Capitalism provides many with the opportunity to display initiative. While the rigidity of a status society enjoins on everybody the unvarying performance of routine and does not tolerate any deviation from traditional patterns of conduct, capitalism encourages the innovator. Profit is the prize of successful deviation from customary types of procedure; loss is the penalty of those who sluggishly cling to obsolete methods. The individual is free to show what he can do in a better way than other people.
However, this freedom of the individual is limited. It is an outcome of the democracy of the market and therefore depends on the appreciation of the individual’s achievements on the part of the sovereign consumers. What pays on the market is not the good performance as such, but the performance recognized as good by a sufficient number of customers. If the buying public is too dull to appreciate duly the worth of a product, however excellent, all the trouble and expense were spent in vain.
Capitalism is essentially a system of mass production for the satisfaction of the needs of the masses. It pours a horn of plenty upon the common man. It has raised the average standard of living to a height never dreamed of in earlier ages. It has made accessible to millions of people enjoyments which a few generations ago were only within the reach of a small elite.
This post was published at Ludwig von Mises Institute on 11/23/2017.