Capitalism should not be condemned, since we haven’t had capitalism.
Posted on September 24, 2010 at 8.45 pm
Q. What do you think was the reason for the latest economic meltdown? Lack of regulation, lack of control. I agree with you that government should not attempt to meddle in something it is inadequate, but to allow the market to freely do it’s thing has shown to be destructive.
The system works beautiful, but people, they are the ones that fail it. The free market is no match when it comes against greed. So without regulation bankers, brokers and speculators will once again take advantage of laissez-faire and do with it what they will. — sadomars, from tumblr.
A. Let me start with a quote from Ron Paul:
Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!
To condemn free-market capitalism because of anything going on today makes no sense. There is no evidence that capitalism exists today. We are deeply involved in an interventionist-planned economy that allows major benefits to accrue to the politically connected of both political spectrums. One may condemn the fraud and the current system, but it must be called by its proper names – Keynesian inflationism, interventionism, and corporatism.
I too attribute the recession far more to government — or at least, to individual actions taken in an environment created by government — than I do to individual greed.
Basically, I follow Austrian Business Cycle theory (ABCT). If you’re not familiar with it, it’s the idea that government intervention in the economy sends false signals to investors, and malinvestment causes bubbles as well as their inevitable burst. Here’s another basic explanation:
The key point of the Austrian business cycle theory is that interventions in the monetary system—and there is some debate over what form those interventions must take to set in motion the boom-bust process—create a mismatch between consumer time preferences and entrepreneurial judgments regarding those time preferences.
That’s a really brief version; for a much better explanation, I’d suggest you check out this article from Dr. Tom Woods on the subject — it’s not too long and he has a very easy writing style. You could also take a look at this parable-type explanation, though the Woods piece, again, is more clear.
So, as I said, I place the majority of the blame for the economic meltdown on the government’s intervention and confusion of the market. That said, any fraudulent activities in business should certainly be punished; that’s not the free market — it’s just criminal behavior. As Paul continues (maybe take a look at the entire article I’m pulling these from as well):
Corruption and fraud in the accounting practices of many companies are coming to light. There are those who would have us believe this is an integral part of free-market capitalism. If we did have free-market capitalism, there would be no guarantees that some fraud wouldn’t occur. When it did, it would then be dealt with by local law-enforcement authority and not by the politicians in Congress, who had their chance to “prevent” such problems but chose instead to politicize the issue, while using the opportunity to promote more Keynesian useless regulations.
Anyway, I hope that answers your question adequately and, if it doesn’t persuade you XD, at least makes clear my own position. Sorry it took me so long to answer it! The longer the query, the longer I tend to put it off…bad form, I know.
Nice answer. Id recommend a repost on YAL
I consider myself a socialist libertarian, that is, I believe in the freedom of the individual, but when it comes to the economy, environmental protection, or building infrastructure (roards, sewage system ect.), that is the role of government in a society. READ JOHN STUART MILLS ESSAY “On Liberty”, it is one of the most famous essays ever written, and it addresses the nature and limits of the power that can legitimately be exercised by society over the individual. It’s basic thesis is that people should be able to do what they want so long as it does not harm others- this is fundamental to me, and it why people like you, who misrepresent libertarianism to be the same thing as free-market fundamentalism, anger me so much. I think red-tape is annoying as well, and I agree that government can be inefficient, and in some cases corrupt, but this idea you push that if government wasn’t around, everything would just balance out, is so moronic and so dangerous to the foundation of society that I can’t help but call you out on it. Oh, and if you want to make your argument sound credible- don’t use Ron Paul to back it up. Ron Paul is cool because he wants to end the occupations, and he has kind of become an outcast in the Republican party for being the only real conservative, but at the end of the day, he is a politician, and he doesn’t no shit all about economics. Read a book by Joseph Stiglitz, a Nobel Laureate in economics that was kicked out of the IMF because he criticized the institution. I would love to engage you in a dialogue, but something tells me you’re too busy smelling your own farts.
@Tyson…umm, have you read much of what I’ve written? That “people should be able to do what they want so long as it does not harm others” is exactly my position. Moreover, I don’t want to eliminate government. I have written so very many posts about the fact that I’m not an anarchist.
I would love to engage you in a dialogue, but something tells me you’re too busy hurling insults and ignoring the large record on this site of my political philosophy.
Tyson is ignoring a lot of things.
“I believe in the freedom of the individual, but when it comes to the economy…”
Tyson, hopefully I’m not the first person to tell you this… You do not believe in the freedom of the individual. When you crassly write of “the economy” as just another cog in the great wheels of your imagined super machine that is your “socialist” government, you ignore the reality of what you are saying. You’re saying that the economy, the product of the thousands of hours that we spend in our lives working, a huge part if not all of our very purpose in life as we each see them, is now only, what, 60%?, 30%?, 10%?– I don’t know how far you want to go with this– our own? You can yell something dumb like MONEY ISN’T EVERYTHING until your face is blue, but it doesn’t change the fact that you are advocating the outright theft of huge portions of every person’s life.
All because you’re arrogant enough to think you know better than somebody else what their life means to them.
And if you’re worried about the environment or whatever you are worried about (believe me, even though you only worry about a select few things and you think that everybody else’s worries and motivations are bullshit, there is an infinite well of things that human beings can worry about / work on / achieve), then convince everybody you are right and they should care, or prove your case to a jury if you feel you’ve been injured. Instead you want to install your thugs as mommy overlords. You want to enslave the whole world in service to an international story-telling contest that feeds on the ambiguity of reality.
So if you guys win. Fair warning. In your “socialist libertarian” utopia, whatever that means, I don’t feel much like working. But somebody better give me some roads, health care, and some food. Else I’m gonna riot. Believe me, I’m 100% serious. I do not feel like working. If you threaten to throw me in jail if I don’t work, ok I’ll get a job. But I’ll make it a point to do as little work as possible, but keep up enough appearances not to get thrown in jail. I guess, unless as a leader you are a REALLY good liar and can psyche me up somehow – not likely, or a really scary one maybe.
That sounds like a sustainable society. Keep in mind, this attitude compounds with each new generation born in the nanny state, or whatever form of centralized collectivist power you favor.
[...] 1. How can you legitimately believe that you are supporting the preservation of liberty when you are against taxes on the rich and for deregulating our economy. Well, I’m actually against taxes for everybody, not the rich in particular. As for deregulation, the rest of your question indicates that you have rather different ideas about the nature and consequences of this idea than I do. As it happens, the economic mess we’re in now is not due to a lack of regulation. [...]