The Fight for Capitalism Against Impostors
>Proponents of true capitalism have an upward battle to fight. The definition of capitalism itself has been skewed by many, and its reputation has been tarnished in the resulting confusion. Free-market advocates around the world should shudder at Žižek's blatant stereotype of the financial meltdown of 2008 as a product of capitalism. FULL ARTICLE by Nicholas Scipione
Comments (74)
Free market fan
Chief amongst the imposters are those who claim capitalism as being synonymous with the free market.
The sooner supporters of free markets abandon their attempted co-option of the term capitalist the better.
Capitalism was coined to describe the system of state granted privilege for a minority in capital ownership which followed the feudal system, a system which bears little resemblance to the free market.
Published: September 8, 2009 8:22 AM
DJF
This goes beyond just the US. It would help if some “free market” supporters would not give the free market a bad name by associating it with trade with Chinese communist state corporations or with Dubai ports state owned corporation. I know that in today’s world it is impossible to be 100% free market but when the corporation is 100% owned or controlled by a government then it should not even be mentioned in any conversation concerning free market except in a negative manner.
There seems to be a bad idea floating around that as long as something has corporation as part of its name it is part of the free market, under that banner the US Post Office and the Corporation for Public Broadcasting is part of the free market.
Published: September 8, 2009 8:24 AM
RWW
I agree with Free Market Fannie. "The free market" is much more descriptive than "capitalism," and it places emphasis on the social and ethical sides of freedom, rather than economic technicalities. Also, it's easier to point out, as a supporter of the free market (rather than "capitalism") that, for example, communism is compatible with freedom, as long as it is voluntary.
I also like "voluntaryism" and similar terms.
Published: September 8, 2009 8:34 AM
I Hate You
Free Market Fan, you are a complete idot and a fucking moron.
Capitalism means private ownership of capital and it IS free market.
You cannot have a free market without capitalism.
If you cannot own capital, how will you freely trade it ?
Fucking moron !
Published: September 8, 2009 10:05 AM
Mrhuh
Yikes, such language "I Hate You". You might be right, although the term "capitalism" was a disparaging term created by Karl Marx. The classical economists if I'm not mistaken referred to it as laissez-faire.
Published: September 8, 2009 10:12 AM
Mrhuh
Yikes, such language "I Hate You". You might be right, although the term "capitalism" was a disparaging term created by Karl Marx. The classical economists if I'm not mistaken referred to it solely as "laissez-faire".
Published: September 8, 2009 10:12 AM
Robert
Capitalism fails because products are sold at a profit, meaning that the buyers always have to have more money than it cost to make the products, meaning that if capitalism ever becomes a closed system it will collapse.
Published: September 8, 2009 10:15 AM
Brad
I, too, am on board with a change in semantics.
Why not?
I've been reading Radicals for Capitalism by Brian Doherty and if we're going for the term radical, why not endeavor to use a different term? If you're already going out on a limb by cloaking yourself in "radicalism" you might as well use Free Marketeer instead (granted it isn't as easy to put the -ism suffix to it, but aren't -isms themselves likely to alienate half the audience anyway)?
The battle today is to convince people that individualism and voluntary association are the only way man can survive long term. We've had a century of various Nation States with an assortment of -isms attached to their economic models and we've had millions dead as a result.
Statists have had their way for quite a long time now, bending the minds of several generations. And we are on the brink of collapse and chaos. The only way out is individualism and voluntary association and it is the lot of libertarianesque people to impress this upon people as quickly as possible.
The task, of course, is difficult as the masses look for easily digestable pieces of information. It is part of the problem in the first place as the real convincing takes time and effort. But if we spend so much time trying to explain what REAL capitalism is versus the "street" interpretation, we've already lost precious time and dealing with the uphill battle of anti-capitalist sentiment.
Creat a new lexicon for a radical argument. Granted you risk being dumped in with some the others out there that have cropped up on the socialist side - mutualism, syndicalism etc etc that haven't necessarily caught fire either, but if we are to lead a peaceful revolution from what we have, the "hook" needs to be ingested first and the consistent message of free association at all levels at all times needs to follow. This just isn't going to happen with the opening salvo to the uninitiated being a lecture on what capitalism really is. It's too technical and the bias is huge. Why sweat it?
The ultimate aim to instill the reality in people that nothing is guaranteed. An economic system that comports with the philosophical system that between the time life is thrust upon us and our anticipatable death we have a finite and several mental existence that seeks to discern order from chaos. By associating with one another we can try and make for incrementally less chaos, perhaps enough to live a life and moderate happiness. But there are no guarantees, and searching for one all inclusive guarantor will ultimately lead to the offensive us of Force and create more chaos than what the natural balance of things would offer up. First and foremost is the acceptance of mortality instead of searching for the Master Alchemist who makes wonderful promises that ultimately only leads to heavy metal poisoning.
That, in and of itself, is a hard enough task so beginning from an uphill struggle using current semantics only makes a very difficult task impossible. Most people that I am aware of, directly and theoretically, grab onto one form of superstition or other. They are welcome to them as long as they stop short of using offensive Force against other people. THAT is the underlying reality here - convincing people to abate the use of Force. And when the term capitalism has been corrupted beyond recall as being associated with the Force that has been inherently used in our Fascistic system, then why hang on to it?
In writing this lengthy ramble I ran the term Force into a thesaurus. My thought was to find a antonym for Force and stick an -ism at the end. It is disturbing just how many synonyms there are for Force and so very few antonyms, and what few there are require more of a phrase than a simple word. Our inherent nature to use Force and to compel is nested so deeply on our language it makes one despair --
Main Entry: force
Part of Speech: verb
Definition: obligate to do something
Synonyms: apply, bear down, bear hard on, bind, blackmail, bring pressure to bear upon, burden, cause, charge, choke, coerce, command, compel, concuss, conscript, constrain, contract, demand, draft, drag, dragoon, drive, enforce, enjoin, exact, extort, fix, impel, impose, impress, inflict, insist, limit, make, move, necessitate, oblige, obtrude, occasion, order, overcome, pin down, press, pressure, pressurize, put screws to, put squeeze on, require, restrict, sandbag, shotgun, strong-arm, urge, wrest, wring
Antonyms: let go
Somehow I don't think "Let Go-ism" is going capture hearts and minds.
Published: September 8, 2009 10:38 AM
Mike
Robert apparently does not understand the concept of wealth creation.
Published: September 8, 2009 10:42 AM
Seattle
Personally? I like the term "Austrianism" best. Started using it a few days ago, and it works wonders. This is how the conversation goes:
Me: Personally, I support Austrianism.
Person: The frell is that?
Me: It's a system where the Government doesn't help out certain individuals at the expense of everyone else. No bailouts, no corporations, no patents, etc.
Person: That sounds awesome!
I highly recommend you give it a try if people like to associate you with Bush & Pals when the economic discussions start.
Published: September 8, 2009 10:55 AM
Lord Buzungulus, Bringer of the Purple Light
An economy, free market or otherwise, without capitalism (that is, markets in producer goods at all stages of production), is primitivism. In other words, starvation, suffering, and death for the vast bulk of the population. "I Hate Me" is far too kind in his response.
Published: September 8, 2009 11:04 AM
Lord Buzungulus, Bringer of the Purple Light
Sorry, the poster I'm referring to is "I Hate You," and I agree with his comments. (I was thinking of "He Hate Me" from the old XFL.)
Published: September 8, 2009 11:07 AM
greg
I am a fan of free markets and capitalism, however it is getting hard to keep the support in place when this market dreams up another financial product to bundle and sell. Yes, I am talking about the idea to bundle life insurance policies and betting that the policy holders will bite the dust early and make a profit on the policy.
Speculation does push prices beyond expectations on the up side as well as the down. Very few of these speculators make money on the trade with the majority taking losses. But it is the increase in volume and market access to these trades that really cause wide swings, not the Fed.
Let me take gold since it has broke above $1000 today. Why the run up? You may say a fear of inflation or some idiot from the UN said the world needs a different reserve currency. And you would be right as the media has jumped on it and investors poured into GLD that pushes prices up. But few are actually accumulating gold as countries like China prefer to buy commodities they can consume like oil, copper, aluminum, coal, etc...
So basically, it is speculation and market access in GLD that is causing the run up. This over speculation will reverse and this same market access will drive it down. Again, nothing to do with the FED.
You need to read the markets by looking at the specifics. Money supply is only a small part of why markets move.
Published: September 8, 2009 11:09 AM
Barry Loberfeld
While many adherents of the Left made their peace with the poverty and tyranny of the Communist bloc, some did not, which to this day poses the question: How can these people continue to believe socialism a corrective for all the wrongs they denounce -- we can recall Ralph Miliband's classic Marxoid list of exploitation, poverty, war, imperialism, and the "crimes of the ruling classes" -- when these always exist pervasively in those People's Republics where every drop of capitalism, their hypothesized source, has been wrung from the social fabric? It's not so much that they close their eyes as it is that they avert them -- towards a sight in which they believe they find confirmation: the presence of these wrongs in the "capitalist West."
And who can deny it? Who can deny, say, the West's imperialism? But with this and the other stated evils, we must ask: What element of the semi-capitalist West was responsible -- the free market or the coercive state? In Britain, who thundered the loudest against colonialism? The classical liberal advocates of laissez faire, who condemned imperialism long before the birth of the founder of the Soviet Empire. It was the "Tory socialism" of Disraeli, not the free market, that sent British troops overseas.
And the "crimes of the ruling classes"? What were these ever but the deeds, not of truly private businessmen, but of the State? What does Ralph Nader's denunciation of "corporate socialism" concede except that the corporations owe their current privileges, not to laissez faire, but to government intervention? Which leads us to now ask: What exactly is the "capitalism" of these anti-capitalists? Is it "Little England"-ism or mercantilist imperialism? Free trade or protectionism? Laissez faire or interventionism -- A or non-A? Just as theocracy cannot denote both the union and the separation of Church and State, so capitalism cannot be both the union and the separation of Firm and State.
FULL ARTICLE
Published: September 8, 2009 11:43 AM
fundamentalist
Changing the name of the system won't accomplish anything. Capitalism is confusing today because socialists defined it first and their definition was wrong and intentionally deceitful. They began working at destroying the meaning of "free market" and "laissez-faire" a long time ago. If you look at socialist definitions of those terms you'll find that they mean no rule of law whatsoever, in other words chaos and the rule of thugs.
You can't pick a term that socialists can't destroy the meaning of. So you might as well draw the line with capitalism and battle their deceitful techniques by clearly defining capitalism whenever you use it.
Published: September 8, 2009 11:46 AM
Inquisitor
"Capitalism fails because products are sold at a profit, meaning that the buyers always have to have more money than it cost to make the products, meaning that if capitalism ever becomes a closed system it will collapse."
Fallacies never die. No, you fail because you don't know what you're talking about. Unfortunately (for you), capitalism never is nor ever will be a "closed" system. Profits (entrepreneurial) are the reward for fulfilling (perhaps unanticipated) demand. Returns on capital (probably what you mean) the result of time preference.
Published: September 8, 2009 11:55 AM
Inquisitor
"Capitalism fails because products are sold at a profit, meaning that the buyers always have to have more money than it cost to make the products, meaning that if capitalism ever becomes a closed system it will collapse."
Fallacies never die. No, you fail because you don't know what you're talking about. Unfortunately (for you), capitalism never is nor ever will be a "closed" system. Profits (entrepreneurial) are the reward for fulfilling (perhaps unanticipated) demand. Returns on capital (probably what you mean) the result of time preference.
Published: September 8, 2009 11:56 AM
Inquisitor
@ Lord Buzungulus, Bringer of the Purple Light
Awesome name. :P
Published: September 8, 2009 11:58 AM
Pssh
Capitalism fails because it's based on the idea that amoral entities like corporations will self regulate. They won't because they exist for the sole purpose of making money.
Published: September 8, 2009 12:03 PM
fundamentalist
Robert: "Capitalism fails because products are sold at a profit, meaning that the buyers always have to have more money than it cost to make the products..."
I realize that the math seems inescapable. If the money supply is fixed, how can one group gain more of it than another group without taking it away from others? The answer is too complicated to offer in a blog post. You really need to read Mises's book "Human Action". You don't have to read the whole thing. Just go to the parts on profit.
But here's a nut shell answer: all other things being equal, profits equal interest and interest is result of two things--time preference and productivity. Time preference includes the desire to save for the future. Productivity results from the fact that more capitalistic methods of production generate a greater output for the same amount of labor than less capitalistic approaches.
But even if profits equal interest and productivity, where does the money come from when the money stock is fixed? It comes from falling prices. As production increases while the money stock remains fixed, prices fall, which makes the money go farther. But prices don't fall faster than productivity or interest, so profits continue to exist.
If productivity and savings didn't exist, profits wouldn't exist either; costs would equal sales.
Pssh: "Capitalism fails because it's based on the idea that amoral entities like corporations will self regulate."
No, competition would retrain amoral entities. Capitalism fails when the guv ties the hands of the market and refuses to let it do its job of policing corporations.
Published: September 8, 2009 12:25 PM
Robert
Does this same rule apply to service rendered?
How does one place value on time?
Say it would take me 3 days to paint my house.
but i could pay person b to paint it in less time.
Who profits then?
Published: September 8, 2009 12:42 PM
Inquisitor
"Does this same rule apply to service rendered?"
It applies whenever future consumption of a good is discounted in the present.
"How does one place value on time?"
How does one value water? Or bread? Or Marxian hogwash?
"Say it would take me 3 days to paint my house.
but i could pay person b to paint it in less time.
Who profits then?"
Which has what to do with time preference, pray tell, which is the concept of how heavily an individual discounts future consumption in the present? Nothing? Coolio.
Published: September 8, 2009 12:50 PM
Inquisitor
"
Capitalism fails because it's based on the idea that amoral entities like corporations will self regulate. They won't because they exist for the sole purpose of making money."
Hence we need "moral" entities like the State or the commune or whatever to step in or subsitute free market interactions right? Wrong. YOU fail because you, like Robert, are ignorant of how market self-regulation functions. Seriously, did you people just graduate from clown school?
Published: September 8, 2009 12:52 PM
Inquisitor
Oh, and by the way, who profits? Always both parties to an exchange engage in it in expectation of psychic profit. What Robert means is not "profit" but returns on capital. Profit in economics designates an entrepreneurial phenomenon due to market disequilibrium, returns on capital a more static phenomenon arising due to TP. An education. I haz it.
Published: September 8, 2009 12:56 PM
Pssh
One point I'm trying to make, I guess, Is that it all comes down to a moral decision. This is when alot of the "SOCIAL DARWINISM LOL IM SO BIG CUZ I THINK WEAK PEOPLE SHOULD DIE BECAUSE THEY ARE INFERIOR BEINGS" types rear their ugly heads, because they place no value on human life. (probably because they are just tough guys or are greedy pigs). Things like socialized medicine and the like, making sure companies can't make obscene profits at the cost of human life far down the chain of power, ect, are all in the end based on the moral fiber of a sociaty, not how good it is at math.
A pure capitalism only gives a human life as much worth as the person's marketable skills. It's entire backbone is based off of this greedy hivemind that makes the quality of life HORRIBLE.
Published: September 8, 2009 1:12 PM
Tom Woods
Pssh writes: "Capitalism fails because it's based on the idea that amoral entities like corporations will self regulate. They won't because they exist for the sole purpose of making money."
Apparently it's cliche day. What do you mean by "self regulate"? What do you think we mean by it (assuming we'd use such a clumsy term)? If a corporation commits a crime, in a genuine free market it would be punished. That leaves satisfying the consumer as the only way for a corporation to make money. Stop buying their product, and you strangle them.
That's more than you can say for the state, which you by implication propose to be a wonderful institution that keeps us free from predators. Nice try. The state is the predator.
Published: September 8, 2009 1:15 PM
Pssh
"Self regulation"
Are you retarded? The market never regulates itself you idiot, why do you think the only time the economy hasn't crashed under a conservative was Reagan who tripled the national debt just like Obama.
A free-market has been neither relevant nor useful in over a hundred years.
Published: September 8, 2009 1:16 PM
Tom Woods
Now our friend Pssh attempts to account for economic downturns without any reference to the Federal Reserve, which is pretty typical of so-called progressives.
Yes, Pssh, I know how "horrible" the standard of living is now as compared to 100 years ago. How I wish we could still have infant mortality ten times as high, or no real communication systems, or primitive transportation. I, too, long for these things.
Back to reality. Today even the lowest of the low has a cell phone, which allows him to speak to someone in Bulgaria at the touch of a button, from absolutely anywhere. The vast majority have air conditioning, their own car, adequate nutrition, etc., an achievement no one 300 years ago would even have thought possible. Normal people consider this a good thing.
And incidentally, where on this planet do you find the poor population to be least materially deprived? That's right, in the most market-oriented societies. So quit pretending you're actually interested in improving people's standard of living. You couldn't possibly be. Maybe you enjoy wielding power over people; I don't know. But you absolutely are not interested in people's material well-being.
One thing you are good at, though, and I'll give you this much: you have memorized what you learned in seventh grade just perfectly. Market evil, government good, etc. Super.
Published: September 8, 2009 1:24 PM
Seattle
Pssh:
That's not really how it works at all.
The idea is no one is *entitled* to anything. If you can manage to feed yourself, fantastic! If you can't, too bad. Attempts to enforce "quality of life" not only hurt everyone else, but are ultimately flawed and impossible due to the laws of economics.
Do I wish it were another way? Of course I do. Almost everyone does (and it is this reason Socialism is so popular an idea). It's unfortunate, but that's life. The only long-term, reliable way to feed everyone is to use market processes to drive down the cost of food.
(This doesn't even bring in the argument that the reason corporations are allowed to be so disregardful of everything because the State gives them legal protection, and that's another can of worms.)
Published: September 8, 2009 1:26 PM
Inquisitor
"One point I'm trying to make, I guess, Is that it all comes down to a moral decision. This is when alot of the "SOCIAL DARWINISM LOL IM SO BIG CUZ I THINK WEAK PEOPLE SHOULD DIE BECAUSE THEY ARE INFERIOR BEINGS" types rear their ugly heads, because they place no value on human life. (probably because they are just tough guys or are greedy pigs)."
I value free markets because I value life. So, spare the strawmen for those who place high value on nonsense.
"Things like socialized medicine and the like, making sure companies can't make obscene profits at the cost of human life far down the chain of power, ect, are all in the end based on the moral fiber of a sociaty, not how good it is at math."
Actually a gov't controlled system fails whether it is socialist (in which case it faces calculational chaos and excludes many from healthcare in spite of its claims to being "universal") or fascist (in which case it privileges a few corporations and cartelises the industry in their favour - this is what you refer to as 'capitalist'). Both wings are a false dichotomy.
"A pure capitalism only gives a human life as much worth as the person's marketable skills. It's entire backbone is based off of this greedy hivemind that makes the quality of life HORRIBLE."
My, did you attend the School of Amateur Histrionics per chance?
"Are you retarded? The market never regulates itself you idiot, why do you think the only time the economy hasn't crashed under a conservative was Reagan who tripled the national debt just like Obama."
Mind tying those non sequiturs together? Regurgitating "liberal" propaganda curries no favour with me.
"A free-market has been neither relevant nor useful in over a hundred years."
Due to fools like you eroding it, it has not been too relevant. Useful? It's the only thing saving us from the decay that attends the implementation of socialism/fascism.
Published: September 8, 2009 1:28 PM
Pssh
There's stupid and then there's outright insane and you've crossed that line.
In a genuine free market corporations get punished? NOTHING happens to a corporation in a free market, did you just fall asleep when they were talking about the first 150 years of U.S. history or are willfully ignoring the kinds of abuses companies commit in countries with lightly regulated economies?
A bunch of 10 year old Pakistani kids getting their fingers cut off in machinery is what a free market results in.
Published: September 8, 2009 1:28 PM
Inquisitor
Pssh, upon further analysis I have realised you are hopeless. You do not wish to deal with what is proposed here, no, rather you wish to regurgitate mindless histrionics inapplicable to free markets and sob stories. And pray tell, in what world are corporations not punished for their misdeeds at present, barring some cases which get "bailed" out or shielded from their actions by the government (a socialist way of providing law and order)?
Published: September 8, 2009 1:34 PM
Pssh
"I value free markets because I value life. So, spare the strawmen for those who place high value on nonsense."
Wait, so you complain about strawman arguments and then come back with a gigantic one.
"Actually a gov't controlled system fails whether it is socialist (in which case it faces calculational chaos and excludes many from healthcare in spite of its claims to being "universal") or fascist (in which case it privileges a few corporations and cartelises the industry in their favour - this is what you refer to as 'capitalist'). Both wings are a false dichotomy."
Hence the reason the euro is becoming the world reserve currency and the only time the economy hasn't crashed under a conservative was Reagan who also tripled the national debt like Obama. Explain why your policies have failed everytime you've tried them. Lessening government regulation didn't work under either Bushes, Nixon, Hoover, hell all the way back to Jackson they still weren't functional.
"Mind tying those non sequiturs together? Regurgitating "liberal" propaganda curries no favour with me."
So I come back with facts, and all you can come back with is some bullshit ad hominem, yep you're a conservative. Explain why the economy has crashed EVERYTIME we've removed regulation from it.
"Due to fools like you eroding it, it has not been too relevant. Useful? It's the only thing saving us from the decay that attends the implementation of socialism/fascism."
Yes socialism is bad, which is why every other first world country on earth is what you would consider socialist.
Published: September 8, 2009 1:41 PM
mpolzkill
"Pssh",
A question for you. First, I'll make sure we have the same premise: I50 years ago there was a small fraction of the world's total population and a far greater percentage of that population had to work far harder and far longer on any given day to sustain themselves. You agree, correct? OK, if so: to what do you accredit this wonderful change in the life of the average human? (if you are a population control advocate, for my question please imagine that you are first in line to be culled)
Published: September 8, 2009 1:43 PM
Inquisitor
"Wait, so you complain about strawman arguments and then come back with a gigantic one."
Demonstrate it.
"Hence the reason the euro is becoming the world reserve currency and the only time the economy hasn't crashed under a conservative was Reagan who also tripled the national debt like Obama. Explain why your policies have failed everytime you've tried them. Lessening government regulation didn't work under either Bushes, Nixon, Hoover, hell all the way back to Jackson they still weren't functional."
You're not listening, are you? Did Reagan abolish central bank control of the interest rate? Did Bush? DId Nixon? Did Hoover, the so-called laissez-faire president (a myth debunked by authors on this site)? No? So having a Czar of the financial industry is a "free market" to you? I suggest you get a clue.
"So I come back with facts, and all you can come back with is some bullshit ad hominem, yep you're a conservative. Explain why the economy has crashed EVERYTIME we've removed regulation from it."
No, you don't come back with facts. You come back with ever more irrelevancies and tangents. Removed WHAT regulation? Some meaningless limits on how much banks can extend credit or what kind of products they may offer their clients? Or is the underlying problem price control over the interest rate? I wonder...
"Yes socialism is bad, which is why every other first world country on earth is what you would consider socialist."
After originally being laissez-faire, and then deciding to erode its wealth by the adoption of socialist policies, hence we now have "maturing" welfare states that are gradually stumbling over their own rotting feet.
Surely you see the futility of it all.
Published: September 8, 2009 1:50 PM
Barry Loberfeld
Orthodox Marxism cynically -- amorally -- rejected the possibility of neutrality and equity in political matters. All government was the special interest of one "class" or another. Just as capitalism ushered in the rule of the bourgeoisie, so would socialism bring about the "dictatorship of the proletariat." But how does capitalism -- that is, the free market -- represent the special interest of "capitalists" (i.e., nonmanual laborers)? If respect for property rights favors "capitalists," then why do corporations seek subsidies (each for its own self, mind you, not for the entirety of its purported "class")? If unregulated commerce leads to monopolization by these "capitalists," then why do real-world businessmen turn to government to provide them with monopoly entitlements (optimally, only for their own company, not for all "capitalists" including their competitors)? And if free trade benefits this class and no other, then why do each country's business leaders -- and union members -- lobby for tariffs on imports? We seem to forget that the classical liberals formulated their principles of private property, laissez faire, and free trade -- rejected by the Left and Big Business alike -- not against the graspings of the have-nots, but in opposition to policies that favored the few over the common good. All of the classic Marxoid evils existed before the advent of liberal capitalism, which arose specifically to eliminate them -- and did so most impressively. Social scientist Thomas Sowell sums up capitalism's economic and political contributions by the end of the nineteenth century:
He laments: "The high hopes and expectations with which the twentieth century began gave no inkling" of what was to come -- the abandonment of limited government and the adoption, the bloody rise, of unlimited statism, most notably (in various forms) that of Marx, whose attributing of ancient evils to the emergent liberal order (and its "sham-liberty") was as absolutely insane as attributing polio to the Salk vaccine.
Equally mad are those Marxists who point to the very real problems of partial statism ("state capitalism") but then perversely propose a tried-and-false "solution" -- total statism (socialism) -- that would only exacerbate those problems. It's as if having recognized the danger of drinking polluted water but misidentifying the dangerous element, the Left advocated consumption of the undiluted pollutant. The failings of the mixed economy don't confirm but confute the claims of socialism. It is the State, not the free market, that doles out political privileges -- whether to the nomenklatura or the corporations. And it is the State that condemns whole populations to poverty -- as witness activist Russell Means' comparison of Native Americans, our country's most socialized community, to the citizens of the Soviet Empire.
In the conflict between monopoly statism and the many organs of the body social (i.e., of a free people), the Left habitually made the malignant choice.
FULL ARTICLE
Published: September 8, 2009 1:52 PM
Pssh
"Demonstrate it.
'I value free markets because I value life. '
'You're not listening, are you? Did Reagan abolish central bank control of the interest rate? Did Bush? DId Nixon? Did Hoover, the so-called laissez-faire president (a myth debunked by authors on this site)? No? So having a Czar of the financial industry is a "free market" to you? I suggest you get a clue."
Abolishing central bank control? Holy shit did you just quit advancing after 1835 or something? That policy crashed under Jackson. And did they not remove tons of regulation over the market? So then what's your point?
"No, you don't come back with facts. You come back with ever more irrelevancies and tangents. Removed WHAT regulation? Some meaningless limits on how much banks can extend credit or what kind of products they may offer their clients? Or is the underlying problem price control over the interest rate? I wonder..."
Wat? Gutting the SEC, busting unions, paving the way for outsourcing, and allowing wall street to run wild wasn't deregulation? Are you retarded?
"After originally being laissez-faire, and then deciding to erode its wealth by the adoption of socialist policies, hence we now have "maturing" welfare states that are gradually stumbling over their own rotting feet."
http://www.xe.com/ucc/
And again more factless bullshit.
Published: September 8, 2009 2:03 PM
Duncan
"A bunch of 10 year old Pakistani kids getting their fingers cut off in machinery is what a free market results in."
If the employees have consented to their employment, then it is because they value the benefits of that employment more than lowering the risk of losing a finger. Safety is a need of individuals just like any other; its priority relative to other needs is something that the individual must determine according to his/her circumstances.
If Government intervenes to require employers to attain a certain level of safety that it, rather than the employees, mandate as a condition of employment such attainment comes at an extra cost to the employer which does nothing to increase the value of employment in the eyes of the employees.
The result is that the employer has less capital to fund his business, expansion is retarded, fewer people are employed and less wealth is created.
The only way to increase the ability to fund what individuals, in their own analysis, determine to be less important needs is to increase wealth so that these needs become affordable; Government intervention merely diverts resources from what those individuals determine to be more pressing needs.
Published: September 8, 2009 2:05 PM
Inquisitor
"'I value free markets because I value life. '"
Whose position have I strawmanned, pray tell? You are not taught logical reasoning at Uncle Bob's Academy of Clowns?
"Abolishing central bank control? Holy shit did you just quit advancing after 1835 or something? That policy crashed under Jackson. And did they not remove tons of regulation over the market? So then what's your point?"
No, I know nothing of "that" policy with such a lack of specificity other than your assertion regarding it. Removing "tons" of regulation =/= an unregulated system, nor for that matter a free market (which is self-regulated, like it or not.)
"No, you don't come back with facts. You come "Wat? Gutting the SEC, busting unions, paving the way for outsourcing, and allowing wall street to run wild wasn't deregulation? Are you retarded?"
No, merely confronting you with actual facts you wish to rather avoid, such as the existence of the central bank causing these crises by price-controlling the interest rate... For every regulation you point to that was removed there are countless more still in place, many enabling banks to act recklessly (control over interest rates, the FDIC, institutions like FNM and Freddie Mac, TARP &c. &c. &c.) Get real.
"And again more factless bullshit."
Gee, why didn't I think of that, a currency convertor! I must admit defeat now! Wait, no... the value of paper money issued by gov't banks proves little to nothing except how ignorant you are of the history of most "first world" countries.
Published: September 8, 2009 2:12 PM
K Ackermann
It would have been nice if a link to Žižek's comments was provided for context, because from what I've seen of him, he is not some puffed up bag of wind spouting populist falsehoods.
Maybe he was using Capitalism in the popular sense, though. Wall Street is welded to the word Capitalism, and that drags a lot of baggage with it. The SEC has no idea about the damage they did when they looked the other way with Madoff.
Harry Markopoulos testified that all the analysts he talked to in the marquee firms said they wouldn't touch Madoff with a ten-foot pole. This was years before the bust, and it was common knowledge.
Capitalism has got to watch the store. It keeps throwing money at Washington to obtain special status, and when it fights to remove oversight, then it better well set examples of what happens to people and corps who game the system.
Published: September 8, 2009 2:18 PM
Michael A. Clem
Wat? Gutting the SEC, busting unions, paving the way for outsourcing, and allowing wall street to run wild wasn't deregulation? Are you retarded?
I don't know if you can call those "deregulation" or not, but it IS possible to have deregulation that still doesn't allow a free market to work. Giving businesses more privileges without the corresponding responsibilities isn't a free market solution. The Savings and Loan crisis of the 1980s would be an example. S&L's were given more freedom to invest in a wider variety of securities, but were still protected from bad consequences by the FSLIC (or taxpayers, ultimately, since the FSLIC didn't have nearly enough to cover it all). Not surprisingly, they were quite willing to make a lot of risky investments. In a free market, you have to have both the right and the responsibility for your actions--you suffer from bad consequences and either fix your mistakes or go out of business. Government has trouble doing that for businesses, because if they did, they wouldn't really be doing anything. And people like you absolutely demand that government Do Something, no matter how wrong it may be, or what unintended consequences occur.
Furthermore, name any president, and history will show that they enacted plenty of regulations, whatever 'deregulation' they may have also passed. Democrat or Republican, government has gotten progressively larger over time.
Published: September 8, 2009 2:21 PM
Inquisitor
http://mises.org/freemarket_detail.aspx?control=478
http://mises.org/journals/scholar/trask1.pdf
Gee, so much for that.
Published: September 8, 2009 2:22 PM
Barry Loberfeld
From WHAT'S REALLY REACTIONARY?:
Mythologized as the "Progressive Era," when the Little Man and his (self-anointed) champions rose up to bridle the "economic power" of Big Business, this was actually -- in the phraseology of Gabriel Kolko -- a "triumph of conservatism," wherein the established "business and financial interests" sought to fend off upstart competitors by resorting to reactionary means: government intervention in the economy.
The "departure from orthodox laissez faire" is by and large the only part of the myth that was true. Instead of a handful of cephalopod monopolies using their "economic power" to constrict competition, the "dominant tendency in the American economy at the beginning of [the twentieth] century was toward growing competition," which the older corporations could not stop -- without political favoritism, that is. So "it was not the existence of [free-market] monopoly that caused the federal government to intervene in the economy, but the lack of it." The new state regulatory bodies and their decisions were "invariably controlled by leaders of the regulated industry, and directed toward ends they deemed acceptable or desirable ... [mostly] because the regulatory movements were usually initiated by the dominant businesses to be regulated," e.g., the Interstate Commerce Commission and the railroad industry (and over the decades many others, such as the Food and Drug Administration and the pharmaceutical industry, the Securities Exchange Commission and the securities industry, the Federal Communications Commission and the various communication fields, the Civil Aeronautics Board and the airline industry, etc.). In addition, there were the huge subsidies, e.g., money and land to the railroads -- as well as the high protectionist tariffs, since, as the New York Times soon grasped,
And the Progressive Era's patrimony to the present age? We can assign a contemporary "progressive" -- Ralph Nader -- the task of "restatement of the obvious":
One cannot help but wonder if the learned Mr. Nader ever stumbled across Progressive stalwart John Dewey's definition of democracy: "[T]hat form of social organization, extending to all areas and ways of living, in which the powers of individuals shall ... [be] directed" -- by the State. In any case, "Progressivism was," concludes Kolko, "... a movement that operated on the assumption that the general welfare of the community could be best served by satisfying the concrete needs of business" -- a familiar Old World theme. Regress is Progress -- an Orwellianism for the New World in the new century.
Published: September 8, 2009 2:23 PM
Mrhuh
"A bunch of 10 year old Pakistani kids getting their fingers cut off in machinery is what a free market results in."
That's funny since many of those kids would probably be raped and then starved to death in some full-blown socialist country like North Korea.
"Lessening government regulation didn't work under either Bushes, Nixon, Hoover"
Actually both Bushes increased regulatons, especially in health care. Nixon was a huge inflationist who implemented numerous price controls and himself is the one who created affirmative action and officialy took the U.S. off the gold standard. As for Hoover. You're kidding me. Hoover helped prop up minimum wage laws after the stock market crashed, implemented farm controls, and passed the Smooth-Hawley tariff act. Have you even read Hoover's inauguratiion address. He condemned the idea of laissez-faire individualism in it. Try reading up on the actual policies of the presidents whom you support and not just the rhetoric they used. You might be rather surprised.
Published: September 8, 2009 2:23 PM
mpolzkill
Inquisitor,
Nice points. What else seems to be scarcely considered by admirers of European socialism is that the U.S. engages in a massive socialist program: their military. When the U.S. collapses because of this particular form of socialism, we will see how our more dreamy socialist cousins across the Atlantic do without their guardians.
Published: September 8, 2009 2:23 PM
Pssh
>Whose position have I strawmanned, pray tell? You are not taught logical reasoning at Uncle Bob's Academy of Clowns?
Dear god you are just trolling right?
"No, I know nothing of "that" policy with such a lack of specificity other than your assertion regarding it. Removing "tons" of regulation =/= an unregulated system, nor for that matter a free market (which is self-regulated, like it or not.)
"No, merely confronting you with actual facts you wish to rather avoid, such as the existence of the central bank causing these crises by price-controlling the interest rate... For every regulation you point to that was removed there are countless more still in place, many enabling banks to act recklessly (control over interest rates, the FDIC, institutions like FNM and Freddie Mac, TARP &c. &c. &c.) Get real."
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
You dance around actual facts and can only come back with lame ass strawman.
Oh and
FREDDIE AND FANNIE OWNED LESS THAN 1/10 OF THE CREDIT MARKET.
"Gee, why didn't I think of that, a currency convertor! I must admit defeat now! Wait, no... the value of paper money issued by gov't banks proves little to nothing except how ignorant you are of the history of most "first world" countries."
Economy of the European union vs the economy of the united states.
GDP growth rate for the EU:3.1%
GDP growth rate of the U.S:-3.9%
Unemployment for EU:over 9000%
Unemployment for US:9.over 9000%
Exports for EU:$1.33 trillion
Exports for US: $1.283 trillion
Public debt for EU:over 9000,240 trillion
Public debt for US:$11.4 trillion
See, that's what I mean by backing your point up with actual facts.
Published: September 8, 2009 2:26 PM
mpolzkill
Inquisitor,
Nice points. What else seems to be scarcely considered by admirers of European socialism is that the U.S. engages in a massive socialist program: their military. When the U.S. collapses because of this particular form of socialism, we will see how our more dreamy socialist cousins across the Atlantic do without their guardians.
Published: September 8, 2009 2:26 PM
Tom Woods
Gutting the SEC, Pssh? Are you joking? Both funding and personnel have skyrocketed, even under Bush, whom I assume you consider "laissez-faire." What regulations were reduced under Hoover, may I ask? That would be a fun one to hear.
What role does the Federal Reserve play in all this, Pssh? Any idea at all?
And yes, I know, if it weren't for the free market, everyone everywhere would enjoy wonderful working conditions. Poor working conditions result from corporations' advantage in bargaining power, etc. They have nothing whatsoever to do with the incredibly low productivity of labor in developing countries.
Published: September 8, 2009 2:27 PM
Mike
What's sad is that Pssh really seems to honestly have no idea how wrong he is and how badly he's being out-debated. You guys put forth a solid effort that will hopefully enlighten many a lurker like me, but I have to agree with Inquisitor in his 1:34 PM comment.
Published: September 8, 2009 2:30 PM
Inquisitor
"Dear god you are just trolling right?"
No, I am applying acid to a troll. You.
"You dance around actual facts and can only come back with lame ass strawman."
Be a gentleman and go first.
"FREDDIE AND FANNIE OWNED LESS THAN 1/10 OF THE CREDIT MARKET."
Still doesn't undo all the other regulations and distortions in place, now does it? Neither does your link. You are just throwing in "deregulations" to make it seem as if it, magically, caused a crisis when central banks and a host of other gov't enacted regulations and protections regulate and control the financial system.
""Economy of the European union vs the economy of the united states.
GDP growth rate for the EU:3.1%
GDP growth rate of the U.S:-3.9%
Unemployment for EU:over 9000%
Unemployment for US:9.over 9000%
Exports for EU:$1.33 trillion
Exports for US: $1.283 trillion
Public debt for EU:over 9000,240 trillion
Public debt for US:$11.4 trillion
See, that's what I mean by backing your point up with actual facts."
Which don't really back up your position because 1) they reveal nothing about how these statistics are accounted for 2) are aggregates that ignore the actual state of various markets (e.g. GDP counts gov't spending, wasteful though it may be, as economic activity) 3) half the numbers you cited are missing and/or incorrect and 4) reveal nothing about the underlying health of individual EU states which have hugely disparate economies in some cases. Throwing "facts" at people without analysing what they mean or how they came to be or what they tell you is puerile, at best.
Stick to your "capitalism sux" mantra, it requires the expenditure of fewer brain cells.
Published: September 8, 2009 2:33 PM
Pssh
"No, I am applying acid to a troll. You.
Be a gentleman and go first."
"Still doesn't undo all the other regulations and distortions in place, now does it? Neither does your link. You are just throwing in "deregulations" to make it seem as if it, magically, caused a crisis when central banks and a host of other gov't enacted regulations and protections regulate and control the financial system."
The act removed regulation that went all the way back to the 30's and effectively turned the banking system to where it was right before the depression hit, yes it did.
"Which don't really back up your position because 1) they reveal nothing about how these statistics are accounted for 2) are aggregates that ignore the actual state of various markets (e.g. GDP counts gov't spending, wasteful though it may be, as economic activity) 3) half the numbers you cited are missing and/or incorrect and 4) reveal nothing about the underlying health of individual EU states which have hugely disparate economies in some cases. Throwing "facts" at people without analysing what they mean or how they came to be or what they tell you is puerile, at best."
Oh dear christ
http://www.imf.org/external/pubs/ft/weo/2005/02/data/dbaoutm.cfm?SD=2002&ED=2006&R1=1&R2
=1&CS=5&SS=2&OS=C&DD=0&OUT=1&C=998&S=NGDP_RPCH-NGDPD-NID_NGDP-NGSD_NGDP-
PPPWGT-PCPIPCH-GGB_NGDP-BCA_NGDPD-BCA&CMP=0&x=30&y=16
https://www.cia.gov/library/publications/the-world-factbook/geos/us.html
You're already resorting to the "HURRR ALL FACTS ARE BIASED" defense by conservatives? Nevermind arguing with you is pointless.
Published: September 8, 2009 2:48 PM
Barry Loberfeld
A simple time-line of government involvement in the mortgage industry:
http://www.americanthinker.com/2008/10/what_really_happened_in_the_mo.html
Published: September 8, 2009 2:54 PM
Inquisitor
"The act removed regulation that went all the way back to the 30's and effectively turned the banking system to where it was right before the depression hit, yes it did."
Even if I were to assent to your post hoc reasoning, it'd leave a huge gap - what caused the Great Depression. Austrians have a solid business cycle theory, and the conditions under which it obtains have been fulfilled. You, and most leftists, have the "deregulation" mantra offering no real causal argument as to why this may spark a boom and subsequent bust. It still does not address the matter of whether a) there was still remaining regulation impacting the market severely b) whether the deregulation that took place allowed for conditions that would obtain on a free(d) market and c) why one should expect deregulation to cause such things (aside from magical thinking.)
"You're already resorting to the "HURRR ALL FACTS ARE BIASED" defense by conservatives? Nevermind arguing with you is pointless."
Incorrect. I am resorting to the "you haven't the faintest idea what the facts you are pointing to concern" 'defence' (I am not on the defensive here qua proponent of non-aggression, rather you are, little statist.) And you're right, it is pointless; hence I alluded to the futility of it all. I reiterate every single point I made minus the one concerning the accuracy of your transcription.
Published: September 8, 2009 3:04 PM
matskralc
An over 9000% unemployment rate? Wow, things are worse than I thought!
Published: September 8, 2009 4:15 PM
RWW
The best sign of an ignorant troll in Mises Blog comments is the use of the word "conservative" as Mr. Pssh has used it. How are we to take someone seriously who doesn't even know whom he is talking to?
Published: September 8, 2009 7:50 PM
Tim
I once had an argument with a creationist. Vainly did I try to educate him about the existence of transitional fossils and the mechanism of natural selection - he told me that dinosaurs walked hand in hand with Jesus and that the t-rex ate grass. This is very similar.
Published: September 8, 2009 8:02 PM
Mike
Like, dude, there are no transitional fossils because, like dude, you haven't given me a complete unbroken lineage between you and monkeys.
Published: September 9, 2009 1:01 AM
Stephan Kinsella
Brad:
While I tend to agree "capitalism" is not the best term for libertarianism, if only because it is too narrow, it is clearly compatible with and an essential feature of any non-primitive free market, since it means private ownership of the means of production.
But we should not waste time on semantics, contra Brad. We should accurately describe what we are for and fight for it on those grounds.
Published: September 9, 2009 2:02 AM
fundamentalist
Tim: "Vainly did I try to educate him about the existence of transitional fossils...."
Transitional fossils are extremely rare. See "Bones of Contention" by Roger Lewin, who is an evolutionist. Also, pick up any high school text on evolution and you'll find all kinds of excuses for the lack of transitional fossils.
Published: September 9, 2009 8:03 AM
fundamentalist
PS, the sole reason for the invention of the theory of puntuated equilibrium was the lack of transitional fossils.
Published: September 9, 2009 8:05 AM
mushindo
fundamentalist
'PS, the sole reason for the invention of the theory of puntuated equilibrium was the lack of transitional fossils.'
No, this is a lie put about by dishonest creationist polemicists.
Punk ec. is in fact the explicit recognition of a dynamic relationship between the rate of environmental change, and the rate of change among the organisms which survive those changes. Stable environment with little change means variations tend to be disadvantageous and die out as soon as they arise. Catastrophic change leaves few organisms as survivors and a new landscape abounding with unexploited niches, so the variation among those few will more frequently be advantageous and seed divergent offspring. Hence the single-species survivor diversifies into different niches much more quickly.
still, bit off-topic, what?
Published: September 9, 2009 11:20 AM
mushindo
Mushindo: "Punk ec. is in fact the explicit recognition of a dynamic relationship between the rate of environmental change, and the rate of change among the organisms which survive those changes."
Wikipedia: "Eldredge and Gould proposed that the degree of gradualism commonly attributed to Charles Darwin was virtually nonexistent in the fossil record, and that stasis dominates the history of most fossil species...Prior to the Eldredge and Gould paper, Niles Eldredge published a 1971 paper in the journal Evolution suggesting that gradual evolution was seldom seen in the fossil record and argued that Ernst Mayr's preferred mechanism might suggest a possible resolution."
You can spin it any way you want to, but the major emphasis in evolutionary theory of the past 30 years has been how to explain the large gaps in the fossil record. Those explanations are eerily similar to "the dog ate my homework." Most people get hung up on whether or not the dog ate the homework rather than the fact that the homework doesn't exist.
Published: September 9, 2009 12:08 PM
mushindo
Truth is never off topic. The relationship of Austrian econ to mainstream econ is much more like that of creation science to mainstream science. Austrian econ and creationism both claim to be sciences and both are ignored by the mainstream paradigms, not because their science is bad, but because they aren't part of the club. Prejudice has more to do with their rejection than anything. And the major debating technique used against both by the establishment is ridicule.
Published: September 9, 2009 12:13 PM
Lee
The Austrian school is useful within the limits of a monetary system in general. But it ignores that the monetary system has a much greater fallacy involve ecology than economics.
Published: September 9, 2009 12:30 PM
Lee
There are bigger issues with scarcity that aren't taken into account in just about any monetary system, even the Austrian's ideal one. There is no substitute for ecological wisdom. For example, the inability to count all the externalized costs because some of them can't even be quantified at all and others can't be recognized until far into the future.
Published: September 9, 2009 12:42 PM
Mushindo
Let it be known that the words 'Truth is never off topic. ..............by the establishment is ridicule (12.13)', were emphatically not posted by me.
To whoever it is trying to attribute such inanities to me, I don't know what your game is, but it is certainly unethical if not downright dishonest.
Published: September 9, 2009 1:13 PM
fundamentalist
Mushindo: "To whoever it is trying to attribute such inanities to me, I don't know what your game is, but it is certainly unethical if not downright dishonest."
That was me. I don't know how that happened. Sorry.
Published: September 9, 2009 1:33 PM
fundamentalist
Kinsella: "But we should not waste time on semantics, contra Brad. We should accurately describe what we are for and fight for it on those grounds."
I agree. Distorting the meaning of a word is the chief technique of socialists. So whether you use "capitalism" or any other term, socialists will immediately distort the meaning of it and you'll find yourself always defining your terms. We should stick with one term, define it, defend it, and always, always point out the dishonest techniques of socialists every opportunity we get.
I happen to like the term "capitalism" because the Austrian theory of capital is the main element that distinguishes that school from any other school of econ. Also, the path to economic develop requires more capitalistic methods of production. The Austrian theory is all about capital and its importance.
Published: September 9, 2009 1:43 PM
Right
If you work with a market/economic system, you are working with a chaotic system that is effectively unpredictable and can't be predicted with current computing approaches. You may as well go play at the casino. Strangely, the share market is little more than a global casino
Published: September 9, 2009 3:02 PM
Vanmind
So, Right, what exactly about the universe has ever been predictable, and can such phantom predictability be forced upon people -- you know, just for the pretense of acting like a big shot planner? I ask because of the impoverishment & genocide that tends to originate from Ivory Tower monsters masquerading as intellectuals-with-a-plan.
Published: September 9, 2009 6:54 PM
Michael A. Clem
There is no substitute for ecological wisdom. For example, the inability to count all the externalized costs because some of them can't even be quantified at all and others can't be recognized until far into the future.
Even if we assume, for the sake of argument, that some costs cannot be internalized, that still doesn't hold that economically ignorant politicians and bureaucrats can do a better job of identifying them and coming up with an appropriate corrective policy. If these costs are recognized by people, even just a few people, then the market can adjust accordingly, because the market is nothing more than everybody deciding what they want to purchase or not purchase. If these costs are not recognized by anybody, then I don't see any solution whatsoever, market, government, or other. You can't deal with something that has never been recognized. So, Lee, are you talking about recognizable costs or mythical costs?
Published: September 10, 2009 11:41 AM
Peter Sidor
Solid article!
(Note: "The role of government in a capitalist society is very simple: provide transparency and enforce fraud." - 'enforce' might not be the right word here, at least in this context. ;) )
Published: September 11, 2009 5:40 AM
Nick Scipione
@Peter - Thanks for the catch!
Published: September 11, 2009 8:33 AM
Peter
No, this is a lie put about by dishonest creationist polemicists.
Yes; link them here, but don't expect creationists to see evidence when it's placed before them :(
Published: September 14, 2009 11:11 PM