Capitalists and Capitalism (from the archives of Language Isn't Logical)

As Bryan Caplan once said, the reason that economists quote Adam Smith on the baker, butcher and brewer over and over again is that people don't get it. This inability to understand the point is not all that surprising: one person's self-interest bringing about another's welfare is counterintuitive, probably because in many situations one person's self-interest brings about another person's misery.

Likewise, people fond of market solutions often complain that others think they (the people fond of market solutions) are big fans of big business, which they're typically not. Also, it is commonly believed that businessmen and -women are huge supporters of the free market; common observation suggests that instead they like lots of protection for themselves (which is just what you would expect if you assumed they act out of rational self-interest). I just developed a very simple hypothesis about why this belief is so common when it is so obviously false. I did so while reading a post by Shamus Khan. I'll get back to the point after a short detour.

Khan isn't happy about the recent reverence extendet to Steve Jobs. When that's the general direction your post is going, I'm almost certain to like it, but of course Khan, a U.S. conservative's caricature of a lefty, manages to blow it. Khan has multifaceted beef with Jobs, but most of it is related to manufacturing:

Manufacturing was exported to China, where minimal worker and environmental regulations meant that production processes could employ techniques that were effectively sweatshop-like and at times deployed child labor — leading to the mass suicides and suicide attempts within workplaces as well as the unnecessary poisoning of countless workers. And Apple has had one of the worst environmental records — both in terms of the production process and their products themselves.

Some of the worker poisonings were the product of a decision to use N-hexane instead of alcohol to clean products in the production process. While alcohol is relatively safe, N-hexane is known to damage the central nervous system. But it’s a faster cleaning process. So Jobs and those at Apple decided to use it. Long before these poisonings were made public, Jobs was made aware of them. And he didn’t really care until it became a PR problem. The same can be said of the environmental problems of the production process and the products themselves.

Does Khan offer good reasons for not buying Apple products? Well, I, for one, don't have to think about this, because I'm not considering buying any. Nor have I ever. You would think the same is true of Khan. Is it?

I presently own three Macs and an iPhone (I’m actually on my 3rd such phone, and have owned other Macs in the past). I bought my mother an iPad2 for her birthday this year.

Which leads me to conclude that maybe Khan doesn't care all that much about the exploited Chinese workers after all. It's called "revealed preferences".

As for the main point, consider this bit:

He [Jobs] was also a capitalist, par excellence.

Marx called the capitalists capitalists (Kapitalisten) as they were the ones who had and used the capital. He called capitalism capitalism (Kapitalismus) because in this mode of organizing the economy, capital is the most important resource (at least that's what Marx thought). That both makes sense. But it can easily lead to misunderstandings. Think about it:

Socialists: those who like socialism
Racists: those who like racism
Segregationists: those who like segregation
Capitalists: HONK!

Contra Marx*, symbols matter. Now, it's not as though I think this is the only reason for the common fallacy of thinking that entrepreneurs like free markets and free marketers like entrepreneurs, but I do submit it makes a nontrivial contribution.

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*Or perhaps that's just my simplified understanding of Marx's views? My knowledge of his work is not deep enough to know for sure.