Thursday, August 13, 2009

On capitalism and freedom

Over on Facebook today, I got into a brief debate about the merits of capitalism. Fitting too, as the topic du jour (Healthcare) is at its core, a tug-of-war between the "have's" and the "have not's." What bothers me most is the false belief that capitalism is a zero sum game -- that for some to win, others must lose. This is theoretically and in reality, a false proposition. It assumes that resources are finite, which they are not.

Consider real estate. As Mark Twain once said, "Buy real estate, they're not making it any more." Well, we have found ways to make more of it -- lots more. Just ask the Japanese or any city dweller. It's called going vertical. Or how about the finite nature of energy? We will likely eventually replace fossil fuels with something else before long. France for instance, now powers about 85% of its electrical grid with nuclear energy.

In terms of capitalism, it's primary fuel is currency. Every nation on earth creates more and more of it every year through debt and inflation. So currency supply is NOT finite. Therefore one man's gain is not necessarily another man's loss. This is not to say that there aren't economic winner's and losers in society, only that capitalism itself is not the deciding factor on who wins or loses.

What anti-capitalist thinkers are really decrying is the fact that there are such large disparities between the have's and have not's. This cannot be denied but they falsely seek to indict the capitalist system as the culprit. The truth is that to a large extent these disparities are the simple result of the natural order. Some people are taller than others, some smarter, some stronger and some faster. These inequalities cannot be diminished through any man-made, social construct. Of course the Marxists among us believe the inequalities of outcome forged by these disparities can and should be diminished through communism. The only thing that ends up being diminished however is the human spirit and the standard of life for everyone.

Man was not born to be slaves to a social construct. That is the beauty and truth that underlies our political system which cherishes freedom and promotes capitalism. Redistribution of wealth (one of the prerequisites of nationalized healthcare) is a fundamental paradox to the American way of life. It is only now, that we stand at the precipice of financial ruin caused by redistribution policies that people are now standing up en masse to say, "enough is enough".

Is this greed or simply self-preservation? Can you really blame those who have labored so hard to build their own economic freedom, only to see more and more relinquished year after year, object? Make no mistake, the political class who seeks to take from one man's labor and give it to another is not doing it out of some sense of higher purpose. They do it for the sake of political power. For class warfare is one of the oldest political manifestos in history. Today, the Democrats are strumming this fiddle with great intensity. "From each according to his ability and to each according to his means," said Marx. And now, we have elected a leader in Barack Obama and a Congress led by Nancy Pelosi who embrace this philosophy for their own higher purpose: political power. This, above all else, is the greatest threat to our national security.

What will save us is the "Patriot class". You are seeing them now, finally, stand up in Town Halls and protests all across this land. They are powered by the sense of longing for a nation which truly governs with the consent of the people, not the coercion of the people. They are driven by the economic virtue of, "to each from his labors." These values we hold more dearly than any other people on earth. This is not a romanticism with our past but merely the acknowledgment of the values which have allowed our nation to prosper above all others. Americans who do not believe in these basic truths do not stand with us, they stand against us.


  1. But the distribution of wealth is necessary in macroeconomcs. It sounds great to say "everybody pays is own way" but the reality is that few actually do. Large corporations benefit from subsidies and low interest loans backed by the federal government. The exceedingly wealthy enjoy a number of tax loopholes that negate the progressive tax structure. Warren Buffet even pointed this out.

    Federal regulations were imposed after the great depression to prevent the economic stagnation that naturally occurs when mechanisms are not in place to ensure tat wealth is distributed. That's why we have labor laws and a minimum wage. Capitalism in its most simplistic form, does not work. Not at this level. We found that out in the 30s.

    Also, just to be a dick, I believe the quote about buying real estate was an adage coined by Will Rogers.

    I am also loathe to call the people speaking up at these town hall meetings patriots. Patriots are intelligent and informed. Most of what I've seen are a bunch of idiots screaming talking points issued by Rush Limbaugh and Glenn Beck. The people opposed to Obama's health care reform package aren't dealing with reality. They're making stuff up about death panels and suicide counseling. I'm sure there are plenty of good issues to address in Obama's plan, but as an American citizen I'm offended that the opposition thinks I'm too stupid to understand reality.

    Seriously, you accuse the Democrats of assuming Americans are stupid, but what about Republicans? Aren't they doing the same thing by reducing this discussion to name calling and flat out lies?

  2. Thanks for the comment. However, I'm compelled to correct a few things. First, we could have an entire, neverending debate about economics as I'm an Adam Smith kind of guy and you're in the Keynes camp ;) My discussion wasn't addressing the kind of government spending that is brought about by collective taxation. I realize people can't pay their way for everything on their own. Though I completely disagree with your assertion that minimum wage and labor laws have anything to do with making capitalism "work better".

    "Capitalism in its most simplistic form, does not work." What does that even mean? What evidence do you present to make such a wild statement? I certainly hope not the Depression! No legitimate economic historian places any significant portion of the blame on a "simplistic form" of capitalism operating at the time.

    "Buy land—they’re not making any more of it” is a statement that has been attributed to folk humorist Will Rogers (1879-1935) since the 1960s. The saying—like almost all American sayings—has also been attributed to Mark Twain (1835-1910).

    The version “ain’t nobody makin’ no more land” was used in Wyoming in 1909, so it is unlikely that Will Rogers originated the saying. Real estate companies popularized the Will Rogers authorship in real estate ads in the 1960s and 1970s.

    Now that Mr. Twain's reputation has been honorably defended, I have to stand up for, at least, Rush here as well. While I don't agree with the rather uncivil method many of the town hallers have been employing, it doesn't make their concerns or "Rush's talking points" any less valid. And I have a question for Barry Soetoro or any Congressman willing to take it... "Under what Constitutional provision do you derive the authority to enact any such mandatory health care legislation?"

    Do the Democrats assume Americans are stupid? Do they believe us incapable of running our own lives? I don't know... perhaps so. What I do know is they rely on the most ignorant and uneducated among us for the bulk of their constituency in many areas of the country.

    But it doesn't really matter what their motivation for creating a single-payer government healthcare program. They simply do not have the legal or moral authority to do so. And THAT is why people are rightly outraged.

  3. I've been trying to learn about this health care proposal but I simply don't have the time to sit down and read it. What I have learned is that much of the crap being argued by the opposition isn't true. There will not be death panels, nor will seniors be encouraged to kill themselves. I'm not sure how mandatory this program will be, but I know there are some issues.

    Rather than simply opposing the plan, which is a long way from being forced on us, it would be much more productive to offer alternatives. It would certainly be better than the current tactics.

    Our health care system sucks. It's too expensive for 99% of the people to afford, so most of us cling to an HMO or a PPO through our employers. That, my friend, is socialized medicine. Sure, I have a choice. Go uninsured and hope I don't get randomly punched in the face and need brain surgery, develop super powers, or make sure I'm employed by a company that offers a health plan. My premium, which I pay a portion of, covers the medical costs of the entire group. Since I have never filed a claim on my current plan (and haven't filed a claim in 12 years) United Health Care calculates my premium based on the risk posed by the whole group. If the 350 pound diabetic needs her leg amputated my premiums will go up to cover the increased burden.

    I prefer the idea of a fallback plan. Something like medicare for people who have no other option. I'd also like to see medicare reformed to make it harder for people to buy those motorized carts and there is no way Viagra should be covered. I also wouldn't mind some ownership stipulations. No insulin for diabetics who don't follow a prescribed diet and exercise program. No breathing treatments for people who smoke. And no emergency medical care for people into erotic asphyxiation.

    And I stand by my statement that unregulated capitalism doesn't work. The Great Depression was a much larger issue and it was tied specifically to a lack of oversight in the securities market.

    Go back to Teddy Roosevelt and his trust-busting antics to understand where I'm coming from. Capitalism is inherently flawed in the sense that it is a competitive market but in every competition there is a winner and a loser. In capitalism the winner generally acquires the loser. Eventually the competition is crushed. Capitalism is doomed to to fail because it always results in totalitarianism. Eventually somebody controls everything. You have to have regulations in place to keep it balanced.

    When Teddy Roosevelt and William Howard Taft used their authority to break up trusts, were they not, in a sense, redistributing wealth? Taft even went so far as to impose control federal control over trusts.

    It seems to me that health care has become a massive trust that works against the interest of the people and the free market. Something needs to be done. Perhaps Obama's plan is flawed, but I challenge Republicans and Conservatives to step up with something other than the status quo as an alternative.

    By the way, now that PhRMA is backing Obama's plan it seems as though the Republicans are changing their tune. That actually worries me a little because I was hoping they'd warm up to the idea of actually working on alternatives rather than fueling the fires of idiocy.

  4. I agree with your post. I agree that currency is not finite, but I have a problem with this. As the Federal Reserve issues more and more currency it simply stokes inflation, which means every dollar in your pocket is subject to constant devaluation. The fractional reserve system we're operating under and the fact that the Fed is a non-government entity is crushing everyone that works and earns their own living.

    By abolishing the gold standard, our money has become worthless paper and more unnervingly a conceptual entity because only 3% of the country's currency physically exists.

    Because of the Fed, we have a national debt. We also have a system where the government can spend more than it has, as it does every year.

    In true capitalism, currency should be finite and exchanged for goods and services for which the value of the currency is equal to the value of the goods or services for which they are exchanged. That's the entire concept behind laissez faire, which is what purist conservatives would like to see rule the markets.

    I do have to say, it's incredible to see what's happened since Woodrow Wilson took office. The 10th amendment has become a floormat beneath the entrance to the congressional halls.