When a business exploits political interventionism for profit, several terms may be used to describe the undertaking. If one is looking at the exploitation from the perspective of political science—and perceives the behavior as a special-interest group corrupting impartial government—then one might choose the terms regulatory capture or cronyism. But if one is looking at the activity from the perspective of business management—and understands the behavior as a corporation’s abandonment of market-oriented wealth creation—then one might choose the terms rent-seeking or using the political means instead of the economic means.

The Idea of “Contra-Capitalism”

This second alternative suggests a further thought. If we understand rent-seeking and using the political means to be, at their most fundamental level, a business’s abandonment—and ultimately its social subversion—of capitalistic practices, then we must contemplate the possibility that these two practices are but instances of a far wider category of actions. We must consider that there may exist an entire class of actions, comprising many similar abandonments and subversions of capitalist practices, including actions that are far outside the realms of politics and government.

That, at any rate, was the insight of Robert Bradley Jr. while writing his multi-volume history of Enron’s rise and fall. As a longtime Enron employee, and CEO Ken Lay’s speechwriter, Bradley had seen innumerable instances of perfectly legal rent-seeking by his company. The infrastructure socialism of “open access” was fundamental to the operation of Enron’s natural-gas and electricity divisions. The Ex-Im Bank and OPIC were essential to its overseas power-generation deals. Subsidies were key to Enron’s participation in the wind-power and solar energy industries.

But such rent-seeking, Bradley began to understand, was somehow connected to other behaviors that he was witnessing or hearing about. These practices also seemed perfectly legal, but they were diametrically contrary to those practices and attitudes that Bradley, in his long study of the free-market tradition, had repeatedly heard mandated by advocates of capitalism. One example was Ken Lay’s imprudent pursuit of ventures clearly beyond Enron’s competence, such as the provision of global water supplies and the retailing of electricity to households. Another example was COO Jeff Skilling’s free-wheeling use of mark-to-market accounting, untethered from data based on closely similar markets. A third example was CFO Andy Fastow’s construction of Rube Goldberg debt-structures that purported to meet accounting standards via mind-numbing contortions.

Hubristic imprudence. Hyped projections. Impenetrable accounting. Just like rent-seeking, Bradley thought, those are exactly the sorts of behavior that the capitalist tradition has always denounced, strenuously. Thus, he termed the category of behavior that he was trying to conceptualize “contra-capitalism.” And he began to look for connections among its instances.

Capitalist Orthopraxy

Invariably, when Bradley proposed his neologism “contra-capitalism” to thinkers in the libertarian or conservative world (including this author), they responded: “You mean “anti-capitalism.” For that reason, Bradley was fortunate to have been at a “conservative” Texas natural-gas company rather than a “middle-of-the-road” Manhattan bank. At Enron, the top executives generally espoused the main mantra of the Chicago-School’s ideology: embrace competitive markets to better serve consumers. Enron’s signature domestic crusade was lessening energy regulation for the sake of increased competition among suppliers and lower prices for buyers. Abroad, Enron’s best-known crusade was the privatization of publicly owned companies. Lay himself had been quoted as saying: “I believe in God and free markets” If there was one thing Enron executives were not, it was anti-capitalist.

The second-most-common response to the thesis of “contra-capitalism” was: “You are committing the fallacy of ‘no true Scotsman’.”1 Enron’s top executives were unquestionably capitalists, in the colloquial sense of that word: they were leading businessmen who ran a large profit-and-loss company in a relatively free economy. Therefore, ran the objection: One can say that a capitalist who games accounting standards is not a morally good capitalist. But to say his behavior is “contra-capitalist” is like saying “No true Scotsman would put sugar on his porridge.”

This objection fails. Yes, it may be irrational to speak of acts that “no true Scotsman” would commit, for the simple reason that nationality generally implies no code of conduct. But, by contrast, some categories of human types do imply a code of conduct, and then a “No true…” assertion can be accurate.

For example, a person may unquestionably be a gentleman, as a matter of social status, but some of his behavior may be “ungentlemanly” and thereby bring his class into disrepute. “No true gentleman would do such a thing.” Likewise, a person may unquestionably be a Christian, theologically and devotionally, but some of his behavior may be “un-Christian” and thereby bring his religion into disrepute. “No true Christian would do such a thing.” Those statements can be accurate. In the second case, students of religion formulate this truth by distinguishing between orthodoxy in one’s beliefs or attitudes and orthopraxy in one’s behavior. Bradley’s term “contra-capitalism” rests on the premise that there exists a capitalist orthopraxy.

The Derivation of a Capitalist Orthopraxy

But if there is a code of orthopraxy associated with capitalism, a code that condemns “contra-capitalist” behavior, how is that code to be determined? The parallel example of Christian and un-Christian behavior offers a possible answer: Two procedures must be employed in tandem—one empirical, one philosophical.

Empirically, over the course of two thousand years, Christian theologians, proselytizers, and novelists—people proven by history to be devout—have generated and refined an enormous body of reflection on how Christians should behave. Integrating that corpus of thought, then sifting it, yields a Christian orthopraxy. However, this process of refining and abstracting an orthopraxy must simultaneously be guided by theoretical principles, by orthodoxy. Considering Christianity’s fundamental metaphysics and philosophical anthropology, what is the heart and soul of Christian behavior? Applying that philosophical screen to the empirical tradition helps one to weed out the outré suggestions of heretics, mavericks, outliers, eccentrics, and cranks.

Formulating a capitalist orthopraxy proceeds by the same two-step process. In Capitalism at Work, the first volume of his Enron tetralogy, Bradley showed that 250 years of the capitalist tradition had generated a more or less consistent and mutually reinforcing set of reflections on how a capitalist ought to behave. This present essay attempts to integrate and sift Bradley’s empirical findings using a version of the philosophical approach, to produce a tentative formulation of capitalist orthopraxy.

Assembling the Data

“In short, capitalism involved an orthopraxy of hard bargains, hard facts, and hard work.”

The initial section of Capitalism at Work was called “Heroic Capitalism,” and it described the epistemological and ethical thought of three very different pro-capitalist authors living in three very different centuries: Adam Smith, Samuel Smiles, and Ayn Rand. Despite (or because of) the highly divergent perspectives of those authors, an overlay of their philosophies began to produce the recognizable contours of a bourgeois-capitalist orthopraxy, with three main elements: a social commitment to seeking mutual benefit through voluntary trade, an epistemological commitment to focusing one’s mind only on realities, and an arduous personal pursuit of prosperous self-realization. In short, capitalism involved an orthopraxy of hard bargains, hard facts, and hard work.

Clearly, the writings of Bradley’s three pillars needed to be supplemented, most obviously by scholarly commentary that could elucidate the thinking of these three capitalist champions. And so Bradley brought into the conversation the works of Smith analysts James Otteson and Jonathan Wight; Smiles commentators Asa Briggs and Tim Travers; Rand scholars Edward Younkins and Stephen Hicks.

But in order to truly demonstrate the existence of an orthopractic tradition within bourgeois capitalism, Bradley needed much, much more. And so he also brought into the discussion scores of other pro-capitalist thinkers, in order to create an omnium gatherum of business precepts. Included as contributors were: Dugald Stewart, Herbert Spencer, William Graham Sumner, Simon Newcomb, Joseph Schumpeter, Allan Nevins, Henrietta Larson, Alfred Chandler, F. A. Hayek, Milton Friedman, Israel Kirzner, James Buchanan, Ronald Coase, Vernon Smith, Julian Simon, Murray Rothbard, Don Lavoie, Robert Nozick, Jim Collins, Michael Novak, Richard Epstein, and Charles Koch. The effect of this survey was both to reinforce the general contours of capitalist orthopraxy and to add particular details.

Yet how much of that detailed particularity was truly a part of capitalist orthopraxy, and how much was just the personal dicta of individual authors? Separating the essential from the idiosyncratic demands a sifting that takes a philosophic approach.

Abstracting the Elements

When the precepts laid down by pro-capitalist thinkers over the course of centuries are grouped and categorized, two striking facts emerge. First, they tend to fall into three large categories of behavior. Secondly, each of those three categories reflects one or more of the three fundamental injunctions of capitalism: no force; no fraud; fulfill contracts.

The first and most obvious category of capitalist orthopraxy (based on “no force”) involves injunctions to employ the free market, in contrast to employing “the political means” of profit-making. The second category is an insistence on honest dealing with others who are actually or potentially in one’s market, which is to say, the general public. This has two facets: Honesty about what one has to offer (“no fraud”), then keeping one’s promise to deliver what one has offered (“fulfill contracts”).

The third category of injunctions is less familiar, though it is actually the second category (honest dealing) applied to oneself. Philosophers in the classical tradition, such as Josef Pieper and Douglas Den Uyl, use the term “prudence” to describe this virtue. It entails a realistic assessment of one’s abilities and one’s situation (“no fraud” becomes “no self-deceit”), followed by an unshakeable dedication to the self-realizational goals dictated by that assessment (“fulfill contracts” becomes “do not abandon one’s commitments”).

Unfortunately, as those philosophers admit, the term “prudence” is no longer understood in this classical sense. Still, some term is needed for this third element of capitalist orthopraxy. For it was this third category of injunctions—brutal self-honesty leading to onerous achievement—that transformed the timeless rules of fair exchange into the “bourgeois capitalist” economy.

The Concerns of “Contra-Capitalism”

If that is capitalist orthopraxy, what is “contra-capitalism”? Logically, “contra-capitalism” would include any behavior contrary to capitalist orthopraxy. Empirically, though, one finds that the capitalist moralists concern themselves most often not with behavior that is utterly alien to capitalist orthopraxy (e.g., running a hippie commune) but with contra-capitalist behavior that tends to emerge insidiously from ordinary capitalist behavior—not naturally and logically but easily, via self-partiality, rationalization, and evasion.

For example, the capitalist tradition expects governments to pursue their countries’ prosperity (the wealth of nations). Adam Smith supported the state’s “erecting and maintaining” public works vital to national flourishing. Even the most pro-capitalist businessmen are therefore tempted to believe that their own company or industry is so vital to national prosperity as to merit subsidy and protection in trying times. Recognizing that very natural temptation to self-partiality, capitalist orthopraxy in this first category denounces such Hamiltonianism as almost always an attempt to circumvent the market and gain what one has not earned—contra-capitalism.

Again, the capitalist tradition expects free-market traders to extol their offerings. Advertising and salesmanship are central to capitalism. But, as the ambiguity of the word “hustle” demonstrates, businessmen are often tempted to push their salesmanship into the realm of hyperbole. The capitalist moralists say that even the most enthusiastic salesmanship must be bound by honesty; if not, it becomes a form of deceit and (even if legal) an attempt to gain what one could not earn—contra-capitalism.

The capitalist tradition expects its adherents to pursue self-realization and prosperity. Self-Help, by Samuel Smiles, is in some ways the key ethical work of bourgeois capitalism. But hard work is, well, hard work. And that creates a temptation in most people to perceive and portray their situation and their prospects as more promising than they really are, leading people to undertake hubristic and unpromising ventures, to the detriment of themselves and their colleagues or dependents. This is the third form of contra-capitalism: imprudence.

From the largest perspective, these three forms of contra-capitalism are one. “Philosophic fraud” was the name Bradley gave to violations of honest dealing, the second form of contra-capitalism. Such behavior does not transgress capitalist orthodoxy’s legal ban on fraud, but it does transgress capitalist orthopraxy’s spirit of truthfulness and realism. Stepping back, however, one can consider all forms of contra-capitalism to be “philosophic fraud.” The rent-seeker deceives both himself and the public about the national importance of his company. The vaporware salesman deceives both himself and the market about his prospects. The daydreamer deceives both himself and those who rely on him about his abilities, prospects, and commitments.


The concepts of “capitalist orthopraxy” and “contra-capitalism” are needed both for business management and for business history. From the standpoint of business management, a capitalist orthopraxy based on “the earned” helps a corporation optimize profit in a way that keeps the company operating as a profit-making engine—the central legal purpose of a for-profit company. The concept of “contra-capitalism” provides a guardrail for that endeavor. It insists that executives focus on reality, honesty, and markets—not daydreams, hype, and political pull.

For more on these topics, seeRent Seeking, by David R. Henderson in the Concise Encyclopedia of Economics and “Political Enron: Its Behavior and Spirit,” by Robert L. Bradley, Library of Economics and Liberty, Apr. 7, 2014.

When the concepts of “capitalist orthopraxy” and “contra-capitalism” are employed socio-economically, they enable historians and journalists to perceive as interrelated and mutually reinforcing numerous behaviors that might otherwise appear disparate. How was Enron’s rent-seeking linked to its executives’ nepotism? How was its excessive compensation connected to its vaporware hype? How was its civic grandstanding similar to its gaming of SEC rules? The concept of “contra-capitalism” explains those linkages. They were all examples of an infectious willingness to deceive oneself and others rather than pursue “the earned.”

After Bradley’s layoff from Enron, he began to read journalistic analyses of his former company’s collapse. Again and again, he saw Enron’s failure explained as the natural and logical result of its executives’ pro-capitalist beliefs. That is when Bradley began drawing on his long experience at the company and his long study of the capitalist tradition to formulate his rebuttal, which he then demonstrated in his multi-volume history. Enron’s fall was not at all a natural or logical evolution of its executives’ capitalist beliefs. On the contrary, it was brought about by the company’s increasing adoption of contra-capitalist behavior. To be sure, that behavior emerged easily as its executives succumbed to capitalism’s besetting sins: hubris, hype, and rationalization. But the behavior that brought Enron down was not capitalist orthopraxy; it was the opposite. It was contra-capitalism.


[1] Importantly, “no true Scotsman” is not a logical fallacy. It is a rhetorical move that involves the ad hoc rescue of a generalization. Anthony Flew first formulated it this way. “In this ungracious move a brash generalization, such as No Scotsmen put sugar on their porridge, when faced with falsifying facts, is transformed while you wait into an impotent tautology: if ostensible Scotsmen put sugar on their porridge, then this is by itself sufficient to prove them not true Scotsmen.” God & Philosophy (New York: Harcourt, Brace & World, 1966), p. 104.

*Roger Donway is a research assistant at the Institute for Energy Research and freelance editor and writer.