Why So Many People Hate the Rich
Why are businessmen and capitalism so often vilified? Fifty years ago, Ludwig von Mises had the answer already.
From the fierce condemnations of Wall Street bankers to charges of the Koch brothers and other wealthy industrialists conspiring to bust unions, a single theme resonates throughout the left’s anticapitalists rhetoric — the notion that an elite of businessmen is purposefully keeping the working man poor and powerless. This is a fantasy. But where does it come from?
In The Anti-Capitalist Mentality (1956) economist Ludwig von Mises explained how in a free society, everyone starts at the same point. Leftists like to cite people as the Koch brothers who inherited wealth but in truth, the vast majority of businessmen are self-made men. Even the brothers Koch, who inherited a company from their father, vastly expanded that company and build their own fortunes.
The supposed maldistribution of wealth that characterizes a capitalist society is actually the fair outcome of honest competition. Entrepreneurs and professionals who work hard and innovate prosper whereas people of limited ability remain poor.
It is difficult for a man to accept that he is inadequate; that there are people more successful than himself. It is why, according to Van Mises, in order to console himself, he searches for a scapegoat.
He tries to persuade himself that he failed through no fault of his own. He is at least as brilliant, efficient and industrious as those who outshine him. Unfortunately this nefarious social order of ours does not accord the prizes to the most meritorious men; it crowns the dishonest unscrupulous scoundrel, the swindler, the exploiter, the “rugged individualist.”
Their fanaticism in defending their critique of capitalism is precisely due to the fact that they are fighting their own awareness of its falsity.
People who don’t understand economics — or who simply refuse to ever contemplate it — tend to take the world for granted. “As they see it, the unprecedented technological improvements of the last two hundred years were not caused or furthered by the economic policies of the age.” Rather factories and cars and the luxuries of Western life are considered by them little different from natural phenomena. They have always been there during their lifetimes, after all, and it is nigh impossible to think of life without them.
Fate has determined that he should enjoy amenities which were denied even to the most prosperous people of earlier generations and are still denied to non-Americans. It does not occur to him that the “rugged individualist” of big business may have played some role in the emergence of what he calls the “American way of life.”
Instead those industrialist and businessmen are denounced as the worst exploiters of the common man. Politicians, labor leaders and intellectuals all profess to know that if left free to produce and trade at will, capitalists will usurp the masses and condemn them to a desperate state.
They fail to realize that the characteristic mark of big business is mass production for the satisfaction of the needs of the masses. Under capitalism the workers themselves, directly or indirectly, are the main consumers of all those things that the factories are turning out.
Critics usually level two charges against capitalism. First, they pretend that the possession of cars, television sets and other luxury consumer goods does not make people happy. Second, they complain that there are still people who have either too few or none of these gadgets.
Indeed the evil businessman may possess far more luxuries: mansions, yachts, private airplanes. It is despicable, the anticapitalists complain, that people should be so rich while others are so poor. So they argue that government has to rein in such wealth and impose “social justice.” What they really mean, notes Von Mises, is to give to the frustrated mediocrity “according to his needs.”