Capitalism encourages choices and actions based on:
Reason, knowledge, courage, principles, certainty, love and respect, and admiration for achievement.
Capitalism also helps establish and encourage an economy and a social-political system of mutual benefit between individuals, organizations, and businesses. Capitalism encourages Genuine Goodwill and Benevolence towards one’s fellow man.
Statism encourages choices and actions based on:
Irrationalism, mysticism, ignorance, fear, the arbitrary, uncertainty, hatred and disrespect, and envy (“hatred of the good for being the good” – Ayn Rand).
Statism also establishes and encourages an economy (if one can exist) and a social-political system of coercive and corrupt manipulative behavior between individuals, organizations, and businesses. Statism encourages Contempt and Malevolence towards one’s fellow man.
For an excellent discussion about psychology and freedom, see Dr. Edith Packer’s essay “The Psychological Requirements of a Free Society.”