Capitalism as a Philosophy System

Capitalism has a philosophical component. It is the only economic system that not only protects an individual’s right of conscience but encourages the development and implementation of an individual’s moral philosophy.

At the heart of capitalism is money, a tool in which value is stored, allowing trade to happen on a grand scale. When individuals have to haggle over every transaction–whether the price of what one person has is of commensurate value to another’s possessions–the scale on which trade can happen is limited. And that’s to the detriment of the individual, vastly limiting what he can possess and holding him hostage to the particular desires of the man with whom he wants to trade for something he needs.

By creating a relatively objective scale of value, like  the American dollar, such messiness is dispensed with. As Francicso d’Anconia says in a speech defending money in Ayn Rand’s Atlas Shrugged, the root of money is the premise that every individual owns his own mind and his effort: “Money allows no power to prescribe the value of your effort except the voluntary choice of the man who is willing to trade you his effort in return.” d’Anconia continues. 

But, despite the value placed on money by those who use it to trade, capitalism is hollow without individuals acting in a way that promotes their own values. For good to be produced, someone must have an idea about a need or desire that needs to be filled. And for those goods to be valued, a consumer needs to see and recognize the value captured in them by their producer. 

As d’Anconia notes in Atlas Shrugged: “But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires.”

The so-called money speech in Atlas Shrugged is Rand’s masterpiece on why capitalism is as much a moral system as an economic one. Though Rand wrote elsewhere in defense of money, nowhere else did she write so eloquently of the philosophical roots of an individual’s purchasing power.

That speech emphasizes the supremacy of the individual mind, with its ability to take abstract values and recognize them in physical goods and services, in a capitalist system. Yes, the individual is one small part of an economy, but because of the dual-layered value of money, that individual is totally empowered. Not only does money give him the freedom to trade his labor for goods he needs at prices he thinks are fair, it allows him to use his reason to identify values he believes in and act, through his dollar, to promote them.

And that relationship works both ways. Rand’s philosophy of self-interest recognizes that the individual needs a way to make the values he believes in tangible: to bring them forth into the world and see that the world can be made in his image. This is accomplished through production. And it’s only in a capitalist system that the producer has the freedom and ability to do so: to trade his labor for money, and his money for the goods which he can use on pursuits that have no value to his survival other than to fulfill his desires.

A 2021 poll showed only 46 percent of young adults aged 18 to 34 viewed capitalism favorably. But, despite that negative attitude, several market trends actually embrace Rand’s philosophical views of capitalism. 

The first of these is a millennial trend, which values experiences over goods. On average, millennials would rather spend their money on rewarding experiences like a meal or vacation than on the accumulation of consumer goods, like houses and things to fill it. 

That’s a philosophical choice, rooted in a desire to live a life of individually–determined value. And it’s one only possible under capitalism because only under capitalism does money allow individuals to exercise that kind of discretion over what things are of value to them.

Second, polling also shows that a majority of consumers–82 percent in a 2022 Harris poll commissioned by Google Cloud–want to purchase goods from brands whose values align with their own. There is a fundamental recognition there that money is a tool to be used to promote things that are of value to you.

Such a view also requires that the individual have a cohesive set of value-judgments and an idea about how to apply them to the world in a way that suits their self-interest. And that view is the core of objectivism.