I have heard countless times the trope that capitalism is an individualistic philosophy. That a capitalistic world is one where every man, woman and child stands alone. The critiques of capitalism are often fond of phrases such as: “No man is an island”, “Standing on the shoulders of giants”, or “You didn’t build that”. They are fighting a straw man.
Capitalism is anything but a philosophy for Robinson Crusoe. At its core, capitalism is a system which enables cooperation between millions of individuals so that they may jointly pursue their diverse goals. This is a process described as the Invisible Hand by Adam Smith. It is the same process described by Friedrich Hayek in The Use of Knowledge In Society. This is something which many economists and philosophers have hammered on for a long time. Leonard Read left us I, Pencil, an essay which illustrates very beautifully this process of cooperation among so many strangers which is embodied in something as small and apparently simple as a pencil. The story of the creation of this pencil was presented by Milton Friedman in Free To Choose.
The Competitive Enterprise Institute has made a short video bringing this essay to life. So next time you hear about the individualistic, alienating, selfish nature of capitalism, tell the story of the lowly pencil to your interlocutor. Remind them of the thousands of people throughout the world who have worked together and benefited through the capitalistic system in order to bring a pencil to your desk. It is a beautiful story that deserves to be told again and again and again. Capitalism is simply the name we give to the things we choose do together.
(HT: Don Boudreaux)