Capital As a Form of Charity

Tools as a Form of Charity Both fact and logic seem to me to support the view that savings invested in privately owned economic tools of production amount to an act of charity. And further, I believe it to be – as a type – the greatest economic charity of all.
By economic tools of production I mean, of course, things with exchange value – trucks, factories, railroads, stores – which assist human effort in the production of other items of economic worth.
Does saving and investment in these tools qualify as charity? Does it meet the three tests of an act of charity?
The first test is whether there has been a transfer of privately owned things having economic worth. It is true that when one saves and invests in a tool which he uses in production, although he retains title to the tool, most of the extra production which the tool makes possible passes on to others, as we shall see. For that reason the first requisite of an act of charity seems to be met as a certain consequence of saving and investment in tools. It is this feature of the creation of privately owned capital which is its charitable aspect.
The second test of charity is that the transfer of economic benefits shall be voluntary. Did anybody steal anything? Was anybody coerced? So long as the tools are privately owned and their use functions in a free market, the process has to be voluntary for everybody involved. But state ownership or control of tools, as is common in Russia, violates this requirement.

This post was published at Ludwig von Mises Institute on November 13, 2017.