Capitalism: Frequently Asked Questions

| Theory | Practice | Suggested Reading |
"Laissez-faire, laissez-passer, le monde va de lui-meme."


There is no social system more rational, benevolent, or just than laissez-faire capitalism; no social system which can bring to man as much freedom, prosperity, and peace as laissez-faire capitalism; and ironically, even with socialism in its death throes all over the world, there is no social system which is still more misunderstood than laissez-faire capitalism. This ignorance has lead well-meaning people to believe that capitalism is the system of exploitation, monopoly, and class warfare. Yet without exception, all accusations that are made against capitalism rest upon a flawed moral theory or an economic fallacy, or in other words, to condemn capitalism is to misrepresent capitalism.

Most Americans realize the importance of the separation of church and state: the institution which leaves people free to form and act upon their own values without the threat of others imposing their own values upon them through aid of the government. What most people do not understand, however, is that the separation of economics and state -- laissez-faire capitalism -- is just as important for human prosperity as is the separation of church and state.

Put simply, the vast majority of mankind is wholly ignorant of the life-serving nature of capitalism and, as a consequence, ignorant of the solutions to modern day politico-economic problems. The purpose of the Capitalism FAQ is to help end the ignorance of capitalism, economics, and rational political philosophy that keeps so many from championing capitalism, by shedding some light in the true nature of capitalism and pointing the way to further education about capitalism (for all of the truths laid out in this FAQ have been established elsewhere by other authors). Many, if not all, of the answers to these questions will challenge some of the deepest assumptions about capitalism and politics that have been ingrained in our culture. Given the nature of the issues involved, however, a thorough answer to each question would have to be much longer, but a complete treatise on capitalism is beyond the scope and intent of this document. I strongly encourage readers to research the issues for themselves.


  1. What is capitalism?
  2. What is capitalism's essential nature?
  3. What are the philosophical underpinnings of capitalism?
  4. What is the role of government in a capitalist society?
  5. What does capitalism have to do with freedom?
  6. Is capitalism a just social system?
  7. What is a capitalist?
  8. How is democracy related to capitalism?
  9. What is the opposite of capitalism?
  10. Is socialism ideal?
  11. Who are the defenders of capitalism?
  12. How is theory related to practice?


  1. Aren't coercive monopolies a natural product of laissez-faire capitalism?
  2. Doesn't unregulated capitalism lead to worker exploitation?
  3. Wouldn't unregulated capitalism encourage unsafe products and services?
  4. Is the United States of America a capitalist nation?
  5. Doesn't capitalism promote racism?
  6. What would happen to the poor without the welfare state?
  7. Isn't the government necessary to stop pollution and industrial waste?
  8. Shouldn't the state provide public education?
  9. Shouldn't the government provide a minimum wage?
  10. Doesn't the government have to regulate medical products?
  11. Isn't capitalism like Social Darwinism?
Appendix: Suggested Reading on Capitalism 
I would like to thank the following intellectuals for providing the ideas upon which this FAQ is based on -- Ayn Rand, Ludwig von Mises, George Reisman, Henry Hazlitt, Nathaniel Branden, Paul L. Poirot, Leonard Peikoff, and Harry Binswanger. The originality of this FAQ does not lie in its content, but rather in its form, presentation, and location (the WWW).  However, I am not a spokesman for any of these thinkers, nor anyone- except myself. And I would like to especially thank Scott Powell for writing questions #9 and #11 in Theory.
Being consistent with the principles of capitalism, freedom, and individual rights, this page supports free speech on the internet.