The “Capitalism Is Superior” argument goes like this:

Capitalism sprang into being out of the mind of Adam Smith in 1787, and coincided with the birth of our Republic.  After that, millions of people in America got rich as all hell.  Then, all of that wealth started to filter out into the world from America as Americans began to make, sell, and buy more and more stuff.  As a result, the standard of living for most of the world’s population went up.  Again, all thanks to Capitalism.

So, it seems to make perfect sense to claim that Capitalism – in contrast with Socialism, Communism, Mercantilism, Anarcho-Syndicalism – is superior to all other economic systems, right?   There had never been that much wealth generated in so short a period of time!


Wrong. That’s a lie.

Why?  Because everyone who says “Capitalism created incredible wealth!” has conveniently forgotten that when the British colonized North America they had literally stumbled upon roughly $1 Quadrillion (in today’s dollars) worth of land, livestock, timber, fuel, crops, metals, and minerals – all of which they got for free.

That’s right: free.  Everyone who landed in early America didn’t have to pay for anything.

Well…not anything.  They had to pay for travel, or to hire a laborer or two (unless they were using human slaves), but aside from that, all they needed to do was build some shelter, till some land, and eat their food.  After that?  They were rich as hell. 

Any livestock they acquired, crops they grew, land they settled on?  Free.  And, aside from the nuisance of work and having to kill a few Native Americans, they really didn’t have to pay too much money.  As I said, they paid maybe a bit for travel, maybe a bit for bullets, but even that paled in comparison to the expense and trouble of trying to gain a financial foothold in Europe – where all of its resources had already been claimed, owned, and marked up to a premium.

That’s where all of Capitalism’s “wealth” came from: Free Stuff. For the first time in the history of Western Civilization, a laborer could earn hundreds of times the amount of wealth for their labor just by getting out of bed and doing the bare minimum.

You don’t believe me?  Well, check this out: literally, in the 1800s, the Federal Government just gave away millions of acres of land, completely free of charge.  These were called “Land Grabs”.  And that’s not some facetious, sarcastic term. They were literally called “Land Grabs”. It can’t be emphasized enough: in Europe and other countries, a laborer would have to buy land, or rent land, just to perform work because someone already owned it.  But not in America! No! In America, hundreds of covered wagons could line up and charge full speed into the open prairies for people to stake their claim and hoard as much acreage as they possibly could!

Again, that’s what literally happened.

And they hoarded that land because every square inch of it equaled an incredible amount of wealth – resources that could be sold to people to reap massive profits.

Imagine that.  Imagine someone handing you a ton of extremely expensive, Free Stuff.  And what do you, as a laborer, have to do to earn it?  Just get up in the morning and get it. That’s right. If you could get up and do the absolute bare minimum required of you, then you could become incredibly wealthy.

That’s how Capitalism got it’s start. That’s how America got its start.   That’s a fact. That’s history.

That’s Capitalism.

So, as you can see, our economic system – while functional and legitimate – was not some dazzling stroke of genius or heroic display of grit and determination. No. Rather, it only seemed to be a stroke of genius, and only seemed vaguely heroic because everyone received trillions of dollars worth of Free Stuff as soon as they showed up.

You can hear this reality echoed in some of the “Old Money” families whose wealth was passed down over several generations.  They’ll say things like “My Daddy tilled this land, my Granddaddy tilled this land, and my Great Granddaddy tilled this land.  We’ve been on this land for over a hundred years.”   Well, guess what?   His Great Granddaddy didn’t spend a dime to get that land.  He showed up, sat down, and suddenly had millions of dollars of wealth right there under his ass.

And if he stuck a shovel in the ground and gallons of Free Oil gushed out? Well, then guess what? He’d be even richer!

Was his Great Granddaddy some kind of genius for doing that?  No.  He could’ve been naked and lobotomized.  Like I said, all he had to do was show up, sit down, and enjoy being rich.

The “Old Money” people, by the way, also tend to refer to their incredible wealth and good fortune as being the product of hard work – which it technically is.  After all, they did have to work. The problem is, they also tend to chase that observation with the statement “Capitalism is superior because it incentivizes people to work hard” – which it technically does.  

But that analysis has one fatal flaw: the “Capital” in Capitalism was not created by the work The Capital was free and the work was merely a perfunctory act of holding out one’s hand to get the Free Stuff. Like I said, unlike Europe over the previous thousand years, where everything had already been bought and owned, work in America yielded profits hundreds of times greater than had ever been generated in human history; an influx of wealth that was drastically disproportionate to the actual work performed.

This idea is reflected in modern day criticisms of super-rich people, whenever people ask “Did the CEO of that company really perform several billion dollars worth of work?”. The answer, of course, is “No.” A CEO can work more than 40 hours per week, but they can’t work a million times more than 40 hours per week. So how did they get so wealthy? Again, because that wealth had already been flooded into the market at the beginning of Capitalism for free. Simply put, the amount of wealth existed independent of the labor that generated it.

Once it aggregated into the hands of a few families, that incredibly powerful, disproportionate wealth traded hands, generation after generation, ever since.

That’s the unsettling truth about Capitalism: any economic system would be deemed pure genius if, at the very outset, its workers made a hundred times more money than the labor they put into it; if they started out with a huge profit and then had to work to keep it.

People didn’t make massive profits because of “Capitalism”. People made massive profits because they were handed massive profits for very little work.

Just imagine all of America’s bountiful resources in the 1780s stripped away by actual costs, just like they were in the other developed countries at the time. Once someone incurs a cost other than their own basic labor then the mundane reality of Capitalism becomes apparent.  With the day-to-day costs of a more developed economy factored in (loans, fees, purchase cost, rent, depreciation from prior ownership), laborers would have been left in the same position they were in in Europe: surviving on a bare subsistence level.

Incidentally, this “bare subsistence level” is precisely the condition that is starting to kick-in today. People are working harder but earning less. Why? All the Free Stuff is gone. Other people own it all now.

You still don’t believe me? Then look at it this way: with Capitalism, you have to keep in mind that no one ever claimed “ownership” of the entire North American continent before the British. Unlike Europe, claiming “ownership” of something as free and available as land had never happened in America. The Native Americans lived there but they never claimed to own it. So, when the settlers arrived, no one charged them money for the land, livestock, crops, gold, minerals, etc.. Instead? People just showed up and took it.

Think about that. Think about what an absolutely extraordinary condition that was. It had never happened before. Never, in the history of Western Civilization, had an economic system been created in an environment where almost no real costs were incurred. And that condition lasted for nearly two centuries.

The British Monarchy, of course, tried to collect on all of that Free Stuff, and we all know how that turned out. We kept all of our Free Stuff.

It can’t be said often enough: Capitalism, from the very beginning, relied on Free Stuff to exist. Instead of calling it “Capitalism” we should be calling it “Free Stuffism”.

The situation becomes much clearer when you start calling it “Free Stuffism”. Contentious political conversations suddenly become much more relaxed:

“Look…all other economic systems are inferior when you compare them to getting Free Stuff. It’s pure genius. I call it ‘Free Stuffism’.”

“Do you know what system lifted the most people out of poverty around the world? Getting Free Stuff. It’s pure genius. I call it ‘Free Stuffism’.”

“Let me tell you something: the best way to remain free to do whatever you want, live freely, and to be your own boss? Is if you support Free Stuff. Isn’t that pure genius? I call it ‘Free Stuffism’.”

And so on.

And if that still isn’t clear, then imagine the events of early America in today’s terms:

You wake up one morning, someone knocks on your door, and they say “Listen…I don’t mean to be a bother, but I’m going to give you five hundred Ferraris FOR FREE.  They’re yours.  Each one of them costs around $300,000.  All you have to do is travel a few states over, or make a few phone calls over the next several months, and sell them. Then you’ll be rich.”   Your response at this point should be sheer joy.  But then you stop and think for a second and ask “Well, will I have to pay for storage or insurance?”  and the person answers “Oh, no.  Just for your own travel.  Storage is completely free.  Your Ferrari storage has been paid for, as well the car insurance.  There are no expenses.  The only expense associated with your new Ferraris is that you might have to travel, call people, and sell the Ferraris.  Other than that, everything is free.

That’s what it was like for the early American settlers.  That’s why people began calling The United States “The Land of Opportunity”. That’s why people began showing up to the United States in droves from around the world. Because there was just so, so much Free Stuff to choose from.

So, as you can see, it wasn’t Capitalism that created all of the world’s wealth.  Rather, it was all of the world’s wealth that created Capitalism.

Likewise, it wasn’t Capitalism that raised the world’s standard of living. Again, it was the Trillions of Dollars of Free Stuff that raised the world’s standard of living. Once the Free Stuff was sold by Americans to make money, all of the Free Stuff started circulating around the world.

Only for the rest of the world, of course, it wasn’t “Free”. Unlike the early settlers, the rest of the world had to pay for what all of the early American settlers found, claimed ownership of, and then possessed for free. Then all of the Americans got really, really, really rich.

Start-up costs? Negligible. No loans or rent like in Europe.

It can’t be emphasized enough: any economic system would have generated staggering amounts of wealth if it started with Free Stuff. And – once that system started charging money for its Free Stuff – incredible wealth would have spilled out around the world, not matter what. It would’ve raised people’s standard of living regardless of the system.

“But wait!” you might say. “Don’t you find it impressive that America invented steam engines, cars, airplanes, spaceships, and iphones in the 19th and 20th centuries? Doesn’t that prove how incredible Capitalism is?” Again, any economic system, for any country that stumbled onto the American continent would have thrived and done incredible things under those circumstances.

In fact, that hypothetical country would have had to not succeed on purpose under those circumstances. They would have had to deliberately fuck up to avoid comfortable living, leisure time, and the creation of amazing inventions. They would’ve had to want to fail.

The fact that some kid in a poor country today gets their hands on a DVD player?  That’s the direct result of the previous generation handing down their Free Stuff to the next generation, then to the next generation; then that generation enjoying “leisure” time in which to imagine, invent, and build a DVD player. Then they could sell it to another American, that person could use it for a while, and then they’d sell it to the poor kid overseas at a discount.

Did his standard of living go up? Sure. Because the first generation had all the Free Stuff in the world to get the ball rolling and eventually get that kid a DVD player.

So, when people talk about Capitalism, just know that what they’re really describing isn’t something “Superior,” or “Brilliant,” or “Moral”. It’s just another economic system among many, with pros and cons, pluses and minuses.

But, unlike those other systems, Free Stuffism had one key advantage: it started out with Free Stuff. It started out with tons and tons of surplus Capital.

So, from now on, whenever someone mentions Capitalism, just know that what they’re really describing is not some stroke of genius, but rather the single biggest “Free Handout” in the history of the world.

You, too, would’ve climbed inside of a covered wagon and ridden a couple hundred miles if there was a billion dollars waiting for you at the end.

Published by Thomas Paine

I'm the Father of the American Revolution and I can't stand "revealed religion".

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