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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. Difference between the employer and employee under the capitalist system, personnel of each commercial concern are divided into two categories :
    1. The proprietors who founded the trade or industry and the managers who bear all responsibilities for benefit and loss.
    2. 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.

  6. 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.
  7. 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.