The Case for Capitalism

A Modern Miracle We Take for Granted

The lecture begins with a reflection on how modern technology and travel are everyday miracles.
Watching movies at 30,000 feet or working on a laptop mid-air would have seemed impossible just decades ago.
Compared to 250 years ago, life today is incomprehensibly rich—most people then were subsistence farmers who never left their villages.

“Even the poorest among us has things the richest person 250 years ago didn’t have—running water, electricity, Wi-Fi.”

Over the past 250 years, global wealth and income have skyrocketed.
This phenomenon is called “The Great Enrichment” by Deirdre McCloskey.
Life expectancy, standard of living, and access to basic goods have all improved dramatically.
Before this, human history was mostly stagnation—centuries of no meaningful growth.

The answer: Capitalism.
Not just an economic system, but a philosophical and political transformation.
A change in ideas, especially the belief in:
Freedom
Individual rights
Reason
Limited government

“The true driver was not just technology or trade, but the liberation of the human mind and spirit.”

Three key events happened in 1776:

Commercialization of the Steam Engine – fueling the Industrial Revolution.
Publication of Adam Smith’s The Wealth of Nations – first clear articulation of free markets and division of labor.
Founding of the United States of America – the first nation built on Enlightenment values and individual rights.

The Greek philosophers, especially Aristotle, emphasized human reason as our unique survival tool.
During the Renaissance, these ideas were rediscovered—leading to advancements in science, art, and technology.
The Enlightenment (17th–18th century) built on this:
People began believing they could use reason to understand truth and direct their own lives.

Historically, people had no freedom—careers, marriages, and beliefs were dictated by authorities.
The Enlightenment introduced a radical idea: individuals should be free to choose.
This led to the rise of individualism and the concept of individual rights.

“Capitalism is built on this Enlightenment idea: the individual is an end in himself.”

Property rights are essential:
You mix your labor and mind with the land or product → it becomes yours.
This idea, traced to John Locke and expanded by Ayn Rand, underpins civilization and economic progress.
Cultures without a concept of property rights remained primitive and stagnant.

“Without property rights, progress is impossible.”

Capitalism is more than economics—it is a moral, political, and social system grounded in freedom.

Definition (Ayn Rand):

“Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned.”

The term capitalism was first used by critics who focused only on money, not freedom.
Karl Marx acknowledged capitalism’s productive success, but failed to see its roots in reason and rights.

“Capitalism unleashes human creativity—not through command, but through freedom.”

Capitalism emerged in a specific intellectual and political context: post-Enlightenment Europe and early America.
It is grounded in:
Reason as humanity’s tool for survival
Individual rights as the moral basis for freedom
Private property as the foundation of productivity and progress
It is not just economics—it is a social system that allows humans to flourish.

Future lectures will cover:

“Let’s see what happens when we leave people free.”