Key Terms

Recently my students debated the merits, and demerits, of credit card companies. I was impressed by their level of argumentation. I was also struck by how the debate revolves around certain key terms.

The first term is the notion of being voluntary. For a trade to count as a trade it must be voluntary. The Radical Capitalists restrict this to the use of force or the threat of force. Anything else goes. There are reasons to draw the line here, but there are also reasons to ask whether jettisoning cargo in rough weather is also "voluntary" in the same way that just throwing cargo overboard for fun would be. There are differences in the criminal law that draw distinctions between various levels of intent and hence voluntariness. Does the level of need affect this?

The second term is information. There is nothing illogical about a system of total caveat emptor. Yet, such a system seems to define the very essence of a black market. Rand points this out when Rearden has to get coal on the black market. Genuine markets have some built in protections concerning the accuracy of information. All the Radical Capitalists believe in prohibiting fraud - but just what is fraud? Is it only telling a lie or can fraud be perpetrated through more subtle means?

Bill

Radical Capitalism

Logan H asks a good question: What is Radical Capitalism?

Most think it is laissez faire capitalism. However, I argue it goes beyond this. All of the authors for this course believe that liberty is a value that cuts across both the economic and political spheres. What makes these authors radicals that they advocate the maximal amount of liberty for individuals and that they see that all of our liberties are connected. This is the major theme of Friedman's Capitalism and Freedom and Rand's Atlas Shrugged.

Robert Nozick makes a very good point in Anarchy, State and Utopia: Liberty upsets patterns. If being conservative is preserving traditional patterns then liberty is quite radical. In this sense Radical Capitalist may be redundant, but it does signify that the most radical ideas are those that consistently promote individual liberty across all spheres of human conduct.

The Ambiguity of Business

In Atlas Shrugged, Rand clearly distinguishes between real business people and those who simply got the title because they are located in a business. What makes this distinction really difficult is that there is not a pithy name for the latter.

Real business people engage in production, trade, and competition. Those riding on the coat tails of business want to avoid competition. They do produce something, but it is clearly not like real business. In Atlas Shrugged Paul Larken and Mr. Mowen produce. The kicker is not that they do it in a mediocre fashion, but in their reasoning about the whole process. Rand is merciless with the Board of Taggart Transcontinental because they spend their efforts on anything but production.

The reason I point this out is many accuse Rand and Radical Capitalism of being pro-business and then cite the worst of the lot as evidence that such a theory is ludicrous. Not everyone who is called a "business" person really is. That's her point. There is a difference between extant businesses and the practice of business. For instance, recently Fed Ex and UPS were engaged in a political battle over the laws of unionization - each trying to get laws passed that hurt the other. They are businesses, they are engaged in business, but this mutual predation through the political process is not business. (Note they are not simply trying to protect their own - they are trying to hurt the other as well)

An equal mistake would be to say that everything a man parent did in the home was fathering. This is palpably false. Yet, people are willing to believe that everything that is done within the firm is business.

To understand Radical Capitalism is, I believe, to understand the difference between real and fake business.