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News & ArtsTuesday, July 31, 2012
Economy Capitalism's Capitalism Problem
Posted by Charles Mudede on Tue, Jul 31, 2012 at 9:01 AM
To begin with, the image that goes with Charles Murray's essay on how wonderful capitalism has been for the human race, is all of white (mostly rich) males and one of an Asian female worker. Once you get over that, you have to read nonsense like this:
Everything else the government does inherently restricts economic freedom to act in pursuit of earned success. I am a libertarian and think that almost none of those restrictions are justified. But accepting the case for capitalism doesn't require you to be a libertarian. You are free to argue that certain government interventions are justified. You just need to acknowledge this truth: Every intervention that erects barriers to starting a business, makes it expensive to hire or fire employees, restricts entry into vocations, prescribes work conditions and facilities, or confiscates profits interferes with economic liberty and usually makes it more difficult for both employers and employees to earn success. You also don't need to be a libertarian to demand that any new intervention meet this burden of proof: It will accomplish something that tort law and enforcement of basic laws against force, fraud and collusion do not accomplish.But what about, say, the environment? You just can't have people doing stuff that makes money but ruins the commons (air, trees, water). You can't have a world without some kind of governing body that manages and protects the commons against self-interested individuals. What kind of world do libertarians live in?
2
They believe every problem they make is simply a job/opportunity for someone else on the market. Think Zorg from the Fifth element. Without destruction, there's no need for industry.
Even healthy forests need to go through fires, in their minds.
Even healthy forests need to go through fires, in their minds.
3
Ugh.
If I ever ran into some huge fortune, I would love to by a huge island for them, and then watch their libertarian experiment fail spectacularly.
Super bonus joys if I could have it filmed reality TV style.
If I ever ran into some huge fortune, I would love to by a huge island for them, and then watch their libertarian experiment fail spectacularly.
Super bonus joys if I could have it filmed reality TV style.
4
Libertarians, like most people, live almost entirely inside their own heads, which are embedded within their own asses. They are the turducken of political philosophy.
5
This is an attitude that bugs me about libertarianism because it often assumes that businesses will behave well if the regulations are taken away from them. But often bad behavior isn't simply the result of over restrictive rules, it's the result of stiff competition and the need to get ahead of the competition, whether that means paying people off the books or otherwise taking advantage of vulnerable populations/structures.
6
To me, Libertarians are the mirror image of Marxists: The Libertarian argues that capitalism cures all, the state is the cause of all ills; the Marxist argues that the state cures all, capitalism is the cause of all ills. If you ask what world libertarians live in, you might as well ask what world Marxists live in. It's the world of philosophical purity despite the practical realities of the real world.
7
Or take evolution. Evolution has been an inexorable force for the expansion and improvement of species* since life began. Every intervention in evolution erects barriers to that ultimate good.
So if your dog is sick, sit back and watch it die. And rejoice! Evolution wins!
So if your dog is sick, sit back and watch it die. And rejoice! Evolution wins!
9
What kind of world do libertarians live in?
I ask this all the time, and the answer never approaches reality. To borrow only from the excised portion above, it is apparently a world where:
-All taxes are confiscations, period.
-All regulations are restrictions. (An unfounded, subtle manipulation of a qualifier. They are never protections, for example.)
-"Economic liberty" is the sine qua non of all that is good and just.
-The coercive power of the relatively wealthy is negligible and/or non-existent. That is, "economic liberty" totally includes the well being of workers *wink* *wink.*
His closing test of what makes a reasonable restriction sounds fine in theory; but as we all know, the unspoken conclusion among Libertarians is always, "therefore be a greedy dick whenever possible."
10
I guess libertarians live in a world without con men, hustlers, fraud, liars, cheats, thugs and thieves. They also seem to have forgotten the real economic history of America, 1880-1930. It was dominated by the aforementioned classes of people, hence the laws that dictate how business is conducted in this country.
11
An adolescent fantasy world,
But if the Libertarian view is correct, then why are places like Western Europe, Canada, Japan or New Zealand so much better places to live than Somalia?
But if the Libertarian view is correct, then why are places like Western Europe, Canada, Japan or New Zealand so much better places to live than Somalia?
13
Well there actually ARE liberterian areas in the world as of this minute! Isn't that great? Northern Somalia is in parts completely outside of any government, has zero control on companies and private enterprise. Although its not going so good at the moment.
What amazes me with so called liberterians is that they believe a free fall is the same as flying aslong as atleast someone has a parachute. This is all good actually IF you believe that humans have the same emotional set-up and pack mentality as polar bears (which we don't) and that "individualism" (as they describe it) is actually true.
When they talk about freedom they are basicly like survivalists dreaming up future apocalyptic scenarios while at the same time assuming that they, magicly, are one of the few survivors left. They think that freedom for the very very few is the same as "for all" and if not, thats ok anyway because, they also assume that they would magicly be a part of that small minority.
Objectivists are just honest Liberterians, cutting away all that wank because their too dumb to realize people laugh at their ideals.
What amazes me with so called liberterians is that they believe a free fall is the same as flying aslong as atleast someone has a parachute. This is all good actually IF you believe that humans have the same emotional set-up and pack mentality as polar bears (which we don't) and that "individualism" (as they describe it) is actually true.
When they talk about freedom they are basicly like survivalists dreaming up future apocalyptic scenarios while at the same time assuming that they, magicly, are one of the few survivors left. They think that freedom for the very very few is the same as "for all" and if not, thats ok anyway because, they also assume that they would magicly be a part of that small minority.
Objectivists are just honest Liberterians, cutting away all that wank because their too dumb to realize people laugh at their ideals.
14
#6: While I agree with your basic point, Marx didn't really believe the state was the solution to all problems. In fact, he anticipated that communism would bring about the withering away of the state as the state apparatus is only required when one class rules another.
15
This system is working perfectly. World populations are booming, increasing the likelihood of rare intellect. The old middle class is shrinking in unison with the new techno-globalism which insures that the aforementioned intellects are plucked from the dark corners and pushed to the top of the capitalist pyramid. This a race for our survival; not your comfort.
16
#15: What are you, a fucking member of the illuminati? Or just some Social Darwinist jackass? (unless you're just trolling, in which case, good for you) If you are being serious, bear in mind that the instability of the current capitalist order, not to mention climate change, is a threat to our entire species, the "ruling class" included.
17
@4 In addition to making me giggle, reminds me of another point: Libertarians (at least politicians) are aware of how selfish, ignorant, and just generally abhorrent their worldview is to people once the policy implications become clear. That's why they play coy in public. Paul Krugman dubbed this the "Conservative Onion:" the layers of socially-acceptable pablum that insulate their disregard for human suffering.
Ron Paul doesn't lead his swooning followers based on the warped conception of "nature red in tooth and claw." He enchants them with tales of "risk taking," and paints the government as an overprotective parent; he drums up fear of the debt and deficit, and preys on ignorance of the Federal Reserve and fiat currency; rarely will you see him outright state that people who are bleeding into the gutter are owed no help. If he does, he'll usually have the sense to dress it up with a, "Well, looks like the risk he took didn't pay off- isn't that so American?"
Ron Paul doesn't lead his swooning followers based on the warped conception of "nature red in tooth and claw." He enchants them with tales of "risk taking," and paints the government as an overprotective parent; he drums up fear of the debt and deficit, and preys on ignorance of the Federal Reserve and fiat currency; rarely will you see him outright state that people who are bleeding into the gutter are owed no help. If he does, he'll usually have the sense to dress it up with a, "Well, looks like the risk he took didn't pay off- isn't that so American?"
18
@ Charles, the answer to your question
"But what about, say, the environment?"
Is actually answered in the last sentence of the paragraph you posted.
"You also don't need to be a libertarian to demand that any new intervention meet this burden of proof: It will accomplish something that tort law and enforcement of basic laws against force, fraud and collusion do not accomplish."
The problem with this answer is that tort law only comes into play after the damage has been down. So for example while I'm pumping tons of chemicals into the river there is nothing society can do, it is only after the damage has been done that you get to take my business to court. At which point I retire have the business declare bankruptcy and shut down leaving the clean up to the rest of you rubes.
Just as disturbing is this sentence.
"Every intervention that erects barriers to starting a business, makes it expensive to hire or fire employees, restricts entry into vocations, prescribes work conditions and facilities, or confiscates profits interferes with economic liberty and usually makes it more difficult for both employers and employees to earn success."
"Every intervention that erects barriers" yep you read that right goddamn medical boards preventing me from entering my vocation of brain surgery.
@6 Interesting point I'm inclined to agree libertarianism and Marxism are two sides of the same coin. I hesitate because I'm old enough to remember a time when libertarians in the US were a bunch of liberal hippies wanting to be left alone to smoke pot, and live on communes but I guess that really doesn't contradict your point. Its just they were quieter and less obnoxious.
"But what about, say, the environment?"
Is actually answered in the last sentence of the paragraph you posted.
"You also don't need to be a libertarian to demand that any new intervention meet this burden of proof: It will accomplish something that tort law and enforcement of basic laws against force, fraud and collusion do not accomplish."
The problem with this answer is that tort law only comes into play after the damage has been down. So for example while I'm pumping tons of chemicals into the river there is nothing society can do, it is only after the damage has been done that you get to take my business to court. At which point I retire have the business declare bankruptcy and shut down leaving the clean up to the rest of you rubes.
Just as disturbing is this sentence.
"Every intervention that erects barriers to starting a business, makes it expensive to hire or fire employees, restricts entry into vocations, prescribes work conditions and facilities, or confiscates profits interferes with economic liberty and usually makes it more difficult for both employers and employees to earn success."
"Every intervention that erects barriers" yep you read that right goddamn medical boards preventing me from entering my vocation of brain surgery.
@6 Interesting point I'm inclined to agree libertarianism and Marxism are two sides of the same coin. I hesitate because I'm old enough to remember a time when libertarians in the US were a bunch of liberal hippies wanting to be left alone to smoke pot, and live on communes but I guess that really doesn't contradict your point. Its just they were quieter and less obnoxious.
19
the people on this earth with the most freedom and opportunities are those in sweden, switzerland, germany, etc., who have rights to vote, to own, to produce, and also have what conservatives call socialism but which is in reality social democracy.
the libertarian dream in reality isn't a free market, it's ajungle where sharks and tigers eat up ordinarly people and spit them out. the sharks and tigers being not only crooks, but overdominating coporations, businesses, fraudsters, scamsters, etc., like the health insurers.
in switzerland they're so tightly regulated their profits are limited; it's obamacare on steroids; in israel it's even more regulated with health insureres not allowed to make profit! both are good examples of high performing economic engines and both have plenty of rich people. closer to home, canada now surpasses the usa in per cap wealth, proving its "socialist" form of capitalism is better than ours.
the libertarian dream in reality isn't a free market, it's ajungle where sharks and tigers eat up ordinarly people and spit them out. the sharks and tigers being not only crooks, but overdominating coporations, businesses, fraudsters, scamsters, etc., like the health insurers.
in switzerland they're so tightly regulated their profits are limited; it's obamacare on steroids; in israel it's even more regulated with health insureres not allowed to make profit! both are good examples of high performing economic engines and both have plenty of rich people. closer to home, canada now surpasses the usa in per cap wealth, proving its "socialist" form of capitalism is better than ours.
21
@18 - I liked to argue that Libertarians used to be people who took Thoreau's Walden a little too literally, which matches a little more with what you're saying, but I'm not sure that's so true anymore. I really believe the modern GOP has a lot in common with the 1960s-1970s Soviet communist party, and in that model the Libertarians/Paulites would be the party vanguard; a group beholden to ideological purity and nothing else. Imperfect model, but whatever, I find it fun to think about historical connections.
22
To answer your question: they live inside a world where their respective brains stopped maturing during their freshman year of college; a world where they were too smart for their own good, and too dumb to see the forest through the trees.
It's been proven over and over again that pure [insert political/economic theory] never works. You need some hybrid of capitolism, socialism, etc. The question should never be which system is best? If that's your position, you've already lost.
It's been proven over and over again that pure [insert political/economic theory] never works. You need some hybrid of capitolism, socialism, etc. The question should never be which system is best? If that's your position, you've already lost.
23
What kind of world does a Libertarian live in? Well, he doesn't live very long since he's completely destroyed his habitat with his greed and disregard.
24
@16. As long as we keep shitting out a rainbow of newborns at an ever increasing rate and continue to improve the villagers access to WIFI then we are right on track.
25
Given the current stock market and what seems like the complete inability for social media to produce any profit whatsoever, I'm really confused as to what actually constitutes value any more.
Look at the valuations of Big Tech stocks.
Almost all of them are off their historic highs. MSFT reach its high of $60 more than ten years ago. Amazon is losing money. AAPL is stuck in neutral and is facing stiff competition from GOOG who are $200 below their high of several years ago. Facebook...nuff said.
So, it seems like most of these companies in the long run are sort of long cons...losing more than they make in profit and violating the central tenets of profit capitalism.
It seems like they are unable to overcome entropy in any way -- that is, they start off profitable due to some infusion or misguided notion, but then gradually run out of steam and stop. Quite the opposite of what we've been told...
27
I think you're confusing Capitalism with Mercantalism, the latter of which is what the world is suffering under at the moment.
Read all of Adam Smith's Wealth of Nations books. There are more than three. Quite a few more.
Read all of Adam Smith's Wealth of Nations books. There are more than three. Quite a few more.
28
Aside from the ludicrous idea that unfettered markets will always find the best solution to every problem another thing that doesn't seem to register with libertarians is that most 'barriers to success' are there to protect the less successful. If the successful (that is the self-perpetuating plutocratic elite) are permitted to accumulate more and more, the less successful have less and less (as we are seeing happening presently). They also have less and less actual liberty. This is why the central libertarian tenet that economic liberty equates to actual freedom is fundamentally fraudulent. For instance freedom for the landlord to discriminate means diminished mobility and choice in living arrangements for the renter. More liberty for the 'successful' not infrequently means less net liberty for society as a whole.
29
Yeah, @7. I'm not really sure what your point is or what evolution has to do with this blog post, but I can't help but quibble with the assertion that evolution is about "bettering" a species. Evolution is simply a population adapting to circumstance as those better able to cope have more progeny. Nobody is trying to get "better" or more "perfect". There's no Great Chain of Being. Populations are just trying to get by.
But on the other hand, we like to think that we're better than (the other) apes and animals. Sometimes I have to quibble with that, too.
But on the other hand, we like to think that we're better than (the other) apes and animals. Sometimes I have to quibble with that, too.
30
Thank you, @10. That's the whole point right there. They're trying to obfuscate it and make us forget - and they're doing pretty well. It's a good strategy, demonizing the authority designed to protect you.
33
Government regulations that promote fair competition are not a burden to success, they are a precondition of it.
34
Charles,
Have you read "Coming Apart" or "The Bell Curve" by Murray (the latter with the late Richard Herrstein)? Just curious. I am aware he is quite a provocative author/scholar. For me, it is hard to dismiss his material as "nonsense".
Have you read "Coming Apart" or "The Bell Curve" by Murray (the latter with the late Richard Herrstein)? Just curious. I am aware he is quite a provocative author/scholar. For me, it is hard to dismiss his material as "nonsense".
36
"Economic liberty" isn't something I value as an end in itself. I want prosperity, and if a government intervention benefits prosperity then I'm for it. Sure, there is some unnecessary red tape out there, but the provision of transportation infrastructure, law enforcement, health care, education and pensions by the government makes it EASIER for businesses to succeed, even when you account for the taxes they must pay to support those functions.
37
@6, Marxism has no real cures. it's not a prescription; it's a description. what's described is capitalism sans ideology. socialism, on the other hand, has cures.
38
@29
Gee, ya think?
Kind of like when Bain Capital chews up "inefficient" companies and throws Americans out of work, sending their jobs overseas? That's definietly capitalism at its best, disciplining the market. Is that "better"?
Complex systems will order themselves like automata, whether it's a free market or competition between living things or weather patterns or the way computer viruses spread to poorly managed computers. That produces a certain outcome with winners and losers. But the fact that it's mindless and has a certain brutal inevitability doesn't make every outcome "good".
Which is why fetishizing the outcomes of free markets or the process of evolution is a mistake.
Gee, ya think?
Kind of like when Bain Capital chews up "inefficient" companies and throws Americans out of work, sending their jobs overseas? That's definietly capitalism at its best, disciplining the market. Is that "better"?
Complex systems will order themselves like automata, whether it's a free market or competition between living things or weather patterns or the way computer viruses spread to poorly managed computers. That produces a certain outcome with winners and losers. But the fact that it's mindless and has a certain brutal inevitability doesn't make every outcome "good".
Which is why fetishizing the outcomes of free markets or the process of evolution is a mistake.
39
The problem with libertarians (and conservatives in general) is that they support cannibalistic economic policies due to their delusion that THEY will get to be the cannibal. Even for a sociopath, this should be seen as bullshit for anyone with a mild propensity towards realism.
When they claim that all taxes are confiscations, they're picturing themselves as the wealthy robber baron, and not as the starving welfare recipient. They resist regulation because they picture themselves as the ones saving millions by dumping untreated industrial waste into drinking water, and not as the people having to drink that water. They resist worker's rights because they see themselves as the profiteer and never as the worker.
The trouble is that, when you do the math, 99% of these fantasies are dead wrong. You can praise the accomplishments of rich people all you want, and you can talk ad nauseum about how any pauper that gets fucked over should simply have become CEO of something-or-other so that he could be the one doing the fucking. Even if every last individual were brilliant, industrious, and hard-working, the libertarian philosophy would still be bullshit. At the end of the day, 300 million people simply cannot run 300 million successful businesses in a country of 300 million. To rely on each person's ability to "become rich" as your only criterion for whether they have a right to live (unexploited) is to deny reality.
And it never fails to boggle my mind when they act like the labor of every employee in the company simply doesn't count towards the "earned" wealth of a CEO, as if he's the one actually making and selling whatever product people are paying for. So a wage is welfare, now?
If other people's work is the reason you're rich, you owe those people as much as they need to get by, no matter how far above them you believe yourself to be. End of story. And if you refuse to do so through wage levels that are actually realistic, then it's going to require taxes and entitlement programs.
More...
When they claim that all taxes are confiscations, they're picturing themselves as the wealthy robber baron, and not as the starving welfare recipient. They resist regulation because they picture themselves as the ones saving millions by dumping untreated industrial waste into drinking water, and not as the people having to drink that water. They resist worker's rights because they see themselves as the profiteer and never as the worker.
The trouble is that, when you do the math, 99% of these fantasies are dead wrong. You can praise the accomplishments of rich people all you want, and you can talk ad nauseum about how any pauper that gets fucked over should simply have become CEO of something-or-other so that he could be the one doing the fucking. Even if every last individual were brilliant, industrious, and hard-working, the libertarian philosophy would still be bullshit. At the end of the day, 300 million people simply cannot run 300 million successful businesses in a country of 300 million. To rely on each person's ability to "become rich" as your only criterion for whether they have a right to live (unexploited) is to deny reality.
And it never fails to boggle my mind when they act like the labor of every employee in the company simply doesn't count towards the "earned" wealth of a CEO, as if he's the one actually making and selling whatever product people are paying for. So a wage is welfare, now?
If other people's work is the reason you're rich, you owe those people as much as they need to get by, no matter how far above them you believe yourself to be. End of story. And if you refuse to do so through wage levels that are actually realistic, then it's going to require taxes and entitlement programs.
40
@35 Charles,
I couldn't get through "The Bell Curve" either. Believe I read about half of it. However, I shall read "Coming Apart". It has gotten better reviews.
I couldn't get through "The Bell Curve" either. Believe I read about half of it. However, I shall read "Coming Apart". It has gotten better reviews.
41
Charles Murray is too dumb to be a libertarian, and that's saying something. However, not all libertarianism is a crock. I'd recommend doing some of the reading, but you'll probably be happier with your present simple if incorrect concepts (assisted by the likes of Murray).
42
I boiled it down this way in a totally different forum: Imagine a miniature society with 3 people: Adam manages to find or grow enough food to feed 2 people, but wants to keep it all. Bob manages to feed himself and also manages to make a weapon. Charlie has a broken leg and can't feed himself. The moral question: Should Bob use his weapon to force Adam to feed Charlie, or should Bob respect Adam's property rights and let Charlie starve?
The interesting part of this scenario is that one die-hard libertarian I was debating simply refused to choose. He couldn't accept forcing Adam to part with his extra food without his ideology falling apart, but also couldn't admit that his ideology demands that people quietly lie down and die.
The interesting part of this scenario is that one die-hard libertarian I was debating simply refused to choose. He couldn't accept forcing Adam to part with his extra food without his ideology falling apart, but also couldn't admit that his ideology demands that people quietly lie down and die.
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