QUORA: ‘Would people's basic needs eventually be fully met by the free market?'

QUORA *: ‘If we cut out welfare and allowed capitalism to take its course, would people's basic needs eventually be fully met by the free market?’

I posted this answer:

First, let’s clarify. I assume that by “welfare” the question refers to government force-imposed redistribution of wealth. A private social safety net made up of voluntary charity, welfare, mutual aid societies, and the like, which existed before the modern welfare state, would continue to exist and grow under fully free market capitalism. Nobody proposes to “cut out welfare.” We who advocate capitalism are against government-run welfare, not welfare as such; in effect, we support a separation of charity and state.    

That said, the question misrepresents the nature of the economy and of free market capitalism. This is of crucial importance, because underlying all political debate is the conflict between two diametrically opposed social principles—collectivism vs. individualism—a conflict dating back at least 2500 years. Historically, political theory assumed top-down control of the people by a ruling elite (statism). The only debate was primarily over who would rule, and how. Statism is fundamentally collectivist, with rulers acting (allegedly) on behalf of the group good, however the rulers define it. But there is an opposing theory—that theory holds that the individual has the inalienable right to govern his own life and pursue his own happiness, with the state as the agent to protect the individual’s sovereignty and freedom. Capitalism arose on that opposite basis.

So, it’s critical to frame the issue correctly. 

First, I reject the collectivist premise of the question outright. Capitalism can only be evaluated on the basis of its fundamental nature, individualism. The question implies the mystical, collectivist premise that “the economy” exists to take care of people because the average person is not capable of taking care of himself and/or is not responsible for his own life, and must depend on some authority to provide for his basic needs. That collectivist premise is the rationalization for capitalism’s antipode, socialism. But it is not the basis of capitalism. Capitalism holds that every individual is equipped with the capacity to provide for his own needs, morally must do so, and politically should be free to do so. 

Second, what we call “the economy” is not an entity above and apart from people: It is the sum of the efforts of productive individuals. Capitalism establishes the proper social conditions to allow productive individuals to work and trade. Capitalism, through unhampered markets (the freedom to work and trade), leaves people free to provide for their own individual economic welfare, by their own self-interested individual efforts. Unlike under socialism, in which you live and work for the state, a capitalist government does not command and confiscate people’s economic activity and wealth in order to provide benefits. Instead, it secures peoples’ rights to earn their own living through work, cooperation, and voluntary trade with others (a free market). Of course, in a fully free market, some people, through incapacity or misfortune, cannot provide for themselves and would have to depend on others’ charity and support or on some sort of voluntary “social safety net”. And there are those who resent the self-responsibility that human nature and freedom demands, who may be too lazy or irresponsible to provide for themselves. Capitalism doesn’t guarantee that everyone will meet their own needs and flourish. It guarantees that each individual will be free to do so, and to keep whatever she or he earns, in whatever amount, by inalienable right.

What the free market “provides”  in goods is whatever productive individuals are willing to create and offer for trade. As a self-responsible individual, each person must provide for his own needs. As a consumer, each individual must decide his own needs, and choose from offerings in the market to fulfill those needs. History has shown that the natural result of free markets--that is, people sharing, through trade with each other, the fruits of their own work through the division of labor--is an enormously broad array of wealth production to meet every conceivable desire and need, as well as desires and needs we didn’t know we had until some entrepreneur conceived of it, made available for trade by individuals pursuing their own individual happiness. The result is a rising general standard of living, precisely because the vast majority of people are capable and willing to meet their own needs and desires by their own productiveness. 

I would ask the questioner, if you were free to pursue your own values and happiness, would you be willing and capable of supporting yourself? Or do you think the world owes you a living? Government protection of your freedom based on individual rights to life, liberty, earned property, and the pursuit of happiness is what a free market secures. The rest is up to you. 

Related Reading:

On capitalism, What is Capitalism by Ayn Rand, The Capitalist Manifesto: The Historic, Economic and Philosophic Case for Laissez-Faire by Andrew Bernstein, and Capitalism and the Moral High Ground by Craig Biddle.

Individualism vs. Collectivism: Our Future, Our Choice—Craig Biddle

‘We’ Did Not Create the ‘Mighty Middle Class’: ‘I’ Did

QUORA: ‘Do people with disabilities fall behind in capitalistic societies?’

QUORA*: ‘Is it fair to claim that capitalism does not create better lives, but simply shifts the suffering somewhere else?’

QUORA: 'Can certain forms of capitalism be made to work for the people instead of just the elite?'

QUORA *: ‘What makes someone a socialist?'

* [Quora is a social media website founded by two former Facebook employees. According to Wikipedia:

Quora is a question-and-answer website where questions are created, answered, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.[3]Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users' answers.[4]

You can also reply to other users’ answers.]