31. On Capitalists:Protect the First Generation of Capitalists, Eliminate the Second Generation

Both capitalists and business owners profit through exploitation, yet they differ fundamentally. The distinction lies in the fact that capitalists derive their profits solely from exploitation—they contribute no labor to the creation of social wealth, relying purely on capital for gain. Business owners, however, do not rely entirely on exploitation; they also invest labor in creating social wealth. Simply put, capitalists' wealth is entirely created by others, while entrepreneurs' wealth includes both self-created and externally created components.

From a negative perspective, since capitalists exploit society entirely, why not eliminate them completely? The reason is that everyone aspires to become a capitalist—everyone desires others to labor for them rather than laboring for others. This stems from the eternal, immutable law of human self-interest. Unless human self-interest is eradicated, humanity cannot eliminate capitalists without incurring the punishment of natural laws. Forcibly eliminating capitalists by violating human nature would result in widespread poverty. The planned economies and socialist experiments of the 20th century have amply demonstrated this.

On the positive side, permitting capitalist exploitation can actually promote widespread socioeconomic prosperity. Allowing exploitation means the law grants everyone the opportunity to become a capitalist, which inevitably motivates people to participate in social labor. Furthermore, because exploitation is permitted, capitalists enjoy security for both their persons and wealth, encouraging them to continuously invest their money. When capitalists are willing to invest, the public gains more job opportunities, inevitably leading to socioeconomic prosperity and progress.

Capitalists possess both positive and negative aspects for society. Can social institutional arrangements maximize their positive contributions while minimizing their negative impacts? The answer is affirmative. By restricting pathways to becoming a capitalist, protecting their property, and limiting wealth transfers, these societal outcomes can be achieved.

Restricting pathways to capitalism means all capitalists in society must first accumulate wealth through their own participation in social labor before ultimately becoming capitalists. This constitutes the sole legitimate pathway for citizens to become capitalists. The majority of society's capitalists should evolve from entrepreneurial pioneers. In essence, all capitalists must first contribute to society, accumulate wealth through their contributions, and thereby attain capitalist status. Put simply, capitalists can only be self-made. Second-generation wealth inheritors should not be permitted to become capitalists through inheritance.

Protecting the property of capitalists follows the same principle as protecting private property, as capitalists are also citizens. Although capitalists are citizens who exploit the masses, only by protecting their property can we encourage them to contribute to society. The greatest contribution capitalists make to society is spending money; the more they spend, the greater their value to society. Only by protecting property can we motivate capitalists to spend more willingly.

Restricting the transfer of capitalists' wealth also aims to prevent the emergence of second-generation capitalist families. In theory, capitalists who deeply understand democratic principles should recognize that their wealth stems from exploitation, not their own labor. Having enjoyed the benefits of societal wealth, they ought to return this public wealth to the people upon their death, rather than transferring it to their children or other unearned beneficiaries. Yet human self-interest often overrides noble moral sentiments. Therefore, it is imperative to restrict wealth transfer through inheritance or gifts, ensuring capitalist exploitation remains confined to a single generation. Under no circumstances should capitalist exploitation be allowed to extend to second or third generations. If the children of capitalists wish to continue as capitalists, they must become first-generation capitalists through their own abilities, just as their parents did.

In summary, democratic nations protect and encourage citizens to become first-generation capitalists, but they do not permit citizens to become second-generation capitalists through unearned means.