QUORA *: 'How is capitalism good despite the fact that it creates higher and lower classes?'

QUORA *: 'How is capitalism good despite the fact that it creates higher and lower classes?'

I posted this answer:

Capitalism doesn’t create classes. It eliminates them, by establishing a government that equally protects every individual’s freedom based on individual rights.

Only statism/collectivism creates classes, or castes: e.g., legally enforced group status like aristocrats and peasants, masters and slaves, etc., from which no one can escape. Under capitalism, no one can stop any individual from rising or falling based on his own efforts, so long as his efforts involve only voluntary, non-rights violating agreement, association, and trade with others. (Economic inequality is not classism under capitalism. It is merely a reflection of the individuality and diversity of human nature.)

Today, capitalism doesn’t exist in unadulterated form. Only mixed economies exist--mixtures of statism and free enterprise. Observe that the modern regulatory welfare state increasingly locks people into stagnation—the poor through welfare dependency and reliance on government schools, big business into entrenched dominance over smaller upstarts via cronyism and regulation. Trade groups into quasi-monopoly status via occupational licensure laws and the like.

People can always be divided into statistical groups based on whatever criteria one chooses, and be labeled “classes”—even in a laissez-faire capitalist society. But only capitalism establishes a truly classless society, on principle: that is, a society that banishes rigid social stratification based on wealth, heredity, custom, religion, or other criteria sanctioned and enforced by law and regulation.

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Related Reading:

What is Capitalism—Ayn Rand

The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire—Andrew Bernstein