Capitalism and Job Security

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Marx argued that capitalism would eventually collapse and give rise
to socialism, as a matter of historical necessity. Many now believe
he was wrong but they rest this less on the problem with his theory
than on the failure of the Soviet attempt to implement it.

Marx would probably have denied that the Soviets could be socialist – he in fact warned that if socialism is attempted in places where
capitalism never had a chance to develop, all that would be accomplished
is the "socialization of poverty" – exactly as it happened
in the Soviet bloc!

Marx had anything really important to say about the future of capitalism
isn't something we can deal with here but there is one point that
he clearly had right. He noted that in capitalism many workers would
get fed up with the system because of its volatility. This is especially
so when it comes to how capitalism affects job security.

a capitalist economy, which libertarians fiercely champion, there
is what Marx called economic anarchy. By this he meant that what
is sold and bought, where, for how much, and so forth are all unplanned
and unpredictable. It all depends on supply and demand, and that
goes especially for labor.

in the work force experience the down side of this anarchy when
their jobs dry up simply because others will have decided to buy
stuff that they do not produce, or do not produce in a location
where they have settled. So, in a pure capitalist market, working
people may have to pull up roots and move elsewhere in order to
remain solvent and prosper. Capitalism is, in this sense, destructive
of stability, especially as far as people's jobs are concerned.

is, of course, an enormous benefit that comes from this anarchy:
employment is actually more abundant in a capitalist system than
in all the alternative systems known. This is evident today from
comparing employment figures from much of Europe and those from
across the United States of America. While job stability is better
in Europe, at least over a certain time period and for some people,
than it is in America, there is a far greater abundance of employment
in America than in Europe precisely because of the greater measure
of anarchic capitalism enjoyed in the latter.

one believes, however, that all human beings require stability,
must be well rooted – so they can live in the same place for an
extended period of time, send their kids to the same school, go
to the same church, and so on – then one will think badly of capitalism
and will wish to sacrifice its principles of free trade and limited

actually believed it is when workers experience uprooting that they
would begin to overturn capitalism by voting for politicians who
enact measures that "stabilize" the economy via government
intervention and restriction on the use of private property. And
Marx probably had it right about many people, the ones who would
rather restrict trade, interfere with the movement of capital and
labor than risk having to adjust to market pressures.

what if people are far more adaptable than Marx believed? What if
many of us are quite able to adjust to new social and economic conditions,
while others would just as soon stay put and even have laws enacted
that make this mandatory for the rest? In the contemporary world
there is ample evidence that people can be quite happy while also
on the move. Mobility is nearly the norm, at least for a great many
of us, while being rooted in various communities is more of a preference
rather than a necessity.

this is indicative of how people are, that they have no innate need
to remain in one place, however much at times they may prefer this,
then any attempt to restrain trade and tame the anarchy of capitalism
is unjustified. Sure, this doesn't mean people will not attempt
to have their vested interests protected by politicians, that they
will not be willing to compromise the principle of liberty for the
sake of their convenience.

often breach principles of right conduct so as to have their way.

it is wrong to do so and a failure of nerve, to boot.

5, 2004

Machan [send
him mail
] holds
the Freedom Communications Professorship of Free Enterprise and
Business Ethics at the Argyros School of Business & Economics, Chapman
University, CA. A Research Fellow at the Hoover Institution, Stanford
University, he is author of 20+ books, most recently, The
Passion for Liberty

(Rowman & Littlefield, 2003).

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