Capitalism Vs. Imperialism

Someone asked me this question: “do you consider yourself a capitalist as well? If so, what is your reaction to the imperialist use (or misuse) of capitalism?”


My response is as follows:

I believe in the ideals of Ayn Rand because they correspond with reality. Objectivism, to me, is the only philosophy consistent with man’s nature, rights, and purpose. If man is to live on earth, he has to define his own philosophy.

Do I consider myself a capitalist? Yes, because I am an advocate for capitalism. I advocate capitalism because it is the only economic system that is consistent with man’s rights– his right to life liberty, property and the pursuit of happiness, and because I want to live in a capitalist society wherein my rights and existence are respected. I cannot cover this particular argument here; it takes a full-blown article to explain why capitalism is consistent with man’s right. But I think this is self-explanatory. Only in a capitalist society can man own a private property, as well as the products of his own mind. Under a socialist or communist system, all properties are owned by the state. Can you imagine if you discovered a great invention and it would be owned by everybody or seized by the state in the name of common good? You will not profit from it, you will only reap a trophy, a token or just a cash reward or certificate from the presidium for your efforts.

Supporting or defending capitalism does not mean you must own a big business or run a corporate entity. Capitalism encourages a person to develop his own potentials and improve his/her skills. This means that every vocation has the opportunity to flourish in a capitalist society. For instance, a writer can sell his/her novels and make his/her ideas known to readers without government help and without fear for government retaliation for negative commentaries and criticisms. An artist is permitted under a capitalist system to sell the product of his mind. Capitalism does not focus on big businessmen alone. In a capitalist society, people transact and deal with each other as traders with mutual consent and free from compulsion.

Now, going to your main question- what is my reaction to the imperialist use or misuse of capitalism. My answer is capitalism and imperialism are contradiction in terms. Imperialism is not synonymous to, and does not embody the ideals of, capitalism. That is the usual propaganda of the left or the socialists and communists whenever they attempt to discredit or distort capitalism. They try their best to associate CAPITALISM with the United States. This fallacious association is rubbish and malicious at best. Those who attempt to destroy capitalism through malicious propaganda best embody this principle popularized by Lenin: “Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capitalism is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.” But if you try to look at the product of his ideas, Soviet Socialist Russia, you will find out that he was a man of contradiction.  The defunct USSR did not only conquer foreign lands, millions and millions of Russians were also murdered by its evil leader Stalin. In a collectivist state, there are no such things or principles as individual rights. Anybody can be killed or executed without due process or the benefit of an open and impartial trial.

Therefore, there’s a need to define terms here.

What is capitalism? Ayn Rand gave the most accurate and consistent definition of capitalism. Based on Ayn Rand’s concept of capitalism, this economic system has the following attributes:

1) it is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.

2) it means a full, pure, uncontrolled, unregulated laissez-faire capitalism—with a separation of state and economics, in the same way and for the same reasons as the separation of state and church.

3) its moral justification does not lie in the altruist claim that it represents the best way to achieve “the common good.”

4) it is a system wherein all human relationships are voluntary, and that men are free to cooperate or not, to deal with one another or not, as their own individual judgments, convictions, and interests dictate.

Genuine defenders of capitalism like Ludwig von Mises also endorsed these attributes of capitalism. To quote, Mises states: “under capitalism, material success depends on the appreciation of a man’s achievements on the part of the sovereign consumers. In this regard there is no difference between the services rendered by a manufacturer and those rendered by a producer, an actor or a playwright.” I would like to warn you that there are those who wrote their own treatises on capitalism but failed miserably in trying to defend capitalism. These alleged thinkers include the like of Adam Smith, John Maynard Keynes, Murray Rothbard and Milton Friedman. This is to say that Ayn Rand and Mises offer the best defense of capitalism.

Now based on these attributes of capitalism, can we conclude that the United States is a capitalist country? The answer is NO. While the United States  introduced capitalism to the world, it never wholly practiced this economic system. A study of American history will tell you America is not a pure capitalist country and never practiced capitalism. So what then is the economic system of America? It is mixed economy.

I must say that there is one effective test to determine whether a country is a capitalist economy. The test of regulation, or whether a country imposes extensive regulatory policies on the economy. Is too much regulation choking business? Are some economic policies of a state supporting a group of businesses and killing the other group? Do we see the rise of “robber barons” who benefit from government subsidies, political connections and award of contracts? Are these scenarios part and parcel of capitalism? The answer is No.

A mixed economy, meaning a mixture of some attributes of capitalism and socialism, only leads to the rise of robber barons or cronyism and what you call “imperialism.” In a mixed economy, what is being surrendered are some of the attributes of capitalism, thus it is not a mixture of capitalism and socialism per se. Capitalism does not seek the plunder of the wealth of other nations. You must remember that imperialism was practiced by the royal families in Europe even before the birth of the United States.

Now, what is the main difference between capitalism and imperialism? What does capitalism and imperialism seek to achieve? Capitalism  demands the best in every man. That is why the world achieved unparalleled economic success in human history only after the Industrial Revolution. Much of technological inventions and discoveries occurred in the past 100 years because of capitalism. The recognition of man’s right to property led to the promulgation of laws on intellectual property and property rights law. The standard of living improved after the Industrial Revolution because there were men who were willing to produce and discover new ideas. Imperialism is governed by politicians and bureaucrats, while capitalism is about the free market with capitalists as its main actors. It is the politicians or dictators who decide whether a country should engage in a war or invasion, while it is the capitalists who act as major players in a free market economy wherein the role of a government is purely limited by law.

Ever wonder why most great men and thinkers in the past 100 years migrated to the United States?  Did this particular question not occur to you? It is because the United States is the first nation in the history of mankind that respects individual rights, where man is allowed to own property and to discover and dispose of the products of his mind. Perhaps you must have heard that America was built by immigrants. But the question is, what kind of immigrants? A few them include Ayn Rand, Mises, Albert Einstein, Nikola Tesla, Jan Ernst Matzeliger, among others. (I’d like you to read my blog entitled America: An Obituary). The best legacy of America is the ideal of capitalism. Now most countries have opened their borders to the principles of capitalism. For instance, China, through its open-minded socialism, welcomed foreign investors but without surrendering its socialist principles. This means that China only accepted a few attributes of capitalism, as it still exercises the power of state intervention. (Try to read another blog of mine entitled “Lessons of Tiananmen Square: We must secure our freedom and rights.” In this article, I discussed that China’s former premier Zhao Ziyang recognized capitalism as an effective economic system to solve poverty and unemployment.)

On the other hand, the object of capitalism is the conquest of nature. What do I mean by this? Man discovered new machines and ideas through his own mind alone; it was  done not by means of force and compulsion. Man is only permitted to think, discover new things and ideas and profit therefrom under a capitalist system. Look at the best epitome of collectivism in the world—North Korea. People in North Korea experience poverty because of the acts of their government. Kim Jong Il had to kidnap a renowned South Korean filmmaker just to complete his own propaganda films. Why? Because no one in North Korea could ever accomplish such kind of complicated work for him. He had to bribe or kidnap scientists to work on his nuclear program. A dictator cannot force man to think.

Going to imperialism. The object of imperialism is the conquest of man and physical land. That is why when a nation or territory is conquered its inhabitants are reduced to mere slaves. Most great nations today,which of course include America, are guilty of war crimes and imperialism. It is maliciously wrong to attribute this crime to capitalism. Capitalism has been attacked, distorted and vilified for decades as the necessary evil. Today, capitalism is again under fire as the Obama regime, as well as  intellectuals and academics, blame capitalism for the economic crisis. The worst enemy of capitalism today are not the communists; it is the universities and colleges. The economy failed because of too much government intervention. If you try to study the laws passed in the United States, particularly the Community Reinvestment Act, you will find out why financial crisis occurred. Health care problems also occurred because of government policies that forced health insurance companies to admit applicants regardless of their age and preexisting health conditions.

The economic crisis is a very complicated and mind-boggling jigsaw puzzle that can hardly be understood by ordinary individuals, and this is the reason why they just have to nod when somebody tells them the economic crash was caused by capitalism. They simply take things on faith. One of the main attributes of man is his mind. To understand things, you must use it.

Ayn Rand once wrote:

Laissez-faire capitalism is the only social system based on the recognition of individual rights and, therefore, the only system that bans force from social relationships. By the nature of its basic principles and interests, it is the only system fundamentally opposed to war.

Men who are free to produce, have no incentive to loot; they have nothing to gain from war and a great deal to lose. Ideologically, the principle of individual rights does not permit a man to seek his own livelihood at the point of a gun, inside or outside his country. Economically, wars cost money; in a free economy, where wealth is privately owned, the costs of war come out of the income of private citizens—there is no overblown public treasury to hide that fact—and a citizen cannot hope to recoup his own financial losses (such as taxes or business dislocations or property destruction) by winning the war. Thus his own economic interests are on the side of peace.

In a statist economy, where wealth is “publicly owned,” a citizen has no economic interests to protect by preserving peace—he is only a drop in the common bucket—while war gives him the (fallacious) hope of larger handouts from his master. Ideologically, he is trained to regard men as sacrificial animals; he is one himself; he can have no concept of why foreigners should not be sacrificed on the same public altar for the benefit of the same state.


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