This is an open access article from the European Journal of the History of Economic Thought.
The name “capitalism” derives from Marx’s false analogy between medieval land ownership and the “ownership of the means of production.” However, unlike medieval land, capital goods can be rented out, e.g., by Frank Knight’s entrepreneur, and then the capital owner does not hold those management or product rights. What then is the characteristic institution in our civilization? It is the voluntary renting of workers. What then is the relationship between Classical Liberalism, the dominant philosophy behind Economics, and a lifetime labor contract? Frank Knight had plenty to say against the doctrine of inalienable rights which disallows such contracts.
Is “Capitalism” a Misnomer? On Marx’s “capitalism” and Knight’s “civilization”
Reclaiming Democratic Classical Liberalism
The argument shows that the classical liberal endorsement of sovereign individuals acting in the marketplace generalizes to the joint action of individuals as the principals in their own organizations and associations.
Does Classical Liberalism Imply Democracy?
This paper, written for a classical liberal audience, goes into the fault line running down the middle of the doctrine: does classical liberalism imply democracy? The libertarian wing, represented concretely today in the startup or charter cities initiatives, only requires consent (and exit) so the consent could be to a non-democratic pact of subjection. The democratic form of classical liberalism is represented by the mature James M. Buchanan who held that a liberal social order required people to be principals in their organizations who could only delegate but not alienate their rights of self-governance. That distinction is traced back to the Reformation inalienability of conscience that descends through the Enlightenment to modern times in the abolitionist and democratic movements.