Contrary to the looseness with which the term “capitalism” is often employed, capitalism is not a primarily economic system in which the political particulars are negotiable. It is, as Ayn Rand defined it, “[a] social system based on the recognition of individual rights, including property rights, in which all property is privately owned. [Emphasis mine.]” Note that she describes it as a “social system”, rather than a political system or an economic system. It is both of these, but it is in the unity between them that capitalism arises. As another philosopher, Leonard Peikoff puts it, “Politics is to economics as mind is to body.”
Unlike socialism, however, capitalism is a very precise political concept that demands a strict adherence to a certain set of principles. It has no variants. There exists only true laissez faire capitalism, a mixed economy, or some variety of statism. This fact is natural enough if we stop to think of it: there are a million ways to violate a man’s rights but only one way to respect them. As I wrote in an article from June of 2012, “Political Capitalism,”
The nature of capitalism… calls for a very specific kind of government and a very specific set of governmental policies… There is only one kind of capitalist government: a constitutional republic that holds a monopoly on retaliatory force and wields it to institute justice to remedy injuries of individual rights.
(For a fuller discussion of why capitalism necessitates a republican form of government, I will direct readers to my article from May of 2012, “Republican Necessity.”)
Those are the abstract principles behind capitalism. To be implemented, however, a capitalist government must take a concrete, not an abstract, form; that is, it must consist of a particular set of institutions guided by a particular set of laws. This is not to say that the laws must be so specific that there must be one law banning murder by strangulation, one banning murder by firearms, one banning murder by beating, etc., but it does mean that there should exist a single law banning murder and that its form must adhere to certain conditions in order to achieve its purpose. It must be clear and objectively interpretable, and while such a law may employ any wording that fulfills those conditions, it must ultimately use one of them.
The same is true for the institutions of which a capitalist republic consists. There could be a number of ways to structure a capitalist republic. Provided that each falls within the realm of capitalist principles, deciding between them is ultimately a matter of which form will best fit the particulars of the territory that the government serves. For example, a large nation like the United States would benefit from a federalist hierarchy with different levels of government, each with different spheres of authority, while a city-state like Singapore is sufficiently small to not necessitate such a division and to even make a federalist system cumbersome and inefficient. The scope of this essay will not allow me to delve into even a fraction of the concrete forms that a capitalist republic may take, so instead I will examine but one political institution – the legislature – and whether or not it has a place under capitalism.
The answer is dubious. After all, the chief function of a legislature is legislation, but if the laws have been sufficiently changed to prohibit all violations of individual rights and to provide remedy for those violations, then that function would effectively be null. Let us indulge for a moment the distant ideal of having created a legal codex that effectively protects every valid individual right against violation by either government or domestic criminals. From the moment that a state’s laws have achieved such perfection onward, the chief functions of government would belong, as Ayn Rand correctly noted, to the police, the military, and the courts. Those are the bodies that will execute the law and adjudge disputes using the law as an objective standard. Certainly, a standing legislature without any business to conduct will invariably invent for itself an issue warranting a legislative solution, regardless if such an issue actually exists or even falls within the purview of the legislature’s constitutional scope. This phenomenon is best embodied by a quip from American novelist and satirist Mark Twain, “No man’s life, liberty, or property are safe while the legislature is in session.”
The question is not, however, whether legislatures will play a prominent role in a capitalist government or even whether they should be permanently standing. Those two considerations are important, but they are not the fundamental issue at hand. Rather, the question ought to be, “Is there an essential function of a capitalist government that should, in some circumstances, be performed by a legislature?” After all, only those functions that are essential to a capitalist government should be performed in the first place. I say “in some circumstances” simply as an acknowledgment of the fact that such functions, though essential to a capitalist government, could potentially be handled by other means. Deciding between such means is a matter of determining which one best executes the function in question.
As a starting point, take the essential role played by the armed forces. Whether the police or the military, the function of the armed forces under a capitalist government is to protect a country’s citizenry and to execute the law, which means ensuring that those who violate the rights of anyone under their jurisdiction, or who attempt to do so, are brought to justice. The armed forces would be, first and foremost, accountable to the law, but it is a longstanding principle of republican governments that accountability without a mechanism to enforce it is not only ineffective, but actually pernicious to the very principles underlying the government: the rights of the individual and the rule of law protecting them. When those enforcing the law are the same as those who evaluate the quality of their job performance and their fidelity to the law, corruption ceases to be merely a possibility and instead becomes an inseparable aspect of the executive branch at all its levels.
Such is why the armed forces are overseen by civilian leadership – in the case of the military, the Secretary of Defense and the President of the United States. Those two positions are, in turn, overseen by Congress, which retains the power of impeachment for both individuals. If they demonstrate themselves to be sufficiently corrupt or incompetent in fulfilling the obligations of their posts, they may be removed from office. If they are competent, however, then they will discharge anyone beneath them who is not.
Here, the legislature plays the role of watchdog over the execution of the laws that it has created. Unlike military officials whose jobs are not subject to the public’s vote, the civilian leadership does answer directly to their constituents. Even the Secretary of Defense, an appointed official, answers to the voting public, as the voting public is perfectly at liberty to vote out legislators who do not address his incompetence or corruption in favor of others more willing to impeach him.
Moreover, there is inherent reason in removing the executive’s ability to unilaterally use the sword granted to it. This is but an extension of the necessity for rational oversight over the armed forces. The President may possess full command over the military, but he may not utilize that authority without the prior consent of the legislature in a declaration of war – a necessary check to ensure that the armed forces are only used to protect individual rights rather than to injure them. The same principle can be expanded to a state legislature’s management of local police forces or the governor’s use of the state’s National Guard.
Corollary to the power to declare war, there exists a need to decide upon the terms concluding a war – that is, the signing and ratification of treaties. Naturally, treaties serve a number of functions beyond ending wars, each of which is a necessary function for any sovereign state. In the same way that the executive branch, taken as a whole, should not be the sole determiner of its own job performance under the law, so too should it not be the sole determiner when creating mutual laws – and treaties are precisely that – with other nations. The role of negotiating with other foreign states and representing a nation abroad is best served by a few individuals than by a few hundred, but it should nevertheless be those most directly tied to the interests of a nation’s citizenry who determine whether an agreement such as a treaty legitimately furthers the individual rights of the citizenry. Moreover, treaties being laws, it is fundamentally ill-advised to place the power to create them in the same hands that will execute them. While the President and the Secretary of State may work diligently to construct a treaty with another state, for example, it should nevertheless be the federal legislature that ratifies such actions.
Apart from monitoring and checking the actions of the executive and, to a lesser extent, the judiciary, there remains the matter of filling positions within the other two branches – positions that are necessary and proper for capitalist governments. The fact of the matter is that, even in capitalist republics, there will be some government positions for which the public is not qualified to (or simply should not) vote. The Secretary of Defense has already been mentioned, but this point should be expanded to include all the judgeships – state and federal – in our nation’s judiciary. Our Founding Fathers were right to grant all the independence that sound judgment needs to the federal judiciary (though many states have not been so clear-sighted), making judgeships lifetime appointments, not subject to the public vote. Given that these positions are permanent, however, filling them reasonably requires an extra level of scrutiny – the kind of scrutiny of which a legislature is capable.
Regardless of whether a legislature is the best to fill those positions (confirming appointments made by the President, in the Constitution’s current form), such positions must be filled regardless. Much in the same way that oversight of the armed forces is necessary for capitalist governments, so too is filling the positions in the judiciary. It is essential, or else there would be no judiciary to speak of and, consequently, no objective remedy for violations of individual rights. That essential function could be carried out in a number of ways, but the trial of near two hundred thirty years has provided ample reason to believe that a legislature is best suited for the role. After all, were the average voter required to sufficiently research and vet every candidate for every judicial position (or even the few legitimate bureaucratic ones) that needs to be filled, he would be hard-pressed to do so while also carrying on his daily life. Rather, it makes more sense for him to elect, in periodic intervals, but a few individuals to serve as his agents for that task. This is the role of the legislature in filling government positions.
Though all these powers are considerable, there is one more power that ought unquestionably to belong to a legislature: the correction of flawed laws. While I still speak under the assumption that the laws under a hypothetical capitalist republic are perfect, there nevertheless remains that possibility that the judgment of a justice or appellate judge can be flawed. This flawed judgment can lead to an errant interpretation of the law that necessitates an occasional change in the law. These modifications should be so infrequent and so minor that a small committee within the legislature ought to be able to handle such matters independently, essentially using the full legislature only as an editor that will approve the final versions, erasing ambiguity and – to the extent that the legislature is able – correcting the errant interpretations from the judiciary.
Yet even with all these functions to perform, there is little reason that a capitalist legislature should convene in perpetuity. As Twain noted, the dangers of a standing legislature are apparent, and it is best to return the legislators to their private occupations except when convening the legislature is absolutely essential. The acts of declaring war and of affirming treaties are such rare occurrences that special sessions called either by the chief executive or by legislative leadership would allow those obligations to be performed if and as they arise. The same applies to the filling of important executive and judicial positions upon sudden, unexpected vacancies, while the bulk of positions (the numbers of which would be severely diminished in a rational government) could be filled in the short span of a month of regular session. The same month could serve as a sort of “annual job performance review” in which various committees within the legislature conduct oversight hearings to ensure that the other branches are fulfilling the obligations of their posts. Again, in the case of sudden, unexpected need for immediate remediation (such as a scandal released by the press), then a special session of the legislature would be sufficient for that purpose.
Ideally, the length of any regular legislative session would be so severely limited under the Constitution that legislators would have no idle time whatsoever. They would be capable of fulfilling only those most essential functions, providing them too little time to so much as think of doing otherwise. Further, any special sessions would have to be extremely limited in scope such that any venture outside of that scope would be constitutionally null and void.
Does this necessarily conflict with Rand’s assertion that a capitalist government would primarily consist of the military, the police, and the courts? Not in any fundamental manner, especially when one considers that the “legislature” described above is hardly a legislature at all, given that the act of legislation would be perhaps one of its smallest and most incidental functions. In reality, a legislature in a capitalist government would serve more as a “board of directors” for the corporation that is the state, selected by that corporation’s shareholders (the voters) to represent their interests and ensure that the state runs smoothly, effectively, and in accordance with its own rules. The bulk of the operations would be happening several floors below in those three departments that Rand identifies, but the legislators are nevertheless the overseers of the entire state and the most immediately responsive to the voices of their constituents (especially if, due to the brevity of the session, they were compelled to face their constituents for more than a few weeks a year).
Granted, there is no system that can protect against the corruption of the citizenry itself. A philosophically decadent populace will necessarily produce a poor state, no matter how finely crafted those institutions may be. Even so, there is no rational population that does not need safeguards in place to ensure that they are not betrayed by the state that they have created. It is essential that a population, guided by a rational philosophy, be capable of removing from power those who irresponsibly wield the monopoly of force that belongs to the state, while also being careful not to unnecessarily handicap the effectiveness of the state in its proper scope. Perhaps there are other ways in which this could be done than in the manner described above — that is, vesting those powers in a legislature of sorts. I welcome such suggestions. There is, however, much to be said for the Madisonian model that has functioned rather well even against over a hundred years of philosophical degradation. If properly limited and considerably restricted into a capitalist format, there is ample reason to believe that such a model would serve us as well in the future as it has through history.