Libertarian capitalism

Since capitalism is most often defined and discussed by different people according to an individual's ideology, it's helpful to remember from time to time that capitalism, especially understood through the ideas of libertarianism, has a specific, rather limited, definition --

Main Entry:

cap·i·tal·ism 

Pronunciation:

\ˈka-pə-tə-ˌliz-əm, ˈkap-tə-, British also kə-ˈpi-tə-\

Function:

noun

Date:

1877

: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market

This is pretty straightforward, yet to read some discussions of capitalism, you'd think it's the most nefarious system known to humankind. Contrary to some beliefs, capitalism is not a conspiracy of rich, old, white men to oppress the poor, rape the earth and deny assistance to the needy. Capitalism wasn't designed to provide a means for corporations to work in concert with the state to create an ogliarchy. If a country has allowed its government to work with corporations to control the economy, then that country doesn't have an economic system which can be called capitalism. Anytime businesses and government can collude to limit competition, then the economic system is something other than capitalism. Some say that in reality this is what naturally happens when a country starts with capitalism -- I say this is what happens when government is not limited and prevented from interfering in the economy. There's a big difference between the two propositions.

Is it possibile for a country to maintain a government which does not interfere in the economy? If a constitution is written which forbids government intervention in the economy, and abides by the constitution, then the answer is -- yes. The US Consitution had loopholes regarding interstate trade and the welfare of the nation which allowed government to crawl through like a bunch of termites which eventually destroyed the foundation.

Now, certainly, most people will have a conniption fit at the suggestion government should be prevented from intervening in the economy, and when you ask -- why? -- they will begin describing the horrible results when government and businesses collude to control the wealth. But, these critics of capitalism don't seem to realize they are making the argument for a limited government. They automatically assume a government/corporation relationship, but this is the reason to prevent the government from intervening. When they see the error, they immediately begin claiming capitalism would do this anyway if unregulated -- but they never explain why it's inevitable, although they will likely explain how capitalism creates commercialism, and how it ignores the needy in society -- capitalism doesn't do these things, people do. A libertarian-minded society would envision the diverse possibilities. 

Capitalism is a system and there is nothing in the system which prevents a spiritual, artistic-minded society or a society where there is voluntary benevolence -- charity -- or a society concerned with protecting the environment, for that matter. Capitalism is merely a system which prevents the government from interfering with private ownership, prices, investments, production or distribution of goods -- or interfering with competiton. Ownership is protected from theft, forceful taking or damage, the private decisions are contractual and protected from violation or fraud, and competition is unhampered in the market. Outside that system, private citizizens should be free to make any arrangement they want to make as long as there are no violation of basic rights. If some people want to give money to others, then capitalism doesn't prevent this. If people decide they'd rather live less commercial lives and form communes in the country, capitalism doesn't prevent this.

What gets tricky is when some say that a capitalistic system prevents the government from stopping harm done to the environment by unregulated production. But in order for private ownership to have any meaning it must be protected from theft, forceful taking or damage. If a company was putting toxic chemicals in the air, it would be violating the rights of all those it affects, and it would even be affecting the people who work in or own the business. What makes us think we can't voluntarily work out environment standards -- especially, now, knowing what we know? It amazes me to think how so many people view businesspeople as heartless, ignorant and myopic. It's true that businesspeople will do what is best for business, but I'm not sure everyone understands what's best for busines and how these decisions are made. Knowing what we know today, how many companies would poison the environment -- the environment they live in, the communities they live in -- risking backlash, condemnation, sickness, etc?

Even if some company led by a madman or madwoman willy-nilly poisoned the environment around them, there are ways to set up accreditation processes that industry voluntarily submits itself to upfront to instill confidence in the processes -- and there would also be courts to take up the issues of violation and harm. There's no reason to think that government regulation will do any better than a voluntary process -- plus, with government regulation, there's the danger of political motivations using regulation to engineer industry according to ideology or special interest pressure. Standards can be voluntarily developed which govern environmental concerns -- any company bent on violating the standards and harming the environment would never survive the societal pressure to adhere to the standards -- the company would adhere or go out of business.

It's in a company's best interest to maintain good public relations and for the brand to represent excellence. It's not in any company's interest to knowingly destroy the environment and risk the health of the public, of which the company's employees are a part.

I don't think many people have thought through the issues of capitalism, limited government and free markets -- it appears most people have merely accepted the state version which always places government in the position of public protector and the capitalist system as the violator. What an interventionist government does, in part, is attract dishonest, politically-motivated businesspeople who lobby the government  for favor so that competition is limited and the favored companies have unfair advantage -- which substitutes the system of capitalism with a system of cronyism and corruption.

So, the choice is between trusting voluntary agreements in a free market or trusting government to regulate business and, thus, the economy. A political system which is a constitutionally limited republic fits well with the economic system of capitalism. Very few people trust such a combination in the 21st century and they have myriad reasons for why it's naive, utopian, doomed to failure, selfish, consumeristic, downright evil, simplistic, etc., yet it's never really been tried in earnest. From the beginning of our nation there has been government intervention and collusion of government and business. In the 21st century, however, the situation is ripe for the re-assessment of these systems. We have evolved to a point where we can better understand our problems because we now have better information and much more knowledge of how the world works and of the collective problems we face. The atomistic idividual has been shown as myth -- cooperation is understood as an inherent part of capitalism. Perhaps a new social imaginary will emerge, one based on honest assessment. The idea that we've abided by capitalism and free markets, only to fail, is one of the greatest con jobs in history. Libertarianism defines the conflict.

The Third Way

I guess the Third Way is supposed to be a fusion of right and left, a synthesis that transcends the duality by adopting the best of each. Clinton and Obama are examples of the Third Way. Clinton alienated some on the far left with his welfare changes -- Obama talks about unity and adopting what is best for the country regardless of partisanship. It's always an appealing approach to be so broad minded that you build a reasonable consensus in spite of divisive core beliefs. Excuse my cynicism, but I won't leave my reaction at -- bullshit.

If this is the Third Way is seems like more of a capitulation to statism than anything else. Actually, it all boils down to two ways -- the thesis of statism and the antithesis of libertarianism. Isn't this the way of progress? You have a thesis, then an antithesis, then a synthesis -- the synthesis becomes the thesis, then there is an antithesis, then a synthesis, on and on. Since conservatism has been subsumed within the Third Way synthesis, libertarianism can become the antithesis -- but, wait -- can statism and libertarianism be synthesized? Actually, no more than liberal and conservative were synthesized -- what we have is the relentless march of statism -- another attempt by progressives to transform America.

If there is a battle, this is where it lies -- statism vs anti-statism, with no synthesis, only a victor. It remains to be seen if there will be a battle, or if the country goes to sleep. I've had it up to my eyeballs with the pretty ideas of a Third Way, unity, consensus -- in the real world there are Obamas, Pelosis, Reids, Franks, Bushes, Paulsons, Geithners, Bernankes, Goldman Sachs, GMs, European Unions, World Banks and all the various combinations of government/corporate partners establishing a power structure to rig the game and buy off the public while robbing them at the same time. This is a grand play against capitalism -- crush capitalism and control is complete.

The statists want control and they're merely following a family tradition -- history is a story of the powerful using physical coercion  to rig the game. All the intellectual rationalizations in the world can't change the nature of the beast. How many promises have there been throughout history to protect the little people from the monstrous money-changers, the corrupt merchants, the greedy and hateful rich who want inequality? This is just another chapter in the story, and people are falling for it once again. People are once again following like sheep. When will they ever learn -- when will they ever learn?

America -- an anti-capitalist country?

The war against capitalism started a long time ago. What makes the present interesting is how easily people in general dismiss capitalism -- unless they want to give the impression that what we've had in the U.S. is capitalism so that it can be used as an example of failure. It's hard to find anyone who claims to be a capitalist. For the most part, it's become fashionable to deny capitalism and promote a modern, sophisticated form of statism, regulation with a heart. So, I have to wonder what it is we have.

To differing degrees, we've had a mixed economy from the start, so I'm in the camp that says America has never operated under pure capitalism. The point is often made since we've never had pure capitsalism, perhaps it's an illusion -- that pure capitalism is impossible, therefore meaningless. This isn't convincing. It's reasonable to imagine a country which commits to pure capitalism, or at least a country which embraces the principles of capitalism as a first choice.

We've drifted so far from capitalism that now it's like an obsolete system destined for the footnotes of a history book. Well, maybe not, because there's still this thing we call reality which must be dealt with. But who knows how long we can defy reality -- how long we can get producers to foot the shortfall until it's all dried up. By all indications we're getting close to zero, but I'm sure with China and India mixing a little capitalism in we can go along for a while.

If the new liberals/progressives get their way, in a about ten years we should have made the transition from a mixed economy to a statist market place. I was reading today about the problems with GM and the banks and it struck me how ridiculous this all is becoming. After years of government intervention, each of the companies, in and of themselves, have a hard enough time deiciding how they are going to get through the madness of government intervention-- just think what it will be like when we have government managers  dealing with many, many enterprises under complete central control.

Will people wake up and rebel? I don't know how far we've gone with the anti-capitalist mindset and how convinced the nation has become that state management will resolve the problems in time. It's truly astounding the number of intelligent adults who still believe the government will come up with a plan to manage it all, and that it will be fair and equitable to all. Sometimes I think I'm in a bad dream that will end soon and when I wake up all will be well.

Surely we're not completely lost in an anti-capitalist madness with no return -- tell me it ain't so. The only explanation is that people are denying reality and hoping for a government pay-off. I can accept that explanation, although it dissapoints me to think people are that short-sighted and disinterested in the future -- what I have a hard time accepting, though, is that the majority of people are so ignorant they've bought the offering of central control as a philosophically sound approach to living in our modern society. Perhaps I haven't been paying close enough attention to the collective mental health.

I can't wait to see what the EPA is going to do. Heaven help us.

The spirit of Marx -- Part 4 & the end

Cynicism, scepticism and a misunderstanding of American history prevent most people from realizing the potential for freedom in the 21st century. There's also the incorrect conflation of limited government with no government or weak government. A free society would need a strong, competent government -- it's just that it's powers would be limited to proper government responsibilities. Proposing a free society and a limited government does not imply a belief in the goodness of all people. As I wrote earlier, the world has bad people in it. Rights would be protected in a free society with limited government by the rule of law -- rational laws based on principles that are not manipulated by the whims of men and women who happen to be in power at the moment.

Also, as I wrote earlier, one of Marx's most interesting ideas was the stages of societal growth from childhood to adulthood -- in other words, this could mean the way people relate to one another in society changes over time as we all learn and grow, and as ideas mature and new ideas develope. Society learns what its problems are and innovative solutions are developed to deal with these problems. Even if government intervention was necesssary at some point to help deal with societal problems, and this is not  conceded, I'm just saying "if", it doesn't mean individuals haven't gained from the collected ideas through the years and aren't now capable of dealing with societal problems without government intervention and the use of force, except force to prevent violations of basic rights.

Another metaphor is a brilliant apprentice who quickly becomes more proficient than the master -- society as a whole is more brilliant and proficient than its government, and in this technological age, this age of information, the people are far more capable of developing the economy and dealing with social problems than the relative handful of representatives we elect. Cynicism and scepticism regarding the private sector's ability to regulate law-abiding activity without coercion is not justified by any evidence or historical proof. The political system of libertarianism is the proper system for human nature -- ethically, morally and practically.

Many people might envision chaos but I envision economic growth, diversity, innovation, a widespread rise in the standard of living, colorful and interesting community life, cooperation and a system whereby the free market of ideas offers creative options. Naive utopia? The true naive utopia is the modern liberal idea of central control and social engineering. We're already over-burdened with regulations which cause unintended consequences in the economy and violate individual rights, and our tax burden is taking up to half of what we earn. For capable people to sit back and allow the state to control their actions and waste a large portion of their hard-earned money is incomprehensible -- it's criminal on behalf of the state. There are private solutions to our problems -- we don't need the state playing master.

Our tolerance level for control has risen and many people agree that society must be controlled for the greater good, but they don't realize what could be. Our education system has failed to show young people the options, and it has failed to pass along the principles of classic liberalism which were once the hope of the future and the cause of the greatest progress known to humankind. We think these principles can be managed by smart power so that we can have our cake and eat it too, but reality always wins, and in reality there are choices. We can choose statism and economic stagnation or we can choose freedom, limited government and economic growth, but we can't have both.

Marx's influence regarding the social template has led to governments and policies which restrict freedom at a time where freedom is needed most for human flourishing and the innovative energy required to transform old and stubborn societal problems of poverty and ignorance into a world where the cooperative and competitive efforts of men and women would bring dignity and a chance for happiness to millions now stuck in dependency, stagnation and oppression.

Individualism is the art of self-regulation whereby ethics and morality are developed in freedom (and whereby violations of the rights of others is punished) -- it's a resistance to the idea that an impersonal state knows best how we should live and interact with one another, a state that treats individuals as mindless parts of "society". The idea of central control is so offensive words are inadequate to condemn it, yet we still hear weak justifications from cynics, sceptics and those who stand to benefit from state control as if freedom is a recipe for disaster, because people are either too stupid, too selfish or too evil to interact in society under a limited government, and that they need the paternalistic guidance of a benevolent state. This socialistic, cynical sense of life is abhorable -- it's based on the worst in humans and denies the best, and it's deluded into thinking any interventionist state could be benevolent, even if it wanted to be.

National Awakening -- part 3

In other posts written a few months back I've argued for specific areas of government control to be moved to the private sector, but here I want to write about the obstacles to privatization and the false dichotomy of statism vs a Hobbesian war of all against all. We're supposed to believe, according to the contemporary liberals, that if we don't have a powerful state controlling the dangerous excesses of unregulated capitalism, society will be afflicted by all sorts of evils, not excluding starvation, old people freezing in cold flats, sickness and despair from lack of insurance, a two-tiered system of the filthy rich and oppressed paupers begging for dimes from patronizing charity organizations, and children subjected to the commercialization of education whereby corporate schools process robot consumers who buy useless goods in a trance.

Until now, society, for the most part, has seen this choice as the only choice and has supported the state in its efforts to regulate capitalism in spite of the poor performance of government to deliver the utopian world in which the lowly rise to positions of power as a group equal to the capitalist manipulators. Although the union gained strength for awhile, it's eventually become evident that government misled workers into a bankrupt situation of company loss and layoffs. Economic reality has been denied in favor of wants and demands to the point that reality is lashing back in objective inflexibility, as if reality is saying -- "You've gone too far." 

Yet, the enlightened liberals propose that the solution is smarter, more efficient and caring government. The regulations which reality resists can be empowered to overcome resistance by intelligent adjustments, more control over the owners of capital so that equality can be achieved through direct management. The liberal view shows that capitalist management has resisted the force of equality and is skimming profits for a select few under the guise of valuable performance. This self-protection of management to the detriment of workers and the public at large, say the liberals, needs to be regulated so tightly that capitalist pigs can't manipulate the wealth from the top.

The liberals look across America and see a pile of potential wealth which only needs intelligent engineering so that money flows to the proper source of needs. This idea that government must engineer society in order to avoid the evils of capitalism is falling apart. The psychological buy-in from the public enamored with the idea of fighting the power structure of protected wealth is being subjected to second thoughts and other options in light of recent information and evidence which shows more clearly than ever before the reality of government incompetence and duplicity.

It appears many Americans are feeling duped by the government they placed so much hope in as the connections between corporate thieves and government protectors are revealed in sordid detail -- even the contemporary liberal government which supposedly championed the poor and middle class for so many years. The national awakening is the realization that the "capitalists" they hated all along are partners with the protaganists in the story of justice and equality, and that they really aren't capitalists at all, just protected government cronies in business to protect power and wealth. Our government has been an alliance of representatives and unscrupulous businesspeople using the nation's wealth to rig the game. Our taxes have been going to support this rigged system and all the goodies we've been given are pay-off to look the other way.

The good news is that there is a nascent national awakening, the bad news is that the unholy alliance won't change with more intelligent people in charge of government, and it won't change with more regulation and more control -- that's just part of the overall con job to keep the game going and ensure more protection for the power players. We have choices, though.

We can begin limiting government power and stop all corporate welfare. This will require a national psychic change. The storyline that government is the protector against capitalist greed and corporate power has to be rewritten -- the American people are the protectors of their freedom and the private sector freed from statist control will flush the protected corporations out of the system, so that smaller players can succeed and economic growth will spread in thousands of smaller, more efficient ways. The era of big, protected and powerful is coming to an end -- decentralization is begining to destroy the foundation of the government/corporate enmeshment.

The idea is not to institute dog-eat-dog, which was never a danger to begin with, but to allow competition and cooperation the freedom spontaneous order needs in a free society to resolve problems, grow the economy in diversity and prosper in many more ways than wealth accumulation. The focus on wealth accumulation is a red herring diverting attention from what a free people can accomplish if left to their own choices -- better education, enriched community life, diversity of niches to find the best means of discovering purpose and creative expression, less warring over national disputes, more free trade and peaceful relations with foreign nations, better healthcare solutions as innovation finds ways to drive costs down, charity organizations which efficiently work with temporary set-backs through insurance arrangements and pay-back models when situations return to normal, energy solutions which break the dependence on unfriendly sources of energy, more public involvement in the market of ideas to find the most moral paths and the most reasonable expressions of justice, less concentration on equality as income disparity and more focus on values which transcend the millionaires club.

In a free society where the government feeding trough is destroyed, no politically savvy business interests will have the lobbying power to receive favors and they'll be forced to put up or shut up and go out busines, as more eficient and valuable business interests take their place, and employment will follow the most successful undertakings as workers develope a plan of learning that's a life-time process -- avoiding boredom, rote and stale sameness. The ingenuity of any nation of free people will trump the static weakness of England or the centrally panned "capitalism" of China or the mixed devastation and squalor of India or the haughty paternalistic mediocrity of France and what's becoming here the liberal, crippling proceduralism of American statism.

Any one of these countries could develope a free market, limited government approach and they would raise the quality of living in no time, but the mindsets of most nation is a submissive mindset content with government protection and safety -- yet these governments are showing signs of strain as more and more resources go toward central planning and unintended consequences. Capital is being misdirected around the globe and America has been following the trend. If our goal as a nation is to create the best living situation for all, living in peaceful co-existence and working together to support a system in which people can freely trade goods, services and ideas and choose the lifestyles most suitable to their value-judgements, then our methods to achieve these goals are moving us in the opposite direction. If our goal is to get revenge on the unfavored wealthy and set up a system governed by a few elitists who protect a power structure made up of professional politicians and favored corporations, then our methods are effectively achieving the goal.

These are the choices, not statism or dog-eat-dog. I'll wrap up tomorrow.