How Patriotic is Capitalism?

Let us now dispense with the notion that denunciation of capitalism is denunciation of the United States. Let us also dispense with the idea that denunciation of capitalism entails the embracing of socialism. Let us dispense with these ideas because they are false.

John Locke is considered by many to have provided much of the theoretical underpinning of the American Revolution. The Declaration of Independence was noticeably influenced by his writings, and its author, Thomas Jefferson, let it be known that he held John Locke in the highest esteem. Given that Mr. Locke provided so much of the philosophical foundation for the creation of the United States, it is interesting to take a look at his view regarding the origins of property.

His theory has come to be called the Labor Theory of Property, and consists of this: The world and everything in it at first belongs to humanity in general. No one has the right to exclude anyone else from any part of it. But if the resources of the earth are going to be useful to humanity there must be a way of acquiring them for the use of individual people. The way this is done is through labor. Every person owns himself, and so every person owns his own labor. So when he acquires something from nature through his work, the thing he acquires is annexed to his labor and so becomes his own property. This clearly applies to movable things, such as fruits, cut timber, or minerals, but also applies to what we call real property. When a person cultivates an area of land, that parcel becomes his work and, thus, his property in the same way as movable goods.

There is more to Mr. Locke's theory of property, but I want to focus on his point that the origin of property lies in the expending of labor. This wasn't Karl Marx, mind you, this was John Locke. And even if it was Karl Marx, how can it be denied that in a more primitive state, before land was enclosed, a man acquired property in an apple when he picked it, or in a deer when he killed it? Clearly the origin of property lies in work.

But if this is so, then in capitalism we have completely removed the means of acquiring property from its origins. With capitalism, we have developed a situation where someone can apply work to something without acquiring any property in the thing worked on whatsoever. The thing begins as the property of the capitalist, and remains the capitalist's until he sells it. The worker acquires no property interest in it. This need not be considered a theft if the worker is adequately compensated. This eminent domain of the capitalist can be considered just provided that just compensation is given. But to begin with the premise that a worker has no property interest in the products of his labor because he works in the capitalist's shop, on the capitalist's machine, on material purchased by the capitalist, on land owned by the capitalist, is clearly contrary to the foundation of property itself.

Adequate compensation for the taking of this property from the worker requires a certain amount of social conflict. The capitalist has an interest in keeping the worker's compensation as low as possible. Thus conflict is engendered at the very location of production. This can only be overcome by legislation, unionization and collective bargaining, or both. These things bring forth social conflict as the interests involved thrust and parry to obtain the best situation for themselves. It thus appears that capitalism of its own nature is a divisive force in society. When capitalists are completely successful in all of their endeavors, capitalism also engenders poverty. The only way to overcome these problems is to establish a means by which both capitalists and workers share ownership of productive enterprises. This would not entail socialism, since no state ownership would be involved. It would entail balancing our institutions with natural right and law.