In having some discussions with people over the last few days it has blossomed in my mind the idea that many of those who so vehemently lambast capitalism have no understanding what capitalism actually is. As a result they attack and attack using examples and historical incidents as justification for ending capitalism when those examples are no such justification. So I feel like I have to write this article to clarify that point, to help those who are floundering with those conversations gain some understanding of what my belief is in capitalism. Further it will help those who attack it understand why I refuse to accept the idea that some form of communism/socialism/fascism because it is not only immoral, but is also far worse for any people who aspire to live free.
Before we begin, allow me to explain my chosen art. All the pictures that I am posting with this article are prime examples of the propaganda out there attempting to paint capitalism in a false light. This is the campaign of the extreme far left progressives who wish to destroy what allowed America’s astounding rise in stature.
Let’s begin with a basic definition of capitalism, shall we? Capitalism is an economic system in which the means of production are privately owned and operated for profit. So let’s keep this straight. Capitalism is not a socio-political system aiming to control or shape the class distribution or involve government in the equation in any way. In its truest form, capitalism remains untouched by government. Everything within the system is privately owned by the contributors of capital, the capitalists. The important point, and this should not be overlooked, is that the beauty of capitalism is that the costs associated are determined solely by market forces: supply, demand, price, etc.
On the other hand we have Communism. Communism is a sociopolitical movement that aims for a classless and stateless society structured upon common ownership of the means of production, free access to articles of consumption, and the end of wage labor and private property in the means of production and real estate. In theory communism aims to place ownership of the means of production in the hands of the workers. Everything is owned by the “people” , or the working class (the proletariat). In direct contrast to capitalism, the costs associated with communism are determined by… well… they are not determined at all. In its purest form, everyone simply gets what they need, no cost matters. The services of a specialist doctor are equal in value to the services of a landscaper cutting your grass. Regardless of input to the system, everyone gets only what they need to survive, and nothing more or , more importantly, nothing less.
Now allow me to say, just so no one gets their underthings wadded up in an uncomfortable manner, that I don’t offer these definitions as a means of saying that anyone is lacking in intelligence. I offer them because, as I have stated in the past, it is important to impart one’s definitions up front so that there is less chance of misinterpretation or wrangling through debates where we are talking about something entirely different. So if you are going to make your argument based on something other than the definitions above, please identify your definition before you begin.
There is an ongoing dialogue, driven by those on the far left, that is attempting to paint capitalism as a dangerous and immoral undertaking. It is a pervasive undertone to nearly every economic discussion the left engages in. It wouldn’t be so dangerous if such senseless rhetoric weren’t taking root in the under 40 crowd on the left. Even those dreaded Keynes disciples at America’s institutions of higher learning don’t like capitalism. They preach that the only good capitalism is heavily regulated capitalism (despite that they are fundamentally altering capitalism into fascism or socialism in doing so).
But the most dangerous part of this rhetoric is in the consequences that they falsely assign to capitalism. They claim that it makes people immoral. They claim that it causes slavery and theft. They claim that it is the cause of economic downturns and that it destroys the middle class. Take this example from Richard Wolff, published in the UK Guardian earlier this year:
Republican and Democratic politicians alike dare not link this crisis to an economic system that has never stopped producing those “downturns” that regularly cost so many millions of jobs, wasted resources, lost outputs and injured lives. For them, the economic system is beyond questioning. They bow before the unspoken taboo: never criticise the system upon which your careers depend.
I would point out Mr. Wolff, that it is the system on which your career depends as well. Communism requires and, as history shows, highly frowns upon political commentary that challenges the government. But I digress. Capitalism is not the cause of economic downturns. Economic downturns are the result of market forces. And the dramatic economic downturns that we have had in America’s history were explicitly not caused by capitalism. They were instead caused by government’s intrusion into, and subsequent manipulation and unbalancing of, the market. Without government distorting the marketplace, things could not have gotten so out of whack as to require such a dramatic correction. And that is a primary truth that those on the left, especially the far left, refuse to acknowledge: It is government action, not the acts of a few immoral men with money, that is the poison in the well of America’s economy.
Others take things to the next level, claiming that capitalism is downright evil. Take this example from Clayton Morgareidge, a professor at Lewis and Clark University in Oregon. The author takes pride in founding the “Old Mole” movement, in reference to Marx’s analogy to a mole undermining the capitalist foundation and showing up uninvited to the capitalist’s lawn.
I have argued that capitalism is war, and that those of us who do not own capital suffer from it just as do civilian populations caught between opposing armies, or as foot soldiers conscripted into armies fighting for interests that are not our own. I’ve tried to show that capitalism is the violent negation of democracy, for it is the interests of those who own capital that determine how we live: their jobs, products, services, manufactured culture, and propaganda shape our lives and our minds.
And then there are those like our own lovable Redski, Charlie, who consistently claim that the capitalist system is to blame for the disparity in wealth in the US. The claim, to be more clear, is that the wealthy have such a monopoly on power and wealth, that they are intentionally squeezing the middle class worker out of existence. A haughty claim to be sure. However, I would point out that correlation is not causation. I won’t debate whether the middle class is actually truly shrinking, but I also am not willing to fall prey to the emotional claim that it is capitalism’s fault. Or more specifically, according to our redski, the free market is to blame. Utter hogwash.
Capitalism is not the cause of the decline of the middle class. In fact, take a look at the thoughts from Operation HOPE Global Spokesman Ambassador Andrew Young. He stated, “communism failed because it could not create a middle class, and capitalism succeeded precisely because it did create a middle class, but capitalism itself has begun to fail because it has not made itself relevant to all people.” Here is a guy who’s entire life is dedicated to the “other America” (poor minorities) and even he doesn’t fall for the ‘capitalism is the cause of the decline of middle class’ fallacy. There are plenty of problems in America with wealth disparity and the power taken by those with wealth, but the problem is not that capitalism failed. The problem is that government intervened in far too many ways.
When people on the “left” clamored for government action, they got exactly what they asked for: government action. The people gave the government the mandate to intrude on the market, but had no understanding that government had no intention of doing so on their behalf. No, instead government intruded on the market, exactly as “the people” asked, only they did so in ways that protected and empowered those at the top of the game. The “2%” became more elite and more powerful by writ of Congressional pen and Presidential Order. And now the people clamor again for government intervention, at a time when the government and the wealthy elite are one and the same!
NOTE: As a nifty little side game for those playing along, name me a systemic problem with Capitalism that is CAUSED by the truly free market in the last 100 years. Bonus points if you can find something that government didn’t actually make possible. Extra bonus points if you find something that is even remotely possible in today’s climate.
It should be noted that regardless of position nearly all of the economists out there tend to agree that capitalism encourages growth. Communism, on the other hand, does no such thing. The only thing that grows in communism is the amount of control given to the very top of the bracket. The communist embracers love to spout off that their version of the future is one where the working middle class has the power and grows. They claim that capitalism shrinks the middle class while that problem won’t exist in their brave new world. Equality is the name of the game and they will put everyone on equal ground! And they are correct.
Because Communism does not shrink the middle class and it does foster more equality economically. The problem is that it doesn’t bring the poorest among us up to middle class, it brings the middle class down to the poorest among us. “From each according to ability, To each according to need.” Explain to me how any version of “to each according to need” is middle class? It sounds to me like the very statement is a call for the elimination of middle class. Everyone only gets what they need. In other words, everyone gets stripped down to the bare necessities, unless of course they are the wealthy elite who run the system. You want REAL economic disparity? Embrace the communist viewpoint.
Of course those on that far left fringe would have you believe that they are merely the vocal portion of a new America that supports their vision. Those of us favoring capitalism are the remaining “remnant” according to Charlie. A vast minority who are clinging desperately to ideological failures of the past. This glaring headline from the bastion of economic enlightenment, The Huffington Post, seems to echo Charlie’s claim:
U.S. Support For ‘Free Market’ Capitalism Drops Below China, Brazil, Poll Finds
That is until you actually read the article. Then the fringe among us who still claim that an unregulated free market is the best path forward aren’t nearly as fringe as one would like to claim:
Nearly three years after the financial system first came perilously close to collapse, American support for an unregulated free market appears to have cratered.
A new report by GlobeScan, an international opinion research consultancy, suggests that the number of Americans who believe in the strength of the free market economy dropped markedly last year. In fact, according to the survey results, both Brazil and China, on a percentage basis, ranked higher than the U.S. in overall support for free market capitalism.
The report, released this week and based on 12,884 interviews in 25 countries, asked participants to agree or disagree with the statement that the “free market economy is the best system on which to base the future of the world.”
GlobeScan found Americans strongly agreeing or somewhat agreeing dropped to 59 percent from 74 percent, a 15 percent dip from the year prior and the second largest year-over-year drop of any country besides Turkey. An even more dramatic drop (32 percent drop) occurred among those in the U.S. with annual incomes below $20,000, of which only 44 percent agreed that the free market was the ideal system.
“American support for an unregulated free market has CRATERED!” Cratered! As in fallen into a hole lower than the surface situation. I wouldn’t say that 6 out of every 10 people in America supporting an unregulated free market isn’t exactly “cratering”. I would say they lost some support when viewed against the previous year’s numbers. I would say that those who think like Charlie, despite his claims otherwise, make up a small minority (only 10% of Americans think Communism is superior to what we have now, which is NOT free market capitalism). Further, those countries out there that already tried the communism route (China) now overwhelmingly believe that that what we advocate is a better path forward. Learn from those who went before….
What should be taken from the article offered above? While trying to douse the hopes of those who support an “unregulated free market,” the author has instead made me feel good about it. 59% of Americans feel that an unregulated free market is the best path forward!!!! However, what is at the same time disappointing is that when 3 out of every 4 Americans believed so, we still allowed government to creep in and turn our market into the mess that it has become. Yet those on the fringe would have you believe that capitalism is to blame.
And all of this completely ignores that it is utterly immoral to to not allow a free person to place proper value on his or her services. That someone could believe that the 60-70 hours a week I am willing to put into work (as a salaried 40 hour employee) is equal in value to the ghetto girl down the hall that refuses to work more than 40, and who actually only works about 25 when you take out her time on the phone with her friends and 3 hour lunch, is ludicrous. How is that morally superior? And before the whole slavery/indian nonsense rears its ugly head again, let’s place that where it belongs, as part of mercantilism or colonialism, not capitalism.
And further, how is it that anyone could think such a system would result in increased productivity or a return to American pride? Anyone who has ever been a part of such a system will tell you bluntly that productivity decreases. There is no incentive to perform at a higher level. Why should I go above and beyond on anything? I get no benefit for doing so. I still get “according to my need”. The Clinton Welfare reforms were a prime example of what happens when people are forced off the government teat and must rely on their own desire to succeed. Those reforms were working, until President Obama eliminated them in his first week as Welfare Provider in Chief. And of course according to need is another can of worms altogether.
Because determining what is need and what is want is completely arbitrary. When compared to the poor of the rest of the world, the poorest among us here in the US live like kings. So is “need” based on what is needed to live in Ethiopia, or is need based on what America’s poor currently have? Or is it an arbitrary level determined by someone somewhere who just thinks that they know better than me? Does Black Flag get to determine what my needs are? Do I get to determine G-Man’s needs? Does Charlie get to determine everyone’s level of need?
Don’t get me wrong, SUFA, capitalism is not perfect. No economic system is. But it is better than any other system out there. It isn’t inherently evil. It is not the cause of a shrinking middle class. And it is not the reason that the disparity in income between the top 2% and the rest of us continues to grow. Capitalism has its faults, and next week I will offer a short article on where I think capitalism went wrong in America (beyond the concept of government intrusion).
But it sure as hell beats the pants off the far left’s communist utopia.