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John Thrasher joins the show to talk about how capitalism has been misinterpreted.

Aaron Ross Powell
Director and Editor
Trevor Burrus
Research Fellow, Constitutional Studies

John Thrasher is Assistant Professor in the Philosophy Department and in the Smith Institute for Political Economy and Philosophy at Chapman University in Orange County, California. He is also an Adjunct Senior Research Fellow at Monash University. He earned his Ph.D. in Philosophy from the University of Arizona in 2013.


John Thrasher discusses a framework for comparing the economic systems of capitalism, feudalism, and socialism, and their roles in a range of contemporary issues, such as climate change, competitive consumption, unemployment, taxation, social inequality, global trade, and intrusion of markets into taboo areas.

Why do people dislike capitalism? Why did people think capitalism was a good idea to begin with? What is the difference of capitalism and free markets?

Further Reading:

The Ethics of Capitalism, written by John Thrasher & Daniel Halladay


00:07 Trevor Burrus: Welcome to Free Thoughts. I’m Trevor Burrus.

00:09 Aaron Powell: And I’m Aaron Powell.

00:11 Trevor Burrus: Joining us today is John Thrasher, Assistant Professor in the Philosophy Department and in the Smith Institute for Political Economy and Philosophy at Chapman University. His new book, co‐​authored with Daniel Halliday is The Ethics of Capitalism: An Introduction. Welcome to Free Thoughts, John.

00:27 John Thrasher: Thanks for having me.

00:28 Trevor Burrus: So your book is a textbook of sorts, maybe, a little bit, definitely more readable than your average textbook, but it’s a textbook. What was the intended audience and purpose of the book? Well.

00:41 John Thrasher: Well, the intended audience started out as undergraduates, and it’s still primarily focused on undergraduates, although we think other people will probably get something out of reading it, but the book came about from teaching some classes in this general area, and just noticing that, basically, everyone seemed to hate capitalism for some reason or another. This seemed to be true on the left the right, and in the book, we talk about this, that if you just… When we first started writing it, we entered in on Google for an auto completion, “capitalism is… ” and we got up all kinds of lists of things like “bad,” “evil,” “the root of all evil,” “slavery,” and that kind of thing. And so it just kind of puzzled us why everyone hated capitalism, and then what it is that they exactly hated. Was it capitalism exactly, or was it the status quo, or was it other kinds of injustice that they were equating with capitalism, and this led us to want to ask more detailed and involved questions about capitalism, its ethics, and people’s responses to it.

01:42 Aaron Powell: This dislike of capitalism certainly seems to have been a long time feature on the left, and we’re seeing a lot more of it on the right with the especially like national conservatism and the populist movement there. But is this really a new thing? Do people dislike capitalism or whatever they imagine capitalism to be more than they used to?

02:03 John Thrasher: It’s hard to say. I mean, I can say from our experience writing the book when we started writing the book, people didn’t like capitalism, but it was nowhere near as widespread as it got when we basically were finishing the book and after we published it. And some of that had to do, I think, with the rise of the nationalist right, so you were getting it from both sides. But it does seem to be more mainstream than before, so when you have outlets as diverse as Teen Vogue and the Claremont Review of Books both attacking capitalism, you know there’s something that’s going on.

02:38 John Thrasher: We also started notice a bunch of other works on capitalism, books, so Tom Piketty’s book, for instance, on Capital in the 21st Century, is very popular, Antony Loewenstein, Naomi Klein, Shoshana Zuboff, Oren Cass on the right, a lot of people were coming out with books, and what we noticed about them was they all had a kind of… There was a modifier to capitalism, so in Piketty’s book, he talks about patrimonial capitalism, Loewenstein talks about disaster capitalism, Klein talks about the shock doctrine and disaster capitalism or surveillance capitalism, Zuboff, or these kind of things. And what we started thinking is, well, maybe it’s just that first modifier that people don’t like, it’s the surveillance, or it’s the patrimonial aspect or it’s the disaster part or whatever, is it really capitalism that people are objecting to? So then we started digging into that.

03:32 John Thrasher: But you’re right, that people have been hating capitalism since the beginning in a sense. And so one of the questions we wanted to ask when we were writing the book was, why did people think that capitalism was a good idea to begin with? Like at some point, people were, like Adam Smith, the early political economists, were advocating for capitalism, and of course, there was this great kind of explosion in the early or mid‐​18th century on that we call capitalism, so why did people think it was a good idea at the time, if indeed they did, and what would those people think today if they were looking at our society?

04:06 Trevor Burrus: It seems like some of these people and some of the critics you mentioned, they describe a lot of things as capitalism. I once heard someone, it might have been Naomi Klein, but don’t quote me on that, but someone along those lines described the drug war as capitalism, which struck me as very interesting. But you do hear a lot of things like this where the word is used to invoke almost all wrongs that are in the world today, so did you, to sort of counter that tendency, did you guys try to define it in a more… Just at least… So at least some things are not capitalism, such as the drug war, and we can like at least get some idea of what this might be.

04:44 John Thrasher: Yeah, and so this really was something that was striking to us, both talking to students and reading things in the media that just basically anything that people didn’t like seemed to be identified with capitalism, and we thought, well, some of those things are probably related to capitalism, but some of them certainly aren’t. Like when you hear racism and capitalism combined, well, racism has existed for all of human history, as far as we know, or slavery has existed, or sexism or whatever, right, so those can’t be caused by capitalism. Now, maybe there’s aspects of capitalism that make them worse or perhaps even better, but they can’t be the same thing, and so we want to… So as you point out, we had to figure out, well, can we come up with some kind of analysis or definition or specification of capitalism that allows us to kind of isolate it and think about what characteristics it has that are unique to it, and then what aspects of the status quo that people don’t like are they pointing to and claiming that that’s capitalism.

05:46 John Thrasher: And so that’s actually a big part of the first chapter of the book, is trying do that, and there’s a lot of pitfalls along that way, and one of the things that we come up with in the book is the idea that I think typically these discussions go, is that we don’t like something, that thing is capitalism, let’s reject it in favor of what… I don’t know, usually socialism, let’s say. But we want to say, well, no, there’s kind of a before capitalism and there’s an after capitalism, if you want to think of it in time scale, or we like to think of it as a kind of spatial analogy, we have a triangle in the book, where we have feudalism, which is kind of hierarchical societies, and socialism, which is kind of non‐​capitalist societies, and then we think about what are the aspects of each and then we say, well, look, you could identify any moment in the status quo or a moment in time in a different society as being kind of some space in this triangle that might be closer in some respects to feudalism or socialism.

06:41 John Thrasher: So then we say there’s things that you might not like about the world around you, but it’s just an open question whether those are distinctive of capitalism or not. They might be vestiges of feudalism that are still around, or they might be aspects of socialism or some combination. And so to really figure out what it is that you don’t like, what the ethical problems that you’re pointing to are, you really need to get clear on what are the distinctive characteristics of capitalism.

07:07 Aaron Powell: Is there a difference between capitalism and free markets? A couple of months ago, we had on a guest, Cory Massimino, who calls himself a free market anti‐​capitalist anarchist, and so is there, is that an incoherent idea or is there a meaningful distinction?

07:26 John Thrasher: I think that there has to be a distinction in principle between markets and capitalism, and this is why… Now, so the later question about free markets and anarchism is a slightly different one, but I’ll just start with the first, which is that we think that markets have more or less always existed to one degree or another, and will exist in basically any institutional framework. So you have markets in prisons, you have markets in illegal goods, you have markets in drugs or whatever it might be, you had markets in Ancient Rome, but a lot of these… I would not say that any of those are distinctively capitalistic in any fundamental sense.

08:04 John Thrasher: So then we ask, well, what is distinctive of capitalism? So our thinking is that capitalism is the institutional framework around markets that kind of in some ways to preserve the openness or functioning of markets. Now, that’s all very normatively loaded, and so we get pretty specific about what we mean by that, but I would just say that markets and capitalism are never completely free, because there’s these institutional structures that define various kinds of behavior in the market, what acceptable contracts are, what kinds of things count as property, how much trade and with whom you’re able to do.

08:47 John Thrasher: And so we say in capital societies, those tend to be kind of… Those parameters tend to be turned in particular directions, whereas in social societies or kind of feudalist, non‐​capital societies, they tend to be turned in other directions. I understand the aversion to the term on some level, because as we know in the book, capitalism is a kind of… I wouldn’t say it’s exactly a pejorative, but it was coined by the opponents of capitalism kind of early on, and so it’s not exactly probably a name that you would choose for the system that you’re trying to defend. But on the other hand, I just can’t think of a better word for it, that there’s this kind of broad institutional framework of the sort that we see in developed and open societies, that’s how I would… I have more specific kind of parameters of what that amounts to, but that was the basic notion that we kind of started with.

09:46 John Thrasher: And then so we started looking, well, what features did these types of societies share and then thinking about, well, what’s essential about that and what’s not. And then we kind of tried to zero in on what we thought capitalism amounted to.

10:00 Trevor Burrus: Well, as you point out in the book, and you mentioned previously, the early days of capitalism, before it even had a name, featured various thinkers, Adam Smith probably being the most prominent, John Stuart Mill a little bit later, and people like Adam Ferguson too who viewed the endeavor of looking at these governing systems and economics, although that term itself is a little bit new, they viewed it as sort of a holistic thing, encompassing a bunch of different things, political philosophy, normal philosophy, economics, and created a justification for capitalism that was a little bit more, I would say, rich then maybe after the 20th century, when things get segmented out. Is that a sort of tradition that you were trying to resuscitate, maybe, or at least like work within to try and bring something back that maybe is a way of talking about capitalism that students today haven’t really heard too much?

10:52 John Thrasher: Yeah, that’s exactly right. So that was definitely one of our aims. We look back at the early defenders, but also in some ways, creators of what we think of as capitalism, especially Adam Smith, but David Ricardo, John Stuart Mill, a lot of people you mentioned. We talk about these people as, we talk about this as kind of the golden age of political economy, and what we mean by that is exactly as you were saying, as not, these people weren’t just economists, and in fact, the idea of an economist wasn’t quite around at that time. Adam Smith was primarily a moral philosopher, or we might even say partly a political philosopher, or earlier versions of that, David Hume, one of his friends, was also a philosopher. John Stuart Mill is certainly a very important philosopher.

11:37 John Thrasher: So these early political economists were certainly concerned about ethics, they were concerned about political theory, they were concerned about what we would probably today called political science, and then kind of economics business, those kind of things. And so it was a very holistic kind of approach, and so we talk about that in the book, is we call it political economy, but what we really just mean is an approach to economics that also takes seriously a lot of these other questions in terms of ethics and politics. And so today we would probably think of this as a PPE or a Philosophy, Politics and Economics‐​type approach, which I’m very much in that kind of mold and I know that my co‐​author is as well.

12:15 John Thrasher: And so we’re kind of interested in that fusion and thinking about how… The benefits that you can get from looking at economic questions with a moral lens and political lens, and we’re thinking that it’s pretty hard to address a lot of these questions profitably without kind of triangulating in all those different ways. And so we try to do that as much as we can in the book, and we look back at the history of political economy and look at the kinds of questions that these early political economists were asking and answering to try to see why capitalism seems so appealing and especially appealing and compared to what. And we say, well, looking back to the society before or the time, the society that was kind of, they were moving away from, which we characterize as a kind of feudal society, but really it’s just a hierarchical, not very open society, kind of the last gasp of these closed societies in Europe. And they’re arguing against that from a lot of different angles.

13:12 Trevor Burrus: If you talk to probably a pretty typical college student today, and insofar as they know about Adam Smith as maybe “the founder of capitalism,” they might conclude that Adam Smith and maybe John Stuart Mill, but probably definitely Adam Smith, was a reactionary, profit‐​driven kind of business‐​friendly guy, kind of creeping into the fascist realm, which is of course how capitalism is often described. That doesn’t seem to be an accurate depiction of what Adam Smith was actually doing.

13:45 John Thrasher: No, Adam Smith is a kind of a great revolutionary thinker at his time, I would say, and that’s not just in terms of political economy, but also his thoughts on politics, and I would also say on morality and philosophy generally. So his great friend at the time was David Hume, who was one of the more revolutionary thinkers of all time, I would say. And my interpretation of Smith is that he follows along in Hume’s footsteps in a lot of ways. And you could say the same thing about John Stuart Mill. Now, Mill was a political reformer, he’s a complicated figure, he was on the board of the East India Company for a long time and a manager there, but he was also a reformer in favor of women’s rights and contraceptives, and… So he’s kind of all over the place, as a lot of these guys are.

14:35 John Thrasher: And part of the reason is because their world is changing pretty rapidly, things are changing, and they’re trying to make sense of them, and they’re trying to come up with ways to think through this new world that is starting… They’re kind of in the birth pangs of in a sense, and Smith probably does this better than anyone else and The Wealth of Nations, I think could profitably be read as a kind of blueprint for that world. And it’s probably no surprise that Adam Smith, unlike virtually all of his contemporaries, he’s got what we would consider the right answers on things like slavery, imperialism, colonialism, on the American Revolution, even.

15:13 John Thrasher: So the reason for that, I think, though, is that he has a frame of mind that he’s looking at things in a way that we would I think find more congenial than a lot of others. Now, contrast that to the hero of the anti‐​capitalist, which I would say maybe you can pick two, but certainly Marx, probably Rousseau as well, and these are actual reactionaries, these are people who are reacting against the world that they see emerging around them and trying to either go back to some kind of edenic past, in the Rousseau sense, or towards a kind of post‐​Millinarian future, in Marx’s sense.

15:58 John Thrasher: And so I basically think that part of the reason why we focus in the book on a lot of these characters, which we do, so we follow a lot of the thoughts of people like Smith and Mill and even Marx a little bit throughout the book, is to kind of show their train of thought and what they’re responding to. And students tend to, I think, be surprised when they… Part of the thing when we’re teaching this book and on the website, ethic​sof​cap​i​tal​ism​.com, we have a model syllabus that people can use to, if they want to teach the book, and on that there’s also a lot of primary sources that we teach with the book, so John Stuart Mill and Smith. And when students read those, they’re often I think surprised at how different these people turn out to be than what their cartoonish image of them is.

16:43 John Thrasher: And we try to quote them a lot in the book, although there’s kind of limits to that. We also found, however, when we were teaching, and one of the reasons why we wrote the book is just that students have a little trouble with some of the primary texts because they’re written in the 18th century or 19th century, and so sometimes it’s important to kind of give them some context for that. And part of that is trying to give them the political and economic context that a lot of these writers are working in.

17:11 Trevor Burrus: You quote Elizabeth Anderson, who’s been a guest on Free Thoughts a couple of times, and her quote that said, “Free markets used to be a cause of the left,” which is an interesting quote, but also kind of maybe is a little bit difficult because it plays into this left‐​right distinction, which doesn’t seem to make much sense. But at least insofar as we’re saying that there was a time when champions of free markets were radical social reformers looking to make the world more egalitarian, I guess, in the way that you describe.

17:41 John Thrasher: Exactly. That’s one of the things that we wanted to highlight in the book. I totally agree with you that thinking in terms of left and right is extraordinarily confusing and I think misleading, and I even like lapsed into it earlier when I was thinking in terms of one dimension of time. And that’s precisely why when we’re thinking… When we were thinking about capitalism and socialism, we wanted to think about it in a kind of two‐​dimensional triangular plane, if that makes sense, to think about it in slightly different ways. But the point to note is just that the people who cared about capitalism at the outset also cared about what we would consider today things like egalitarianism, sometimes justice, but certainly making people’s lives better, giving them more opportunities to live different kinds of lives, expanding their… Expanding what kinds of relationships that they could have or what they could think about their children doing. And so I think it’s strange today for people to kind of miss that aspect of it.

18:40 John Thrasher: And so that was one thing that we wanted to highlight, but also we wanted to, again, bring some of these characters back and think about, well, what of their concerns are still live issues today, what are things that they would still have questions about despite the changes that have happened.

19:00 Aaron Powell: Is there a tension between those things, between capitalism and the pursuit of the various other values that you mentioned, like justice, such that you are eventually going to get a coming apart, a tearing apart there. Because I’m thinking of one of the common objections you hear about a capitalistic system is that it’s almost in a sense fundamentally anti‐​ethical, that ethics is about figuring out what the right values are in your life and in the world, and the actions we can take to pursue those, but capitalism, necessarily by its very nature reduces value to profits, to what you can buy and sell, and for how much. Like Milton Friedman, say, a corporation’s only responsibility is to maximize profits for its shareholders and all these other things, justice and compassion and respect and the good of people be damned is the way that that gets interpreted.

19:56 John Thrasher: Is that a fundamental tension? How can you, in a system that measures everything based on how much it costs in the market and how much profit you can make by selling it, how can you have space for those other values?

20:10 John Thrasher: We sometimes get asked questions, not quite this question, but along these lines, where they talk about something like the logic of capitalism or this kind of thing, that capitalism demands a certain kind of result or that it measures things along one type of value, let’s say money, which is in the background there as well. And I would just say that that’s certainly a possibility within a capitalist system, but what capitalism does, from my point of view, is it creates a lot of possibilities for value that then people can then choose to pursue or then commensurate in various ways in the market and outside of the market.

20:51 John Thrasher: So there’s no law of capitalism that says one must kind of advance the profit in the most narrow way possible or something like that, that’s a conversation we can have about what the role for businesses should be in a capitalist society. So that’s exactly what Milton Friedman was doing when he was making that case, and others have responded to that case since then. And so one of the things that we wanted to point out in the book, and I think in some ways the great purpose of the book is to raise this point and say that there’s a lot of ethical questions that you can have within a capitalist society that are not answered by capitalism itself, by existence of capitalism.

21:29 John Thrasher: So in some ways that’s to, the kind of push back and say that capitalism is a pretty diverse thing, it’s a pretty diverse set of institutional structures that all have certain characteristics, but that there’s a lot of different ways of doing them, and within that there’s a lot of different ways to live your lives and behave, and so oftentimes, if you have a class on capitalism of the sort that Dan or I might have been asked to teach on capitalism or something like that, or socialism or justice and economics, it might just be a class about capitalism versus socialism, like what’s the ethically more acceptable system.

22:04 John Thrasher: And we really didn’t like that kind of… And so you might read something like Nozick or Jason Brennan on the one hand, and then like Jerry Cohen on the other hand, rejecting capitalism and say, well, here’s these two kind of ideal systems, which one do we like? And we really wanted to reject that approach because we wanted to say that within a capitalist society… So basically the point is to say there that the ethical question is about whether you want ethics or whether you want capitalism is. So capitalism does all these great things, but it can’t be an ethical… It can’t be… There can be interesting ethical questions asked within capitalism, it’s about efficiency or welfare or something like that.

22:41 John Thrasher: And then on the other side, you have socialism, which has all these drawbacks, but it might give you the ethical advantages that you want. And we want to say, it seems within a capital system, there’s a ton of ethical questions that you can still ask profitably without rejecting capitalism. And so that’s kind of where we’re coming from, and that question about businesses and the role of businesses, and the ethical responsibility of businesses and those types of questions about consumption or about whatever it might be, to me, those are ethical questions that don’t… Answering them one way doesn’t make you into a socialist or turn you into an anti‐​capitalist, it seems like there’s a lot of different ways of conceiving about how different kinds of businesses should work within a capitalist society.

23:27 John Thrasher: Now, this may be pre‐​empting a later question that you have, but because of the way that we think about capitalism as this kind of institutional structure that has a bunch of different characteristics, every capitalist society exists within a democratic society for the most part. And so politics and economics are not going to be separate, and they need to be kind of intertwined in various ways, and so in a democratic society, these are the kinds of questions that we’re always in some sense, negotiating with one another, as we go along. So capitalism doesn’t answer all of those questions, they have to be answered by people thinking through ethical questions individually, but also questions that we think about democratically too.

24:14 Trevor Burrus: We were talking about socialism and capitalism, but you brought up feudalism a couple of times as one of the points on your triangle. It’s interesting that… It struck me when you said, okay, feudalism, that seems quite long gone, I’m picturing the constitutional peasant in Monty Python or something. It’s been quite a while since we’ve had a feudalistic society. How is that like a relevant point on the triangle that you’re describing between capitalism, socialism and feudalism?

24:45 John Thrasher: Well, we thought it was an important point in logical space, but also one that you do see around you in various aspects. So we think of feudalism as characterized primarily by societies that have status hierarchies, where there might be some private ownership and there’s not full public ownership of everything, but that it’s not very widespread, and the people who do have the ownership of goods and oftentimes services, they also have other kinds of privileges, usually in terms of power, being able to order people around, people have different statuses in those societies that allow them different privileges with respect to what they can do, the kind of jobs they can have, that kind of thing. And also that the economy tends to be pretty… The economy and the political system tends to be pretty closed and planned in various ways, so either a small group of elites or something like that, that’s running the show.

25:44 John Thrasher: So we thought that that was important, partly because we think that’s a much better characterization of a lot of the societies that existed before capitalism came along, say in Europe, but also a good characterization of a lot of societies that still exist that don’t seem to be obviously socialist in the way that we might think about it, but that are also not capitalist in the sense that we describe it. And so one of the things that we noticed, and again, this was also influenced by Elizabeth Anderson’s work, was just thinking what aspects of, that people point to as being maybe unjust or unethical or just bad in some other way in our current system might actually be vestiges of feudal society that still kind of exists, that capitalism in some sense never overturned, or maybe these are kind of neo‐​feudal revivals in some ways, or something like that.

26:40 John Thrasher: And of course, we use feudal kind of advisedly, like it does sound like a Monty Python or a Game of Thrones‐​type of situation, but we’re really just thinking of hierarchical, closed societies, probably what North, Wallis and Weingast would call natural states or something like that, or extractive societies, that’s really what our target is there.

27:04 Trevor Burrus: Well, there seems to be in the… In recent rhetoric, you mentioned a list with Anderson, you also mentioned Piketty, some of them do like to describe… I mean, Elizabeth in particular with her private governance book, but do like to describe the sort of tendency of capitalism to create these hierarchies, and Aaron alluded to them too, that maybe there is a feudal tendency in capitalism, unless you maybe change some rules or have some different taxation or something like that.

27:35 John Thrasher: I think… So one of the insights of a couple of important works in I guess what you might call development economics, or the Acemoglu and Robinson stuff and also the North, Wallis and Weingast, is it seems to be that… I think sometimes we think about this as capitalism is creating these things, but it might be more true to say that these are just features of humans in some sense of living together, that they tend to want to organize themselves in ways where they can organize the rents together or benefit one another, those kind of things. And capitalism, at least the way that I view it, it pushes against a lot of those tendencies and it makes them very expensive or difficult, but people find ways around it, or they sometimes can use the elements of capitalism to magnify some of those aspects.

28:24 John Thrasher: And so one of the questions that we want to ask is, at least in regards to say what Anderson is concerned with in workplaces, is this a feature of capitalism that is… Is this something that we should be worried about going forward as we become more capitalist, say, or is this something, and it should just lead us in the direction maybe away from capitalism, or is this a revival of an older form of human organization that maybe capitalism had done something to kind of reduce, but maybe it’s coming back, so I guess the question you’re kind of always asking is, what’s causing what, what’s the real… What’s the disease here? If you want to think of it as a bad thing. It’s like you need to know what that is before you can think about what a possible cure might be.

29:11 John Thrasher: And if you thought that capitalism is what’s responsible, but in fact, it’s feudalism that’s responsible or some vestige of it, then by reducing capitalism, you might actually be doing something worse, you might be making the problem worse. And so, for instance, Piketty’s a great example, if you look at his work, which his most recent book is incredibly expensive, but if you just look at Capital, a lot of what’s going on there, it seems to be it has to do with real estate, basically, holdings by people through family, so patrimonial real estate holdings, in particular kinds of environments where you have both a low growth economy and you have massive booms and real estate values that has been passed down over over time.

29:53 John Thrasher: And so the case that he’s making is, well, this looks like the classic rentier coming back, being able to extract rents from the population without having to work. And the question I ask there is, well, is that a natural… He thinks that this is kind of a law of capitalism that this will happen; maybe, but it might just be a feature of the institutional structure that’s allowing these huge gains from real estate to go on while at the same time having very low growth environments in terms of capital returns. So anyways, there’s a lot going on there, but the point is just to ask, for us to point out is to think sometimes these things might be related to capitalism directly, but they might not be, and so it’s important to figure that out. So a lot of the work that we’re interested in doing since then is kind of teasing out what those causal and logical relations are.

30:43 Aaron Powell: There a role then for potentially government in addressing these? So let’s take some of the feudalistic aspects that people identify in capitalism, and we’ll go with… Maybe be the awesome power of bosses over their employees in large firms that can sometimes feel disproportionate or lead to increasing inequality or whatever else, that, even if that is… We identify that as feudalism and not pure capitalism, it still exists within these capitalistic firms, and it has a strong cultural component, both within those firms and among the people who run them, that that’s the way that they’re used to running things, and outside of it, in terms of the way that we lionize the swash‐​buckling CEO, Steve Jobs is the hero, and Elon Musk is the hero and so on. Is there then a role for government to step in and say we’re going to take steps to kind of rein in this stuff, we’re going to limit capitalism in a way to readjust that culture, or is there a way to fix these problems without having something outside of the system come in and put a thumb on the scale to move them and maybe a less feudal direction?

32:03 John Thrasher: Well, the first thing I would say is that I think it’s very misleading to think of letting government come in and fix capitalism, just like putting it that way, which I think is a very natural way to think of things, and so in the political discourse, but also in economics there, in political science, you would hear this as well, and the reason is because at least in our way of thinking about it, and I think this is definitely the right way to think about it, is that capitalism is not something outside of the political process, it’s kind of an emergent complex social system that’s partly determined by the political system that it’s working within and the legal structure and the norms and various other things, and…

32:42 John Thrasher: So anyways, the point is, what I would say is there, is that if you’re seeing problems in the status quo or things that you think are problems, it’s weird to think of the government going in and fixing it, because in some sense that whole structure is what’s allowing the emergence of this thing to go on. Now, it might be that people are acting illegally or that they’re skirting the law, or that there’s loopholes or something like that, in which case then, yes, the government does need to go in and fix it, but it’s probably the case that whatever the rules that exist now are the things that are making that more attractive for people to behave in that way, or for those kinds of norms to emerge, and so you have to look very carefully at that as well.

33:20 John Thrasher: So anyways, that’s a kind of… I don’t mean to be fiddly with that point, but just to say that we shouldn’t think of capitalism as an economic system that can then be tinkered with by the political system, because the two are not separate, they’re connected in very important ways, and in fact, I would say they’re kind of overlapping in and connected in very complex ways, and so the vision of the politician or the political system that can then start twisting the dials on the system is, I think, very much mistaken. But then that does raise the question, well, what are the kind of remedies for this.

34:00 John Thrasher: And I think, well, the first thing is to recognize when there are problems and so to talk about them openly, and then of course, think of some political solution, some legal solutions, some solutions in terms of moral suasion, but also in terms of different kinds of firms, different kinds of contract types, those kinds of things which can really expand the possibilities of options within the capitalist system. And so one of the things I would say is that, one of the huge advantages that I see of capitalism over every other system, it’s just a diversity of types of, say, employee‐​employer relationships that are possible in terms of the possible kinds of employment contracts, in terms of the possible types of contracts that you can have for trade or for services, and also for the different kinds of legal protections of property that exist that just don’t exist under any conceivable socialist or feudalist system.

34:53 John Thrasher: But even within capitalism, there’s various different ways to do that, so like in California, for instance, on this recent election, there’s a big debate about whether or not Uber drivers should be, or not just Uber drivers, any freelancers should be allowed to have certain kinds of labor contracts with Uber, with other employers, or whether they have to have a very specific kind of labor contract that says they have to have set hours and bosses and all the rest of it. And so those are the kind of questions that I feel like we have in a capitalist system, it’s not so much whether politics should regulate the economy; of course, it’s always been regulated, there’s always laws and various other things that are coming in, but it’s about those types of questions, like what kind of labor contracts do we think are acceptable.

35:36 John Thrasher: Certain ones we do not think are acceptable, right. So we’re not going to have any kind of indentured servitude or anything like that, but that diversity is really where I think a lot of the questions that we’re talking about are, and you see this in questions about tech regulation too, should we have certain kinds of legal protections or not, should we allow for various kinds of employment contracts.

35:58 Trevor Burrus: Well, Aaron, I think Aaron’s question, if the government’s going to regulate or minimize some of these kind of feudalistic hierarchies. For example, we have existing rules that govern how corporations can form and how big they can get and how much of a sort of a monopolistic market share they can own in a given area or a given country, and as you point out in the book, for Adam Smith, his vision of, I think it’s a nation of shopkeepers, I think is the phrase, of people, small businesses, 10 people working, people working for wages, that doesn’t alienate them. And in that sense, it could have been the case that if Adam Smith could have jumped forward in time and met and had coffee with Karl Marx, who’s starting to see the beginning of industrialization on a broader level, they could have had agreement about whether or not these firms are sort of not achieving the moral and the flourishing ends that the system that Adam Smith described was supposed to do.

37:00 John Thrasher: Yeah, I think that there’s definitely some of that, and I think what’s interesting about Marx, too, is that he’s coming in a very particular moment, what we might think of as the Dickensian height of industrial capitalism in the UK, in particular, at that time. And so I think any of us that were kind of looking at that system would probably be pretty appalled by it, and the question is, well, does that lens make sense in our contemporary system, who’s the better kind of interpreter, is it Marx or Smith or maybe some combination. What would they think of each other in a lot of different ways.

37:37 Trevor Burrus: I think they had the same theory of value, right, they both had a labor theory of value to some extent, so they would agree on that.

37:43 John Thrasher: Yeah, I think there’s a lot of questions about that, but I do think, yeah, they both see things in kind of… From similar starting points, at least, definitely, I’m thinking about that. The question is, I think, ultimately… So one thing that does go back to a point that I think Aaron was maybe raising earlier, it’s just that capitalism as an institutional system, one of its interesting features… I think you could say the same thing about democracy, too, but certainly with capitalism is it doesn’t really have an aim, exactly.

38:18 John Thrasher: So the point is not to create a society of equal people or to create a stable society or a society that institutes justice or anything like that, there doesn’t seem to really be any point at all, it’s rather just to create the conditions that allow people to do certain kinds of things, namely work for whomever they want, and vice versa, and trade and those kind of things. And out of this emerges a lot of possibilities for different kinds of lives, experiments in that way, and the ability to get different things and live perhaps better.

38:56 John Thrasher: So this is one of the aspects of thinking about capitalism and ethics that is often very challenging, which is that there’s no kind of imminent notion of ethics or justice in the background of capitalism, right, and I think… So you don’t have those resources by which to criticize it, whereas I think with socialism, you probably do. A socialist system that is highly inegalitarian or whatever, or that’s focused on profit or something like that would be on its own lights defective, I would think. With capitalism, it’s less clear what that amounts to, because there’s a lot of different possibilities within a capitalist system.

39:34 John Thrasher: So you can run, you can have worker‐​owned firms, you can have small firms, you can have big firms, and there’s a diversity of these types of things, and… So one of the things that you have to do, in some sense, is you have to bring whatever ethical material you have to bear, and that’s going to be pretty diverse, because not everyone’s going to share the same backgrounds. And so part of what’s going on is not just a marketplace in terms of these goods and services, but also a marketplace in terms of possibilities, so how do we want to have our… Steve Jobs, you mentioned a couple of minutes ago, right, and like however much of this was hokum and how much of it was real it’s hard to know, but part of his message at the outset with Apple was that we wanted to have a kind of democratized humane version of computing or something like that, so where everybody could have access to the computer, rather than it being merely the province of a mainframe or a big corporation or a government or something like that.

40:38 John Thrasher: And that’s a vision, that’s an ethical vision of a society I think that people can try to implement and put in place. And I think that’s the kind of marketplace in terms of not just goods and services, but also of visions of types of living and types of lives and societies that’s also on the table in this kind of society.

41:00 Aaron Powell: One of the big objections to capitalism on the left is globalization, and I guess we’re seeing that increasingly on the right as well, and a capitalist firm wants to find new markets to sell its products in, and it also wants to identify potential new steps in its supply chain that are cheaper, more efficient or whatever else. And so looking outside the borders of its nation is one way to do that, but at the same time, it feels like that is potentially capitalism forcing itself upon those who didn’t ask for it and might not want it, you know, these indigenous societies or places that have different sets of values than the capitalist West suddenly, or going to be dragged into capitalism the… Without having much say in that. Is that a worry? Is that like a genuine objection to globalization?

42:03 John Thrasher: Well, so, again, I would point back to this distinction between capitalism and commerce, in a sense. So Adam Smith famously argues that human beings have a natural propensity to truck, barter and trade, exchange, so the idea is supposed to be that humans in some sense are trading creatures, we’re social creatures, and that we’re trading creatures, and in one of the chapters in the book, I think I talk about homo mercator, man the trader, in some sense, as being a distinctive aspect of what it means to be human. And so in that sense, I think it would be hard. There are very few societies that don’t engage in kind of some kind of trade. The question is just what institutional framework did they do it within. And typically these societies, they do it within a framework that is pretty closed and structured by various political elites, so that they can extract the most benefits out of it.

42:58 John Thrasher: And so yeah, a lot of times, they’re happy to deal with various kinds of firms on their terms, but then this can lead to really bad results for indigenous populations. And I think insofar as Naomi Klein and all these people have a point, the point is just that usually these firms from capitalist societies are dealing with societies that we would characterize as feudal, so there’s not open access to the markets, and there’s not democratic control once they enter into them. So there’s one side of the equation, which is that maybe these people don’t have a choice to engage in trade on these terms. The other side is they’re usually being used as extractive resources for their political system as well, and so…

43:38 John Thrasher: But the solution to that problem strikes me as being kind of more capitalism in a sense, or at least more capitalism and democracy in those countries, not less, partly for the reason that it’s not clear that people… People do seem to want to trade with one another and they seem to benefit from doing so, that seems to be a natural part of human life. But the question is on what terms should we trade? And those are going to be determined oftentimes by the political system and typically by the domestic political system that they’re engaging with. And so as a citizen of a country like the United States or as a shareholder in a firm or as just a person talking in a society like ours, I think we can try to rein in certain kinds of practices that might be obviously extractive or exploitative, but at the end of the day, these societies, unless they’re kind of responsive to the interest and values of their people, it’s very difficult for the economic system to reflect those interests, I think.

44:46 Trevor Burrus: One of the chapters in the book that I enjoyed because it’s a… I don’t feel like it’s discussed enough, you definitely touch on consumption, globalization, things we’ve been talking… Bad jobs and stuff, but the idea of why do we work so hard. Productivity gains have been through the roof. Keynes talked about 15‐​hour work weeks, you’ve had science fiction authors for decades, you know, postulating that we would all kind of sit around as automation took over the basic things, we would have a lot more time to enjoy flourishing lives. Instead, you see a lot of people in capitalist countries working very hard to do different and new things, and this is a critique by many people. Is that a valid concern or this just like basically tastes that people like to work and they like to work when they feel productive and that they’re doing something they like, so it’s not that big a deal if they’re working hard.

45:37 John Thrasher: Yeah, I think it depends on who you’re talking about. I don’t think it’s that big a deal if I’m working hard, I enjoy what I do and I do it ’cause I want to do more of it. So in that sense, there is a consumption aspect, but that’s not true for a lot of people. And so… Yeah, so then we have to ask what is driving this. I don’t know, it’s hard to say. We raise a couple of different possibilities in the book. The other part of it is just that people value their leisure in very different ways.

46:05 John Thrasher: So one thing that we talk about in the book is that people do tend to value leisure that is available together, so people don’t like to have Tuesdays off, right, if everybody else has Saturday and Sunday off because then they can’t do anything with other people. And that’s true across the board in a lot of ways, but it’s also true that some people don’t value that additional leisure time to the same extent, they’d rather work more, and so… There’s a lot different things that we talk about in the book, but one thing that, certainly my kind of view on this is that any way that you can kind of… Any way that individuals and families can kind of make those judgments in a clear way, that is when they have more flexibility whether to work more or not, and whether they can kind of judge what the relevant trade‐​offs are, that’s when you’re going to see people getting the most benefit from that arrangement.

47:00 John Thrasher: So I guess what I’d say is more flexible arrangements are good, and this is why, although I understand why people are attracted to the older modes of industrial organization and the benefits that might have come from that, the real drawback is flexibility. So flexibility with time, but also just with whether you want to work more or not, typically there’s a set number of hours you have to work, and a lot of these kind of jobs and you don’t have a lot, and deal with… One of the real benefits of being an academic is we have a lot of flexible time arrangements, we can work when we want for the most part, and that’s great if you have a family or if you want to travel or whatever it might be, and I wish more people had options along those lines. But you might find if that were the case, that some people would work less, but some people would probably work more, but at least you would know that that was their kind of trade‐​off with leisure and money or value or whatever it is, rather than something that is a vestige of the 40‐​hour work week or the 60‐​hour work or whatever it might happen to be.

48:08 Aaron Powell: What about the worry that capitalism is at its core about consumption, it’s about making things and then wanting, convincing other people to want to consume those things, and that this will lead us to, if there’s no check against this, and so capitalism will ultimately lead to us consuming the planet or at least all of its resources.

48:30 John Thrasher: So we discuss the question about the environment and the planet in one of the later chapters in the book, and we have a lot to say about that. Start with just the basic question about consumption there, ’cause I’ve had this put in a lot of different ways in terms of going back to even the earliest, some the earliest critics of not just capitalism, but kind of emerging markets, like Jean‐​Jacques Rousseau, who was very concerned that it wasn’t just that we were consuming too much, but that we would be driven to consume and to behave in various ways merely in reflection of other people, that is to kind of appear better than them or… In a kind of arms race, a status arms race or whatever it might be.

49:09 John Thrasher: And you hear this a lot, it’s kind of a keeping up with the Joneses type thing, and we have a chapter on this as well in the book. And so one thing I would say is this characteristic of capitalism, is this psychology characteristic of capitalism, and I would say no, this is a human characteristic. Now, capitalism may kind of feed it in some ways, because one of the characteristics of capitalism is what we call consumer sovereignty, which is that basically what goods and services get produced are determined primarily by consumers. So if you have this kind of natural feature of human psychology, but then it’s kind of super‐​charged by a system that basically caters to it, well, then, yeah, you might probably get more of this thing in terms of the consumption aspects of it.

49:51 John Thrasher: Whether or not it’s good or bad I think really depends a lot on the context, but I do think that you can very easily criticize these things psychologically, and from a point of view of living a good life while still being totally open to the market providing new services in various ways. If people stop demanding them, of course they’ll stop being produced. Now, whether or not there’s some limit to that in terms of what the planet can sustain, I think the evidence that we looked at and that I’ve seen suggests that, if anything, more advanced capitalist societies are better at providing that stuff, given their resources, that is, they’re more efficient. So now, whether or not there would be some upper limit of that, that’s certainly a possibility, but I don’t think we’re within the reach of that at any time soon.

50:38 Trevor Burrus: In the course of this episode, we’ve discussed a lot of these classic criticisms of capitalism, which your reaction to them have been, you don’t seem to be putting your foot down and saying that capitalism is so obviously correct, like maybe like a Rothbardian and these other concerns are not really big concerns, you regard a lot of them as genuine concerns, so in that light, if you are someone who wants to sort of talk about capitalism and talk about it in a constructive fashion, what tips do you have for the way people should communicate about this, if they’re friendly to capitalism, and even if they’re not, and just having a constructive conversation about how to compare these various systems?

51:18 John Thrasher: I’d say two things. The first is that I think of capitalism as one of the great inventions of all time, so probably up there with the light bulb, the wheel, the internal combustion engine, maybe more than some of these, but like those other inventions, they’re incredibly important for human development and for human flourishing, but they also have a lot of downsides to them too, they’re not obviously overweighed in every aspect by the benefits. And so one of the things I would say for being constructive about it is seeing the good and bad things that come along with this. And just like you think about the way the car… Once we introduced cars, they give us a lot of freedom, but they also create pollution, they create traffic jams, and they allow us to live far away from our families, and those kind of things that maybe has good aspects, but also bad; similarly with capitalism. And so I would say the starting point is for having a productive conversation is thinking about the things that you don’t like, trying to identify whether or not they are essential aspects of capitalism, whether they’re accidental aspects of capitalism or whether they’re not aspects of capitalism at all.

52:30 John Thrasher: And then if they are clearly related, then thinking about ways that they might be alleviated or improved, either by advancing technology or more efficient means of production or whatever it might be, or through political or normative changes. And so I guess just thinking about this in this kind of wide range of possibilities, one of the other things we talk about in the book is that from our point of view, capitalism… There’s a lot of different ways to do it, you can do it the way that Denmark does it. You can do it the way the United States does it, the way Australia does it, or Germany or any other number of ways, and so to think… There’s not just one way to be capitalist, either historically or kind of philosophically. So I guess one thing I would say to people is just think about this, the possibilities, your horizons are much broader than you probably imagine that they are, and capitalism can do both a lot of really good things and has probably some flaws too that need to be dealt with in various ways and try to think through what those are, is really the key of the project in our mind.


53:49 Aaron Powell: Thank you for listening. If you enjoy Free Thoughts, make sure to rate and review us in Apple Podcasts or in your favorite podcast app. Free Thoughts is produced by Landry Ayres. If you’d like to learn more about libertarianism, visit us on the web at https://​www​.lib​er​tar​i​an​ism​.org.