Among those on the left, this biased mindset against capitalism is obvious. However, even everyday individuals -- the infamous middle class, independent American voters -- are suspicious of capitalism and capitalists. The prevailing viewpoint is that capitalism is inherently immoral and must be bridled by government lest greed and ruthless profiteering impoverish us all. Even some "conservatives" regard capitalism as a necessary evil, a wondrous horn of plenty that supplies us all with prosperity provided its baser instincts are held in check by stern, Christian moral codes, again, enforced by government.
Ludwig von Mises wrote extensively about this in his book The Anti-Capitalist Mentality. As Mises explains it, the anti-capitalist bias stems in large part from ignorance of economics. The average American, whether blue collar, white collar or even an entrepreneur, does not understand the crucial role that free market economics and capital accumulation play in creating prosperity.
The emergence of economics as a new branch of knowledge was one of the most portentous events in the history of mankind. In paving the way for private capitalistic enterprise it transformed within a few generations all human affairs more radically than the preceding ten thousand years had done. From the day of their birth to the day of their demise, the denizens of a capitalistic country are every minute benefited by the marvelous achievements of the capitalistic ways of thinking and acting.
The most amazing thing concerning the unprecedented change in earthly conditions brought about by capitalism is the fact that it was accomplished by a small number of authors and a hardly greater number of statesmen who had assimilated their teachings. Not only the sluggish masses but also most of the businessmen who, by their trading, made the laissez-faire principles effective failed to comprehend the essential features of their operation. Even in the heyday of liberalism only a few people had a full grasp of the functioning of the market economy. Western civilization adopted capitalism upon recommendation on the part of a small élite.
The terms capitalism, capital, and capitalists were employed by Marx and are today employed by most people—also by the official propaganda agencies of the United States government—with an opprobrious connotation. Yet these words pertinently point toward the main factor whose operation produced all the marvelous achievements of the last two hundred years: the unprecedented improvement of the average standard of living for a continually increasing population. What distinguishes modern industrial conditions in the capitalistic countries from those of the precapitalistic ages as well as from those prevailing today in the so‑called underdeveloped countries is the amount of the supply of capital. No technological improvement can be put to work if the capital required has not previously been accumulated by saving.
Saving—capital accumulation—is the agency that has transformed step by step the awkward search for food on the part of savage cave dwellers into the modern ways of industry. The pacemakers of this evolution were the ideas that created the institutional framework within which capital accumulation was rendered safe by the principle of private ownership of the means of production. Every step forward on the way toward prosperity is the effect of saving. The most ingenious technological inventions would be practically useless if the capital goods required for their utilization had not been accumulated by saving.
Mises also reminds us that capitalism -- the private ownership of the means of production -- would be impossible without the societal institutions of equality under the law and private property. When property became sacrosanct all individuals could save, could accumulate capital, without fear that those savings would be seized by the king. Ironically, these very principles of equality under the law and private property are under attack today in the United States. As these attacks succeed, the result is diminished incentive to save, capital consumption and an inexorable tendency towards general impoverishment.
In America today the "rich" are treated differently under the law than other Americans. Their income is taxed at confiscatory rates. The government yearns to tax their income off of savings and investments at confiscatory rates as well. Generally, the American public supports the government's yearning. In this country "rich" is a four letter word. The average American only respects capitalists like Warren Buffet who are guilty about their success and are willing to selflessly share it with their secretaries. On the other hand, the public despises retired, capitalist robber barons like Mitt Romney who live in luxury by doing "nothing," i.e., cashing interest and dividend checks. The public never realizes that it is savings and investments that provide the capital which results in its own prosperity. The doltish public doesn't understand that if each "rich" man held all of his savings in his wall safe instead of in stocks and bonds, we would all be the poorer for it.
Setting aside economics, Mises also explored the psychological basis of this American anti-capitalist mentality. He recognized that in our competitive capitalistic society the bias against capitalism is rooted in envy, humiliation and the fear of failure.
It is quite another thing under capitalism. Here everybody’s station in life depends on his own doing. Everybody whose ambitions have not been fully gratified knows very well that he has missed chances, that he has been tried and found wanting by his fellowman. If his wife upbraids him: “Why do you make only eighty dollars a week? If you were as smart as your former pal, Paul, you would be a foreman and I would enjoy a better life,” he becomes conscious of his own inferiority and feels humiliated.
The much talked about sternness of capitalism consists in the fact that it handles everybody according to his contribution to the well-being of his fellowmen. The sway of the principle, to each according to his accomplishments, does not allow of any excuse for personal shortcomings. Everybody knows very well that there are people like himself who succeeded where he himself failed. Everybody knows that many of those whom he envies are self-made men who started from the same point from which he himself started. And, much worse, he knows that all other people know it too. He reads in the eyes of his wife and his children the silent reproach: “Why have you not been smarter?” He sees how people admire those who have been more successful than he and look with contempt or with pity on his failure.
What makes many feel unhappy under capitalism is the fact that capitalism grants to each the opportunity to attain the most desirable positions which, of course, can only be attained by a few. Whatever a man may have gained for himself, it is mostly a mere fraction of what his ambition has impelled him to win. There are always before his eyes people who have succeeded where he failed. There are fellows who have outstripped him and against whom he nurtures, in his subconsciousness, inferiority complexes. Such is the attitude of the tramp against the man with a regular job, the factory hand against the foreman, the executive against the vice-president, the vice-president against the company’s president, the man who is worth three hundred thou-sand dollars against the millionaire and so on. Everybody’s self-reliance and moral equilibrium are undermined by the spectacle of those who have given proof of greater abilities and capacities. Everybody is aware of his own defeat and insufficiency.
Mitt Romney is a very rich, artistocratic man running for President. As a result, Mitt is at a severe disadvantage: the average American voter hates his guts. But Romney is far from an innocent victim of this unreasonable hatred. He faces an additional problem of his own creation: his aristocratic lifestyle. Mises describes this problem as follows:
If a group of people secludes itself from the rest of the nation, especially also from its intellectual leaders, in the way American “socialites” do, they unavoidably become the target of rather hostile criticisms on the part of those whom they keep out of their own circles. The exclusivism practiced by the American rich has made them in a certain sense outcasts. They may take a vain pride in their own distinction. What they fail to see is that their self-chosen segregation isolates them and kindles animosities which make the intellectuals inclined to favor anti-capitalistic policies.
Average Americans rightly despise aristocrats. Many immigrants came to America to escape the rigid European system of caste and class. They yearned for a socioeconomic system wherein wealth was earned instead of inherited, and success was based on achievement rather than bloodlines and state favoritism.
The problem is our American aristocracy has become tainted by the stench of caste and class as well. We can no longer assume that the "rich" in this country came by their wealth honestly. A good many American aristocrats became "rich" solely because of political favoritism. These individuals are not free market capitalists in the Misean sense. They are merely cronies of big government, the favored recipients of governmental subsidies, grants, protective rules, regulations and legal status. Many are tagged with the special governmental imprimatur of "too big to fail."
How many bankers and Wall Street financiers are "rich" because of their free market prowess? How many are "rich" because of their incestuous relationship with Washington power?
Once these individuals become "rich" they choose to ensconce themselves with their "rich" brethren, far removed from the great unwashed. They hole up in huge mansions in gated enclaves of high society and ostentation. Rightly or wrongly, the public regards all the residents of such enclaves as the privileged aristocracy.
This is the problem Mitt Romney faces when he attempts to portray himself as one of us. The truth is, he is not one of us. He has never been one of us. And by his own chosen lifestyle, he has exiled himself from us.
Whether Mitt Romney is an honest capitalist or a dishonest crony aristocrat is almost beside the point. The fact is he is wealthy and an ex-capitalist living in the lap luxury. That is enough for many of the anti-capitalist mentality to vote against him. Moreover, over his lifetime he has chosen to disavow the very individual on whom his political future now depends: the ordinary, middle class, American slug.
All I can say is: Good luck with that, Mitt.