As President Obama and Pope Francis remind us, so-called income “inequality” remains an obsession for leftists the world over. When discussing this topic, those who value liberty — and sense — would be well-served to bear in mind Confucius’ admonition: “When words lose their meaning, people will lose their liberty.”
“Capitalism,” for example, as F.A. Hayek notes, was invented by German academic and self-described “convinced Marxist” Werner Sombart. Friedrich Engels commended Sombart on being the only German professor to have achieved a genuine understanding of Karl Marx’s Das Kapital.
“Capitalism” conjures, and is meant to conjure, an image of a consciously designed system intended to serve the interests of a minority — the owners of capital — at the expense of the overwhelming majority of us — the laborers. Clearly, the word itself cooks the case against such a system.
“Free market economy” is also problematic in that it implies the existence of something that exists over and above the sum total of the countless transactions of the billions of individual human beings that comprise it. It is not “the market” that determines the price of a product. Rather, product prices are the function of patterns formed by untold numbers of people freely seeking the satisfaction of their needs and wants.
“Free enterprise system” is another common term not without its challenges. It is better than both “capitalism” and “free market economy,” it is true, but it still suggests a premeditated system designed to marshal all agents into the service of one grand enterprise, the realization of a “unitary hierarchy of ends,” as Hayek characterized it. Plus, with the word “enterprise” in its name, such a system sounds as if it is for the benefit of entrepreneurs — and most people don’t see themselves as entrepreneurs.
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