Top 10 Capitalist Myths that You Should Know About

Capitalism makes everything possible.

Capitalism leads to wealth, wealth leads to investment, investment spawns innovation, and through glorious creative destruction, today’s innovations surpass and replace yesterday’s, creating more wealth. Through capitalist initiative, civilization has advanced beyond the wildest imaginings of our forbears. Today we cure diseases that were incurable. We cultivate miracle crops to feed the world. There is no problem in that cannot eventually be solved if we just give capitalist entrepreneurs free rein.

Yet in spite of compelling evidence, the capitalist system remains challenged. Globalization, privatization, the growth of intellectual property law, industrialization, mechanization, and free trade have all spawned resistance. Voices raised include socialists, environmentalists, indigenous peoples, humanitarians and even other capitalists.


The following Capitalist Myths, each embraced by far too many capitalists, dangerous when adopted blindly, can be amended or eliminated through more serious debate. Capitalism is a powerful force for positive change, but cannot realize its full potential unless it acknowledges and confronts its myths, and assimilates positive ideas from belief systems besides its own.

Myth #1
Global Free Trade is Always Best

El Salvador Countryside
What is Fair and Free Trade?
Read “Global Exchange”

Not always. While a world of unfettered free trade can create faster overall economic growth, that same growth can cause some societies and countries to become worse off. Suddenly introduced global free trade can turn an entire country’s economy and fledgling local industries upside-down. Foreign investment often focuses on over-development of single commodities that can go bust. Increased foreign investment and global trade usually ride into a country alongside debt. Going into countries using international legal weaponry to enforce free flow of capital and foreign ownership of local assets isn’t always best. Alongside free trade there is fair trade, an equally elusive and worthy goal.

Myth #2
Cheaper is Always Better

Price competition is a pillar of capitalism, but many measures of value do not immediately or easily translate into quantities of money. How can the happiness of a people, or the health of an ecosystem appear on the financial statements of a multinational corporation? Hire lower-paid employees and lay them off and move to another country as soon as it’s cheaper there, then move again. Mechanize the workplace and make workers commodities. Log forests on cheap land, pay massive short-term profits into dividends and close the company. Strip-mine oceans with driftnets 50 miles long and kill off the final scattered fish with high-tech sonar detection systems. Capitalist competition means more, cheaper, faster; cheaper goods, cheaper shelter, and cheaper protein, but it’s not always better.

Myth #3
Capitalism has European Roots

Only some capitalists are European. The functions of capitalism; property ownership, monetary exchange, trade, competition, value creation and entrepreneurship, easily predate Europe and exist and originate from most everywhere. Private individual wealth and multinational corporations come from diverse cultures. That the Europeans have been successful capitalists doesn’t mean they invented capitalism, and it doesn’t automatically consign capitalism to European values and prerogatives. Critics of capitalism point their fingers at the west more than the west deserves. Capitalism is part of human nature.

Myth #4
Intellectual Property is Sacred

Sunrise in Rishi Valley
Where does public domain begin?
Read “Monocultures of the Mind”

Absolutely not! Patents for inventions that incorporate life forms, mimic natural processes or copy native remedies and recipes are walking on legal thin ice. “Business method” patents are complete baloney and should be repealed. Maybe copyrights last too long, and royalties cost too much. The public domain is under attack and it’s shrinking. Farmers who save and reuse seed from their own crops, inadvertently or effortlessly cross-pollinated with windblown genetic material that somebody patented should not be prosecuted. Open source legal precedents are already set in the software industry. Stakes are high. Intellectual property law run rampant becomes an expensive and devastating tool for oligarchic and other vested interests to outlaw competition. How capitalist is that? It’s time to reverse this trend. There is an intangible commons, too.

Myth #5
Industrialization is the Only Alternative

From a global perspective industrialization is inevitable, but that doesn’t mean developing countries should develop now or else. Countries that would have enjoyed relative stability if they’d never industrialized can be sorely disrupted by sudden financial flight. Single commodity economies with debt service blow in the wind. When a country commits to industrialize they place high bets in limited areas and they run this risk. Moreover, because global productivity constantly improves, especially in the high-tech era we live in, the longer a country waits to develop, the less they will have to pay for their new industries. Countries should not be rushed into industrialization because it’s supposedly in their interests.

Myth #6
Property is Sacred.

Sea Turtle
Who Owns the Oceans?
Read “David Brower’s Legacy”

Never. Too much of the property we might consider sacred is also shared between us. If the air is unhealthy for people to breath, or the water too poisonous for fishermen to fish, some property owner’s prerogative, and resultant pollution, is definitely not sacred. Productive assets necessary to society, especially when controlled by monopolies, cartels, or foreign financial interests, must be regulated to ensure sustainable practices and a safety net for the poor. Property rights defenders are correct to call regulations “takings,” but that per se is not at issue. Governments must regulate trade to enforce “free trade,” they must regulate commerce to encourage and enable competition, and they should help protect the weak; all of which can translate into “takings” in some form. The only question is when, and how much.

Myth #7
Democracy-Capitalism is the End-Point of Civilization

Really now? Then go explain how corporate welfare fits into this rosy picture, for starters. Democracy-Capitalism has today’s media and mainstream academic endorsements, but utopia nonetheless eludes modern civilization. To strive for democracy-capitalism, ideally, is an ongoing fight against tyranny and oligarchy from any group, creed or political ideology. Capitalists can be tyrants. Democracies can be belligerent. The form of capitalism and the ethics of democratic societies are diverse and subtle and need constant reexamination. Congratulating democracy-capitalism as the end-point of civilization shouldn’t discourage or take the place of relentless investigation and reporting, healthy dissent, and meaningful public debate.

Myth #8
Privatize Public Works

Mountain in Distance
Can Everything be Privatized?
Read “The Giants of Water”

It depends. Many if not all public works provide necessities such as water and energy that cannot be found anywhere else. These necessities should be offered free to those who cannot afford to pay. Privately operated public works, owned by foreign interests, could in unregulated free-trade environments be managed as cash-cows, exporting profits into a multi-national conglomerate instead of back into the local economy. There is no monopoly on corruption, which can affect private corporations inside or outside a country just as severely as it might affect public administrations anywhere. Public works can succeed as mostly public or mostly private operations.

Myth #9
Maximize Quarterly Profits

This is a canard disguised as a rationalization turned into an obligation compelling a property owner to cut down all the trees in their forest, or pump out all the water from their aquifer, selling to the highest bidder as quickly as possible. Every industry has its culprits, compulsive competitors who cut every corner, cook the books, betting the farms, heedless of the ultimate payback. In the name of short-term gain people can become puppets and chattel, worthy enterprises ignored and abandoned, and the earth stripped. In the long run human rights always prevail, ecosystems are stewarded, and business is sustainable. It is much easier for a long-term capitalist to profit without creating victims and collateral damage. If all that really mattered were to maximize quarterly profits the world would already be a wasteland.

Myth #10
Greed is Good

Pure crap. Greed is a sin, not a virtue, but it can be confused and conflated with one of capitalism’s moral appeals; that capitalism offers, hopefully, a competitive and pluralistic game where no one sinful, awful faction can ever dominate. In this pragmatic model greed is not good it is contained. But capitalism, ideally, also depends on a totally voluntary moral framework and consensus in societies that greed is not good. Only then does capitalism better avoid caricature and condemnation. Only then do capitalist visions have more universal appeal and overall joy.

Capitalism at its best is the engine that will bring peace and prosperity to humanity, eliminate poverty and disease, and protect the earth. But building enthusiasm for capitalism throughout the world requires patience and compromise, possibly slower but more sustainable economic and corporate growth, and more diverse patterns of ownership.

To proliferate faster, more capitalists might prefer not myths that only emphasize the economic game, but instead visions of a better world. Visions where most everyone, especially the avid capitalists, believe that humanity and ecology weigh in equally alongside winning.

Ed Ring is Editor and CEO of EcoWorld Inc., publisher of www.EcoWorld.com.

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2 Responses to “Top 10 Capitalist Myths that You Should Know About”
  1. Herman King says:

    iNTERNATIONAL BANKING GOT ITS GRIP ON CAPITALISM AND MAY EVENTUALLY DESTROY IT WITH ITS INHERENT EVILS OF FRACTIONALIZED RESERVES, USURIOUS INTEREST RATES, ETC. WE ARE BEGINNING TO SEE IT COME APART AT THE SEAMS.

  2. Jim Jones says:

    Capitalism profits off of it’s workers, not just there consumers. Workers are paid less than what their labor is worth.
    They are exploited.

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