Why capitalism needs to be governed

It is often said that Capitalism is the engine of democracy. This may be true. Capitalism is able to generate lots of goods and lots of profits. To the extent that democracy—or any system of living together with others—depends on goods and profits, then Capitalism fills the bill.

But since Capitalism is based on an act of force, as we showed last week, and since force is in itself unjust, it doesn’t make sense that Capitalism should accepted uncritically in society. The whole point of government, as Madison said, is justice. How can any activity rooted in injustice play a role in a just society?

As we saw earlier, the harmful effects of Capitalism’s basic injustice can be mitigated by decent people. So society could allow Capitalism to play a role, provided that its negative aspects were controlled. It would need strict oversight. Someone would have to watch and regulate the transactions of capitalists in order to prevent them from using the force inherent in the system to harm the workers, either intentionally or unintentionally.

If capitalism is the engine of democracy, it needs a governor.