Principles of the New Capitalist System
In the
light of this theory of society, and individuals and their rights, capitalist
economists drew up the new capitalist system which can be summarized under
the following points:
- The individual has the right of private ownership. This right covers
everything _ it treats everything which one utilizes and uses such as clothes;
furniture, ships and cattle. This list also includes the articles and the
services which produce various goods for consumption, such as machines,
instruments, land and raw materials.
- The individual has the right to work. Individuals have the right to
use all the means which they possess in all fields of labor. The output
of such work should be theirs; they should not be deprived of its benefits,
but they should bear the losses also. They have the right to accept or
refuse the conditions and responsibilities which they have to respect in
their trade premises and factories as well as the rules and regulations
imposed on them. They are free to expand their production, to sell at any
price they fix and to employ whatever number of people they require, either
by giving wages or monthly salary. Dealings in the field of trade or industry
between the seller and buyer, employer and employee, servant and master,
should take place in an atmosphere of full liberty. Everyone should fulfill whatever conditions he has agreed to observe.
- Private interest offers incentive for work The capitalist system depends
for the production of consumer services and their development on the individual's
keenness in securing his self interest. This is a natural instinct which
moves man to work and to increase his efforts for more production.
Supporters of the capitalist system claim that in human life there is no
incentive for work stronger than this. They even say that this is the only
incentive_ the smaller the chances of securing self interest the less will
be the use of man's energies, activities and efforts. If opportunity for
securing private interest and personal advancement are provided to each
individual, it will enable him to make gains according to his own efforts.
Individuals make more and more effort to increase production and improve
production standards, and in this way production continues to increase
and more goods are consumed. In addition to this, the spheres of activity
of the productive machinery widens. Incentives to secure personal interest,
in turn, safeguard the interests of the whole community. This service rendered
to the community can not be rendered otherwise.
- Rivalry among individuals. In the opinion of the supporters of the capitalist
system the spirit of rivalry prevents self interest, in a free economy,
from trespassing beyond the limits; it is this spirit which maintains balance
and equilibrium. It is quite normal that in the free market there are a
number of people who produce one single commodity. If there are also numbers
of sellers and buyers. It is inevitable that a reasonable price be fixed,
determined by the dictates of competition. Personal interests should not
go beyond their limits and, similarly, such interests should not lag behind
these limits unless in abnormal and temporary circumstances. By virtue
of competition, employers and employees fix for themselves reasonable wages
and salaries, provided that such a competition is free from any kind of
monopoly.
- Difference
between the employer and employee under the capitalist system, personnel
of each commercial concern are divided into two categories :
- The
proprietors who founded the trade or industry and the managers who bear
all responsibilities for benefit and loss.
- The employees
who are not very much concerned with either benefit or loss. They have
nothing to do but to spend time, energy and talents in their work, against
the fixed pay they receive.
Defenders
of the system argue that this form of function requires that the benefits
obtained from trade or industry _according to dictates of justice_ should
be collected only by whoever bears the loss and exposes himself to danger
Employees, undoubtedly, are entitled to have their legitimate rewards,
determined by market standards and in accordance with their ability and
the quantity of their work. Such a reward should not be increased on the
grounds that a trade or industry bears fruits or decreased in case of loss.
Employees, under all circumstances, have a right in obtaining their rewards;
these rewards or salaries are not increased or deceased except according
to the natural law of supply and demand which permits goods and commodities
to increase or decrease in their market value. If there are less employers
and more employees desirous of getting work the wages decrease and if there
is a scarcity of employees and a greater number of employers the wages
increase. Naturally, the difference between the active and the indolent
workers becomes obvious in these cases. Proprietors of various concerns
will try to win the loyalty of workers by rewarding and promoting them.
The higher the wage a worker gets, the better the product he produces;
it is in the interest of proprietors and employers that they may have to
spend a little more in order to get much more. Naturally, they try to reduce
wages, but it is true also that employees and workers wish to obtain their
requirements and raise their standard of living as easily as may be. They
are constantly looking forward for an increase in their play. It is natural,
then, that in achieving both goals a form of strife and struggle takes
place between employers and employees. In the case of wages, they continue
to be decided by a natural pressure accepted by both parties. This same
phenomenon happens regarding all matters of life.
- Dependence
on natural reasons for development . It is said that as profit from trade
and commerce are accumulated as a result of the reduction of capital and
the increase of production, the trader's personal interest requires, in
an attempt to increase his production, that he should apply the best and
the latest technical systems, look after his tools and machines, repairing
and cleaning them from time to time and acquiring big quantities of raw
materials at low princes. He should also make up his mind in developing
and promoting his business. This cannot be achieved other than by means
of a free economy and under special circumstances which may be free from
external interference or contrived tricks. Natural laws continue to utilize
the efforts of individuals and separate groups in achieving development
and securing welfare for all. These goals could not be satisfactorily achieved
by social measures only; there is a natural process involved of whose operation
no one is aware.
- Non-interference by the state. It is also said that unless individuals
enjoy freedom in carrying out their work, without any pressure or restrictions,
progress and social welfare, under the above-mentioned principles, could
not satisfactorily he achieved. A natural process has imposed a harmony
upon economic laws in that, should such laws work in agreement with each
other and in a cooperative way, they prove useful for people whether as
individuals or groups. This happens even though the individual works and
expends his energies for his own individual profit.
It is natural that the more the individual expects from his efforts in
terms of complete and unlimited benefits, the more energy does he apply
to acquiring wealth. This results in turn in the production of better and
bigger amounts of manufactured articles. If general competition exists
between merchants and manufacturers and supplies of raw materials in the
free market, prices become reasonable and balanced and the standard of
production improves; the market itself realizes the requirements of the
society. It is, therefore not the business of the started to interfere in
the natural function of the development of wealth since it will unbalance
it. The purpose of the state is to bring about circumstances which will
safeguard fully the individuals' liberties, ensure security, establish
order and administration, protect rights of ownership, fulfill its commitments
by the force of law and protect the country with all its trade and industry,
from attacks and outside dangers. It is the duty of the state to ensure
justice for everybody and to supervise its affairs. But it is not its duty
to be itself the merchant, manufacturer or the owner of the land since
it is not expected of it that it would do anything to arrogate to itself
the work of merchants, manufacturers and owners of the land and prevent
them from working as they wish. Interference by the state in such affairs
is not to be accepted.
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