Words Matter in the Public Discourse

Those of us who love free speech are very tired indeed of the political correctness pushed by the thought police. That said, however, there are some key words that are still clanking around our public discourse that can foster serious misunderstandings.

For example, people often talk about the merits of “capitalism,” but Adam Smith did not use that word. It is better to talk about the “market system,” which means a system based on the free exchange of goods for a price that changes with changes in supply and demand. “Capitalism” was used perjoratively by Karl Marx to describe a rich person who uses his money to exploit others for profit. The problem is that under that definition slavery and theft could also be a form of “capitalism.” But they are clearly not within the “market system” as we have defined it.

As another example, people often talk about “evolution,” but Charles Darwin did not use that word. Darwin posited the theory of “natural selection,” which means that as the circumstances change, some species will do better than others. We also know this from the “creative destruction” of some businesses in an economy posited by Joseph Schumpeter and from our own personal experiences with the labor market. “Evolution” sounds like there is some intentionality behind the mutation of species to adapt to their environment. That is not what Darwin was saying.

Another example is the word “Keynesianism,” which is used today to validate all manner of government spending and intervention. In fact, by today’s standards Keynes might be considered a conservative. He believed that job losses were caused by over-taxation of businesses. He believed that the devaluation of a currency was subversive. If he argued for government spending, it was to be a temporary remedy for inadequate aggregate demand, not a policy of running permanent deficits.

And then there is the word “socialism.” At one point it meant pretty much the same thing as “communism,” which is that the means of production would be owned or controlled by the government. Today, for some people, it just means “fairness” and “caring for others.” In other words, it is meaningless.

This is not a matter of being pedantic. If we don’t use words precisely, we will end up talking past each other. Not that that hasn’t already happened.

The author works for the State of Hawaii as an insurance regulator, but his views as expressed here do not necessarily reflect the views of his employer. He has a B.A. from Columbia University, a J.D. from UCLA, an M.B.A. from the University of Hawaii at Manoa, and a CPCU.