Issue: Economic: Defending Capitalism

[Melchior]

These days capitalism is mercilessly and unfairly under attack.

Mostly this is because of misconceptions surrounding capitalism, and opponents of capitalism who see the fascist alliance between the corporate media and the state and think that is the definition of capitalism.

What can we do to combat this? Should we change our language (free markets, economic prosperity, etc)? Should we harp on a differentiation ("capitalism, not corporatism" or "capitalism, not corporate fascism")?

[JosephTheLibertarian]

This is not capitalism, we have an economy, in America, which aligns closer to fascism than it does capitalism.

[Gee]

I do think "free market" sounds nicer than "capitalism", but I think the biggest argument against it is the inequality of income and wealth distribution. The best way to combat this is simply to point out that there are other economies freer or nearly as free as the United States with far more income equality, such as New Zealand and Australia. And, the United States had far more income equality in the 50s and 60s, even though its economy was freer then. And of course there is the fact that the USA is, in many ways, more of a mixed economy.

And of course you can point out that there is a clear relationship between economic freedom and the prosperity of the average joe:
http://upload.wikimedia.org/wikipedia/en/d/de/Index2006_EFCapita.gif

Singapore and Hong Kong are the worlds two freest economies, and, well, I think their success speaks for itself. They continue to grow at an astounding rate of like 8% per year.

[Gee]

This is not capitalism, we have an economy, in America, which aligns closer to fascism than it does capitalism.
Erm, now come on... There are certainly many instances of state-corporation corruption, but on the whole the USA is one of the freest economies in the world. Its actually ranked #4 here:
http://www.heritage.org/research/features/index/countries.cfm

[JosephTheLibertarian]

Well... when you throw the Bush administration into the mix, it sounds like maybe a watered down fascist state in the works.

[Gee]

Fortunately, there is only so much damage you can do in 8 years, especially when most of the government's attention is devoted to things unrelated to the economy.

[jon_perez]

Perhaps the root of the issue is not so much corporations per se, but the perceived unholy alliance between money interests and the press...? This is certainly a very undesirable form of corruption.


But other than that, I think you have to look to Chomsky's writings and Hollywood 'sensationalism' as the source for some people's attitude of mistrust of corporations.

Chomsky, while certainly contributing brilliant analyses at times, does go overboard with his own rhetoric and end up spouting rubbish every once in a while. Rubbish like the assertion that "corporations are totalitarian institutions". Some corporations may fit a particular narrow definition of "totalitarian" in principle, but of course, you can always opt to work for a different one that's more suitable for your outlook in life and certainly not all corporations operate like that.

The other problem I have with the "totalitarian" characterization is the deliberately disingenuous association between corporations and so-called communist, totalitarian societies which practice torture of their citizens. :rolleyes:

[Gee]

Corporations are only totalitarian when they are monopolies which provide a public necessity. Really, the big problem with totalitarian organizations is lack of accountability. Corporations are directly accountable to customers, whereas government agencies are much less directly accountable to voters. Monopolies of necissary goods or services aren't normally accountable, of course, since people have little choice on whether or not to purchase goods from them.

Monopolistic government agencies can easily be just as bad, because of how entrenched they become. Actually, they are probably even worse, since even an essential monopoly can be boycotted to a certain degree, enough to significantly harm profits. Government agencies, however, seem virtually immune to voter accountability, since few politians seem to care to remove harmful ones. To make matters worse, almost every government agency is, by definition, a government-mandated monopoly. Yay.

The real problem with most corporations comes when they (or unions, or ill-informed consumers looking for government to save them from the evil capitalists) lobby government to be given an unfair advantage over others, whether through regulation or some other means (subsidies, tax breaks, etc). This can decrease competition, and make business practices more monopolistic, hurting prices and wages. This is part of the genius of a constitutionally-limited government; the ability for government to unfairly alter the market processes is fundementally denied. As Dr. Paul has stated, the only way to get money out of politics is to get politics out of money. Governments should be limited in the ways they can interfere with the market, to prevent legistlation which harms the competitive environment and therefore both the consumer and laborer.

[Brandybuck]

I don't know who said this, but I love this quote: "The best defense against capitalism is the free market."

Let me go off on a tangent briefly. The chief difference between the left and the right is their attitudes towards private property. The right is meritocratic, in favor of private ownership, and does not fear wealth concentration. The left if egalitarian, discourages private ownership, and fears wealth concentration. These attitudes are independent of one's attitudes towards the state. Anarcho-socialists hate private property just as much as totalitarian communists, for example.

Now back to capitalism. It is inherently a "right wing" economic system, because it is based on the private ownership of capital. But it can exist under either big or small goverments. Classic fascism is one extreme, where the corporation is partnered with the state, and anarcho-capitalism is at the other. This is why I tend to use the term "free market" instead of "capitalism". Free market emphasize private property AND freedom. The US is very mixed. Parts of our economy are fascist (the Federal Reserve), parts are quasi-socialist (farm subsidies), and parts are considerably free market (information technology).

Much of the "evils" of capitalism that the left point to are really statism or the side effects of statism. For example, our taxation and regulatory environments encourages huge corporations with large legal departments. Natural monopolies, those that have arisen without government intervention, are rare and short lived. But state created monopolies are quite common.

Businesses WILL try to collude! There is no argument on this point. There's nothing big business likes better than a bunch of regulations that keep out the small business competition. But attempts at collusion are only a problem when they obtain government power. The solution is not to create a bigger government to micromanage businesses, but to shrink the government down so that it isn't selling privileges to the highest bidder.

We should stop worrying about the drug addict (business), and start worrying about the pusher (government). Lobbyists are nothing more than addicts begging the pusher for more crack (government largess, privilege, etc).

[Gee]

Natural monopolies, those that have arisen without government intervention, are rare and short lived. But state created monopolies are quite common.

Businesses WILL try to collude! There is no argument on this point. There's nothing big business likes better than a bunch of regulations that keep out the small business competition. But attempts at collusion are only a problem when they obtain government power. The solution is not to create a bigger government to micromanage businesses, but to shrink the government down so that it isn't selling privileges to the highest bidder.
An important point, and I think the only way to do this is with absolutely clear constitutional limits. Otherwise government will continue to expand. Eventually, I think it will reach a point where it is economically advantageous for a state to secede from the union. Well, actually I think we are at that point already, but it takes much more incentive than we have currently to do it.

[PaleoForPaul]

It comes down to what you believe.

If you believe that every person in America should have the same chance at success, then you should support capitalism.

If you believe that every person in America should have the same outcome, regardless of how much or little they work, then support socialism.

Personally, I wouldn't trade my freedom to earn as much money as I can for the safety of a socialist system where I'd be dragged down to mediocrity and forced to pay for lackadaisical leeches.

[lucky]

What is it called when one has a managed economy? Thsi is what we are moving toward now. It is partially managed now and I only see more of the same.

Bureaucracy is very expensive and not very adept at changing course when things are going wrong. With a free market economy it is more easily to change and adapt to changing circumstances.

[Bob Cochran]

Fortunately, there is only so much damage you can do in 8 years, especially when most of the government's attention is devoted to things unrelated to the economy.
I take it you do NOT follow economic matters! Holy smokes!:eek:

A staggering amount of damage has been done to our economy by the Dubya administration. Where shall I begin?...ahhhh, to heck with it...people need to educate themselves.

[Kuldebar]

Ron Paul says it best:


Capitalism should not be condemned, since we haven’t had capitalism.

A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank.

People are confusing government/corporate cronyism and controlled trade as Capitalism; it simply isn't so. Fascism perhaps, or shades of it, but not free-market capitalism.

Accept no substitute, freedom works for everyone except those who wish to control others!

[Seadeus]

"Capitalism" as used today is a term coined by Karl Marx intended to replace the term private property. There is no need to defend Capitalism, defend private property. "The pursuit of happiness" was a term of art that meant private property at the time T. Jeff used it. Would have saved us a lot of confusion if TJ had just stuck with simple words instead of showing off his smarts.

[Silverback]

I've been saying this for years.

"There can be no free market capitalism without free capital markets."

That is precisely what Dr. Paul is trying to address.