or bad. Well, consider the following. A 2010 study found that 4 percent of a sample of corporate managers met a clinical threshold for being labeled psychopaths, compared with 1 percent for the population at large. (However, the sample was not representative, as the study’s authors have noted.) Another study concluded that the rich are more likely to lie, cheat and break the law.

The only thing that puzzles me about these claims is that anyone would find them surprising. Wall Street is capitalism in its purest form, and capitalism is predicated on bad behavior. This should hardly be news. The English writer Bernard Mandeville asserted as much nearly three centuries ago in a satirical-poem-cum-philosophical-treatise called “The Fable of the Bees.”

This is the logical fallacy known as the 'appeal to authority'. One study (though not even based on 'representative samples' according to its authors) has concluded that an inordinate percentage of corporate managers are 'psychopaths'. Another has found the 'rich are more likely to lie, cheat and break the law'. Ergo, the rich are bad people. And why should you be surprised? Haven't you always known, deep down, that they are?

We would call that the 'appeal to envy' – it is always an easy sell.

(As an aside, as you can see when looking at the bottom of the article, the NYT was forced to excise some of the more extreme claims Deresiewicz made regarding this study – evidently one or more readers decided to do a bit of fact-checking and complained. Oops!).

Next we learn that 'capitalism is predicated on bad behavior'. How does Deresiewicz know? Another authority is invoked: Mandeville and his 'Fable of the Bees'.

However, Mandeville's point was merely this: that humans are acting out of self-interest is not, as many self-appointed moralists claim, a  'bad' thing. On the contrary, by acting out of self-interest, people create orderly social structures. It is an early example of a description of what Adam Smith called the 'invisible hand' and Polanyi and Hayek referred to as the 'spontaneous order' – when people are allowed to pursue their interests, the seeming 'anarchy' of the free market produces the best possible system of economic coordination and social cooperation.

Deresiewicz continues:

“Private Vices, Publick Benefits” read the book’s subtitle. A Machiavelli of the economic realm — a man who showed us as we are, not as we like to think we are — Mandeville argued that commercial society creates prosperity by harnessing our natural impulses: fraud, luxury and pride. By “pride” Mandeville meant vanity; by “luxury” he meant the desire for sensuous indulgence. These create demand, as every ad man knows. On the supply side, as we’d say, was fraud: “All Trades and Places knew some Cheat, / No Calling was without Deceit.”

In other words, Enron, BP, Goldman, Philip Morris, G.E., Merck, etc., etc. Accounting fraud, tax evasion, toxic dumping, product safety violations, bid rigging, overbilling, perjury. The Walmart bribery scandal, the News Corp. hacking scandal — just open up the business section on an average day. Shafting your workers, hurting your customers, destroying the land. Leaving the public to pick up the tab. These aren’t anomalies; this is how the system works: you get away with what you can and try to weasel out when you get caught.”

So in other words, he is standing Mandeville's message on its head: it does not mean that we are actually benefiting from people's pursuit of their self-interest. No, what we get is evil big corporations who are 'shafting their workers, hurting their customers and destroying the land'. Of course you're supposed to know all that already: free commerce can only bring us down.

It remains curiously unmentioned that those 'shafted workers' today enjoy amenities and luxuries that were out of the reach even of kings 150 or 200 years ago. The allegedly 'hurt customers' meanwhile are completely free to take their custom elsewhere, a small detail that seems to have eluded Mr. Deresiewicz. It is a feature of the market economy that entrepreneurs must prove their worth every day anew – as their customers vote with their wallets  to demonstrate who they deem to be serving them best. One can not get away with 'hurting one's customers' for very long if one wants to stay in business. The only entity that can in fact get away with this is the government – no-one else can keep his customers in thrall by coercion.

People do not take their custom to Wal-Mart because they expect to be hurt. They do so because of its 'every day low prices'. As to the 'destroyed land', this is a catch-all phrase that is thrown out without any further substantiation, and even if none of us can actually see all that 'destroyed land', even if we look around with a telescope, we're presumably supposed to just take it for granted that it exists. What else could corporate greed possibly produce?

As Ludwig von Mises points out in 'Human Action':

“The outstanding fact about the Industrial Revolution is that it opened an age of mass production for the needs of the masses. The wage earners are no longer people toiling merely for other people's well-being. They themselves are the main consumers of the products the factories turn out.

Big business depends upon mass consumption. There is, in present-day America, not a single branch of big business that would not cater to the needs of the masses. The very principle of capitalist entrepreneurship is to provide for the common man. In his capacity as consumer the common man is the sovereign whose buying or abstention from buying decides the fate of entrepreneurial activities. There is in the market economy no other means of acquiring and preserving wealth than by supplying the masses in the best and cheapest way with all the goods they ask for.”

Mr. Deresiewicz seems to believe that this is somehow 'bad'. Billions of people on the planet are likely to disagree, but what do they know?

His jeremiad continues:

“I always found the notion of a business school amusing. What kinds of courses do they offer? Robbing Widows and Orphans? Grinding the Faces of the Poor? Having It Both Ways? Feeding at the Public Trough? There was a documentary several years ago called “The Corporation” that accepted the premise that corporations are persons and then asked what kind of people they are. The answer was, precisely, psychopaths: indifferent to others, incapable of guilt, exclusively devoted to their own interests.”

Now, we would concede that to become a successful entrepreneur, one does not necessarily need to go to a business school – the talents of the successful businessman can not be taught. This does not mean that business schools offer no benefits. There are a great many useful things that are taught in them, from accounting principles to marketing to the principles of production and logistics to financial mathematics and so on. We actually did go to such a school and no, there were no 'robbing widows and orphans' courses on offer. The polemic about business schools is followed by yet another appeal to authority: a 'documentary' aired 'several years ago'. Unfortunately we don't  learn which documentary precisely and who made it; this is left to the imagination.  The article continues:

“There are ethical corporations, yes, and ethical businesspeople, but ethics in capitalism is purely optional, purely extrinsic. To expect morality in the market is to commit a category error. Capitalist values are antithetical to Christian ones. (How the loudest Christians in our public life can also be the most bellicose proponents of an unbridled free market is a matter for their own consciences.) Capitalist values are also antithetical to democratic ones. Like Christian ethics, the principles of republican government require us to consider the interests of others. Capitalism, which entails the single-minded pursuit of profit, would have us believe that it’s every man for himself.”

Ludwig von Mises has criticized the socialist ideas propagated by some Christian groups on several occasions. As he notes in the passage from 'Socialism' we quote below, there are historical reasons for the affinity the church has shown to socialist ideas. The Church lost much of its earthly power concurrent with the age of enlightenment and the rise of economic liberalism (liberalism in the classical sense). The height of its political power was closely tied to the feudal society and its ruling classes – the very classes that the advent of economic liberalism and capitalism irredeemably undermined.

“Historically it is easy to understand the dislike which the Church has shown for economic liberty and political Liberalism in any form. Liberalism is the flower of that rational enlightenment which dealt a death blow to the regime of the old Church and from which modern historical criticism has sprung. It was Liberalism that undermined the power of the classes that had for centuries been closely bound up with the Church. It transformed the world more than Christianity had ever done. It restored humanity to the world and to life. It awakened forces which shook the foundations of the inert traditionalism on which Church and creed rested. The new outlook caused the Church great uneasiness, and it has not yet adjusted itself to even the externals of the modern epoch. True, the priests in Catholic countries sprinkle holy water on newly laid railways and dynamos of new power stations, but the professed Christian still shudders inwardly at the workings of a civilization which his faith cannot grasp. The Church strongly resented modernity and the modern spirit. What wonder, then, that it allied itself with those whom resentment had driven to wish for the break-up of this wonderful new world, and feverishly explored its well-stocked arsenal for the means to denounce the earthly struggle for work and wealth.”

As to the  idea that “Capitalist values are also antithetical to democratic ones” because capitalism and its pursuit of self-interest is allegedly tantamount to “every man for himself”, this is simply demagogic nonsense. No capitalist venture can survive unless it satisfies the wishes of consumers. The democracy of the marketplace is in fact far more democratic than its political counterpart. Deresiewicz himself is guilty of a 'category error' when he talks about the market's alleged 'lack of morality'. The free market is not about 'morals' which are in any case  a highly subjective matter, but it is a grave error to therefore conclude that it is intrinsically unethical. The market's function is to efficiently allocate scarce economic resources and serve consumers. No other system but the free market system is capable of fulfilling this role. It is not the job of the market to be a teacher of morals, but people who cooperate voluntarily in the market are not devoid of moral principles. This is not least because hewing to certain principles like honesty in their dealings is to everyone's advantage. That there also exist 'bad apples' is not relevant to the discussion.

Deresiewicz continues:

“There’s been a lot of talk lately about “job creators,” a phrase begotten by Frank Luntz, the right-wing propaganda guru, on the ghost of Ayn Rand. The rich deserve our gratitude as well as everything they have, in other words, and all the rest is envy.

First of all, if entrepreneurs are job creators, workers are wealth creators. Entrepreneurs use wealth to create jobs for workers. Workers use labor to create wealth for entrepreneurs — the excess productivity, over and above wages and other compensation, that goes to corporate profits. It’s neither party’s goal to benefit the other, but that’s what happens nonetheless.”

This is an argument that follows the Marxist labor theory of value. It assumes that entrepreneurs and workers are antagonists – the former are 'exploiting' the latter. This misconceives the sources of economic profit. Profit has several components. What we might term the 'entrepreneurial profit' is the extent to which an entrepreneur has correctly appraised the future demand for the goods the production of which he has initiated.  In short, this is the speculative element: the extent to which the prices he receives for the goods produced exceed his input costs over and above the interest rate spread given by societal time preference. It is his reward for taking risk: if the enterprise produces a loss, his workers will still have been paid, but if its profits exceed the interest rate spread, he reaps an extra reward for taking risk and having been correct in his appraisal of future conditions. Whether an entrepreneurial profit accrues is ultimately a matter decided by consumers. As Ludwig von Mises expresses it in 'Human Action' when discussing the nature of monetary profit:

“It is a statement about a social phenomenon, about the individual's contribution to the societal effort as it is appraised by the other members of society. It does not tell us anything about the individual's increase or decrease in satisfaction or happiness. It merely reflects his fellow men's evaluation of his contribution to social cooperation.” […]

“The only source from which an entrepreneur's profits stem is his ability to anticipate better than other people the future demand of the consumers”

The so-called 'excess value' workers produce is otherwise a function of the fact that they get paid wages before the product they help to produce has ripened and can be sold. Imagine a group of workers getting together to build a car. Let us say it takes them a year to build it. If they do it on their own, they will have no income until the car is ready to be sold. If a capitalist advances present goods to them to sustain them during the production process, they do not have to endure this waiting time. The waiting time implies that there must be a time discount, as future goods are always worth less than present goods. It is this time discount that is actually the source of what may be termed 'capitalist profit'.

However, why should we accept it as gospel that it is 'neither party's goal to benefit the other'? It is inherent in the contract between workers and entrepreneurs/capitalists that they work together for their mutual benefit. If that were not the case, they would in fact not do it.

No-one forces a worker to work for a specific enterprise. No-one forces him to be a worker at all: he could just as well decide to become an entrepreneur himself. Steve Jobs decided he would not become a software of hardware engineer for IBM or another established firm. It would certainly have been the  'safer' course for him, but he chose instead to cobble together the first Apple computer in his garage. Anyone could have done it, but as with the egg of Columbus, it was he who actually went ahead and did it.

Deresiewicz continues:

“Also, entrepreneurs and the rich are different and only partly overlapping categories. Most of the rich are not entrepreneurs; they are executives of established corporations, institutional managers of other kinds, the wealthiest doctors and lawyers, the most successful entertainers and athletes, people who simply inherited their money or, yes, people who work on Wall Street.”

This is meant to establish that since not all rich people are entrepreneurs, we should feel free to hate the rich on principle, since only a certain percentage of them are actually fulfilling a 'socially useful' function. Especially as quite a few rich people work on Wall Street, and we are all supposed to know that Wall Street is the devil incarnate. So this is an attempt to justify envy by notifying us of the fact that many rich people are, in Deresewizc's opinion, basically parasites that are not doing anything that makes them deserving of their income. How dare entertainers, athletes and certain doctors and lawyers make more money than others?

Well, the answer is very simple: they all produce something their customers want. No-one is forced to pay them outsized compensation.  They are paid that much because consumers believe they are worth it. We will concede that the managerial class seems 'overpaid' in a historical context as well as relative to the services it renders, but it is up to shareholders to alter this condition. Since there is undeniably great competition in the marketplace for capable managerial talent, the labor costs of this class have increased quite a bit. Many shareholders probably feel that it is better to pay the chief executives of the companies they own generous salaries rather than risk losing them to other companies. Regardless of whether we find their pay 'excessive', it is still something to be decided by the owners of the businesses concerned. There is no reason to belly-ache over it.

Deresiewicz continues with his attempt to  justify envy as follows:

“Most important, neither entrepreneurs nor the rich have a monopoly on brains, sweat or risk. There are scientists — and artists and scholars — who are just as smart as any entrepreneur, only they are interested in different rewards. A single mother holding down a job and putting herself through community college works just as hard as any hedge fund manager. A person who takes out a mortgage — or a student loan , or who conceives a child — on the strength of a job she knows she could lose at any moment (thanks, perhaps, to one of those job creators) assumes as much risk as someone who starts a business.”

This is a big 'so what'? The fact that “artists and scholars are interested in different rewards” in spite of being '”just as smart as entrepreneurs” is their business. Why should anyone worry about it? It's their choice to be so interested. What compensation people get for their efforts is decided in the marketplace, and if certain endeavors require just as much effort as others that garner better pay, it is up to those engaging in them to alter their careers if they want their pay to improve. Deresiewicz himself notes however that many are “interested in different rewards”. This is true, but it does not follow that there is therefore an injustice in others garnering a higher monetary income. That is a non sequitur.

Finally, the fact that life is full of risky decisions, such as whether or not to take out a mortgage or to conceive a child is not an argument for begrudging anyone his income. Deresiewicz seems to be effectively saying: we should reward child bearing as we reward services rendered to consumers, because in both cases someone takes a risk. How is that supposed to happen? There is only one way: coercion.

“Enormous matters of policy depend on these perceptions: what we’re going to tax, and how much; what we’re going to spend, and on whom. But while “job creators” may be a new term, the adulation it expresses — and the contempt that it so clearly signals — are not. “Poor Americans are urged to hate themselves,” Kurt Vonnegut wrote in “Slaughterhouse-Five.” And so, “they mock themselves and glorify their betters.” Our most destructive lie, he added, “is that it is very easy for any American to make money.” The lie goes on. The poor are lazy, stupid and evil. The rich are brilliant, courageous and good. They shower their beneficence upon the rest of us.”

The “enormous matters of policy” are of course where we get to the heart of the matter: since the rich have been identified as undeserving, their wealth  must be taxed away and their income redistributed to the 'child bearers, artists and scientists' and presumably also to the 'authors and critics', the group Deresiewicz is identified with.

As George Reismann notes in his defense of the '1%' (even though this was written as a rejoinder to the 'Occupy' movement, it is just as useful to refute Deresiewicz's rant):

“[...] The protesters have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.

In such a world, if one sees a farmer’s field, or his barn, or plow, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people’s means of production except by inheriting them or by seizing them.

In the world of the protesters, means of production have the same essential status as consumers’ goods, which as a rule are of benefit only to their owners. It is because of this that those who share the mentality of the protesters typically depict capitalists as fat men, whose plates are heaped high with food, while the masses of wage earners must live near starvation. According to this mentality, the redistribution of wealth is a matter merely of taking from the overflowing plates of the capitalists and giving to the starving workers.

Contrary to such beliefs, in the modern world in which we actually live, the wealth of the capitalists is simply not in the form of consumers’ goods to any great extent. Not only is it overwhelmingly in the form of means of production but those means of production are employed in the production of goods and services that are sold in the market. Totally unlike the conditions of self-sufficient farm families, the physical beneficiaries of the capitalists’ means of production are all the members of the general consuming public who buy the capitalists’ products.

For example, without owning so much as a single share of stock in General Motors or Exxon Mobil, everyone in a capitalist economy who buys the products of these firms benefits from their means of production: the buyer of a GM automobile benefits from the GM factory that produced that automobile; the buyer of Exxon’s gasoline benefits from its oil wells, pipelines, and tanker trucks. Furthermore, everyone benefits from their means of production who buys the products of the customers of GM or Exxon, insofar as their means of production indirectly contribute to the products of their customers. For example, the patrons of grocery stores whose goods are delivered in trucks made by GM or fueled by diesel oil produced in Exxon’s refineries are beneficiaries of the existence of GM’s truck factories and Exxon’s refineries. Even everyone who buys the products of the competitors of GM and Exxon, or of the customers of those competitors, benefits from the existence of GM’s and Exxon’s means of production. This is because GM’s and Exxon’s means of production result in a more abundant and thus lower-priced supply of the kind of goods the competitors sell.

In other words, all of us, one hundred percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent. The protesters are literally kept alive on the foundation of the wealth of the capitalists they hate. As just indicated, the oil fields and pipelines of the hated Exxon corporation provide the fuel that powers the tractors and trucks that are essential to the production and delivery of the food the protesters eat. The protesters and all other haters of capitalists hate the foundations of their own existence.”

This is the essential point preachers of class war and envy like Deresiewicz are missing: we all benefit from the accumulated wealth of the capitalists, as it is their accumulated capital that makes the modern economy possible. The Marxist Utopia people like Deresiewicz are dreaming of would soon reduce us to a brutal hand-to-mouth existence. True, we would no longer have to 'hate the rich', mainly because we'd be too busy trying to survive from day to day in the new post-industrial world of autarky and bucolic bliss. We also would no longer have opportunity to read screeds like Deresiewicz's to egg us on in envy and hatred. One wonders though how 'authors and critics' would do in the wild?

Finally, Mandeville is cited again, allegedly in support of 'legislation, taxation and regulation':

Mandeville believed the individual pursuit of self-interest could redound to public benefit, but unlike Adam Smith, he didn’t think it did so on its own. Smith’s “hand” was “invisible” — the automatic operation of the market. Mandeville’s involved “the dextrous Management of a skilful Politician” — in modern terms, legislation, regulation and taxation. Or as he versified it, “Vice is beneficial found, / When it’s by Justice lopt, and bound.”

Contrary to what Mr. Deresiewicz seems to believe, Mandeville did not talk about 'taxation and regulation'.  This is putting words in the mouth of the man, who can no longer defend himself.  Mandeville  definitely did not breathe one word about taxes and regulations in his poem however – he mentions only justice. Taxation and regulations have nothing to do with justice. One might as well  rename them  'legalized highway robbery' and 'oppression' if one really wanted to properly capture their characteristic traits.

Justice means only one thing: equality before the law.

Conclusion:

If you want to see your work published in the New York Times, your best bet is to voice support for more taxes, more regulations and other forms of government intervention and coercion. Moreover, you should make sure you deride the free market as a harmful aberration that must be replaced by enlightened economic planning before it drags us all to hell.

The New York Times itself is curiously enough quite eager to make profits – it has for instance only recently erected a 'pay wall' for its digital content. So here he we have the strange case of a capitalist big business using its platform to preach class war and spread Marxist ideas. It does so because there is a paying audience for such content: in other words, it serves its consumers, deluded as they are. Many of them can probably be classified as 'Salonbolschewiken' (literally 'Parlor Bolsheviks' -  the US term that comes closest is probably 'limousine liberals', but we think it is just not strong enough) – people who are surrounded by and partaking of the fruits of the free market to the fullest extent, while at the same time preaching that there is nothing better than socialism.

Post Scriptum:

We don't want to create the impression that there is nothing work criticizing about the system as it is today  or that big corporations should be beyond the pale of critique. We do after all not exactly live in an unhampered free market economy, but one in which corporations lobby government to interfere on their behalf to suppress competition, fix prices and so forth – all things that have nothing to do with the free market. We leave you with another quote by Ludwig von Mises on this point in which he notes that it would be a grave mistake to state that this unsatisfactory state of affairs represents a fault of capitalism. We need to keep our definitions straight in other words, lest we play in the hands of the enemy.

“It would be correct to describe this state of affairs in this way: Today many or some groups of business are no longer liberal; they do not advocate a pure market economy and free enterprise, but, on the contrary, are asking for various measures of government interference with business. But it is entirely misleading to say that the meaning of the concept of capitalism has changed and that "mature capitalism” -as the Americans call it–or "late capitalism”-as the Marxians call it-is characterized by restrictive policies to protect the vested interests of wage earners, farmers, shopkeepers, artisans, and sometimes also of capitalists and entrepreneurs.

The concept of capitalism is as an economic concept immutable; if it means anything, it means market economy. One deprives oneself of the semantic tools to deal adequately with the problems of contemporary history and economic policies if one acquiesces in a different terminology. This faulty nomenclature becomes understandable only if we realize that the pseudo-economists and the politicians who apply it want to prevent people from knowing what the market economy really is. They want to make people believe that all the repulsive manifestations of restrictive government policies are produced by "capitalism."