Libertarian Preparation Part 2: Capitalism-Illiteracy

There's a capitalism-illiteracy in this country that's maddening. There are still those, likely smart in other areas, who ignorantly look at profits as an evil waste, something to be squeezed from the system. As I read the healthcare debates around the internet, the constant refrain relates to the evil profits made by insurance companies and healthcare providers and how a government plan should eliminate these profits.

Anyone who wants to understand why profit in business is not evil can read up on economics -- I don't have the patience to go through something anyone in the US over 16 years of age should understand. What I would like to address here is the fact that many people who are attempting to destroy capitalism, understand capitalism and profits, yet push for its demise. If I was feeling generous, I would give people like Barack Obama the benefit of the doubt and excuse their actions as attempts to create a state-run capitalism which they think is more equitable to all concerned, but I don't believe that Obama is that ignorant. I believe Obama and most of the people in power in the Democrat Party know that state-run capitalism is statism, not capitalism.

I also believe that most of the Democrats in power know that a free market will create more prosperity than statism, but their ideology leads them to prefer statism because their goal is not prosperity -- their goal is to prevent a certain part of society from generating great personal wealth which can't be controlled by government. I doubt Obama has any aversion to personal wealth, per se -- if he did, he would give away his wealth, and he would be urging all other wealthy Democrats who have amassed great fortunes to do the same. Actually, many of Democrats' proposals will create great wealth for many people who are favored in his plans, but this can all be controlled through the connections.

What statists don't like is pure capitalism, because it's not controlled and it threatens the power of the state. In a free market with a limited government, the government would be servants to the people, and the Democrat ideology doesn't allow for this reality -- the Republican ideology doesn't either, as a matter of fact, regardless what some may say in stump speeches.

It appears that a slight majority in the country can be labeled as "statists" -- they prefer government control of the economy rather than a capitalist system. When you include the number of people who are capitalism-illiterate, and when asked if they want the government to control the economy if they are helped by the control, the number of "statists" might be as high as 75%. This is, of course, just a guess based on observation, but I'll bet the numbers are very high. I can't find very many people who truly understand the basic principles of capitalism, and the public education system isn't helping -- neither are the universities or media.

Capitalism, wealth and profit have been dirty words for quite some time in the US and around the world. Any libertarian worth his/her salt will give a full-throated defense of capitalism, and that's about all anyone can do who understands the principles, short of revolution. I've written lately about the possibility that people in this country may wise-up and demand changes, but from what I'm gathering, too few people have an understanding of free markets, capitalism or basic libertarian ideas to make a principled, reasoned stand against statism. When their heartstrings are pulled with stories about Tiny Tim's surgery, old Uncle Harry eating dogfood so he can buy medicine and how rich people will control the world if not kept under tight reigns, the would-be proponents of a limited government begin capitulating and falling into the trap of trying to tinker with the present statist system to make it just a little less intrusive -- this is like trying to help an alcoholic by suggesting he just drink beer -- as long as the beverage has alcohol in it you're not solving the problem -- as long as the government has the power to intervene in the economy, it will.

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.

Libertarian integrity

If by some miracle The Libertarian Party captured the White House and a majority in Senate and House of Representatives, libertarianism would be destroyed or government would be destroyed and re-formed and society would be totally transformed. There will be no libertarian society as long as we have our present system of government.  Society creates government, but at some point an unlimited government forms society. For over a hundred years now we've seen a growing enmeshment of government and what was once a relatively free market -- government has also interfered with other areas of private life, but the economic involvement has been the most damaging aspect of interference.

But it hasn't been a one way game of government interference -- players in the market welcomed government intervention at times when companies learned that by lobbying smartly they could get favors and protection against competition. Other special interests in society have become dependent on government, but here I'll stick mainly with government/market enmeshment.

A libertarian society would be so different from what we have, at times it seems like an impossibility. We are seeing now the weakness of government/market enmeshment with huge companies teetering on collapse. Large companies developed a government mentality which is a god-like mentality which creates the idea there can be no collapse, that the game is fixed and all they have to do is feed off the consumers. Companies feed the government, the government protects them, and everyone grows in power, control and riches. Now the giant corporate/government alliance is crumbling and there's nothing for the Godlike combo to feed on but each other until they devour one another completely or government takes over and consolidates power and control.

The state's throwing its corporate partners under the bus, and the partners are begging to be saved. All this has ruined the market and made it almost impossible for small businesses to operate rationally in a competitive, free market. We have no free market. We haven't had a free market for a long time. Libertarianism requires a free market. I don't care what hyphenated libertarians say who hook themselves with left or right, from this libertarian perspective, any group or person supporting any part of the government/corporate enmeshment is wrong and they're a part of the problem.

Libertarian integrity requires a total rejection of the statist-corporate-union-special interest alliance. I've heard all the weak justifications for consensus and compromise with one side or the other, but the problem is there are only two real sides -- statism, as it's represented by the present system and the majority of voters, and non-statism which is represented by libertarianism with objectivity as its foundation -- this broader division, which ignores useless distinctions of right/left hyphenations or portmanteaus, puts libertarians firmly in the smallest minority imaginable. Those who pretend otherwise and think libertarianism combined with one of the two forms of statism, right and left, has a place in the current system would be kind to drop "libertarian" from their political designations.

Perhaps many who lean a tad toward libertariansim can't stand the fact of being ignored by the power center in an irrelevant minority position, and if this is the case, then I'd suggest making a decision to move one way or the other, but don't cloud the issue with equivocations and rationalizations. However, it's a mistake to dismiss libertarianism, in and of itself, as a footnote and a dead idea.

Look around. Corporations are heading for disaster -- government is starting the process of taking over the economy -- money is being wasted at an astronomical rate -- small businesses are caught in the crossfire -- unemployment is rising -- market signals are destroyed -- one war is being shifted to another war -- healthcare is being nationalized -- our energy policy is headed for politicized experimentation -- global statism is crumbling -- this is what you want to join? You're going to influence this with a few ideas regarding personal freedoms at the edges, lobbying your new friends for a few pet liberties to be left alone?

Maybe this moment will blow over and the state will back off its insane movement to transform America -- or maybe America will be transformed and it will be better, with brilliant combinations of ideas with basic philosophical differences, and libertarianism will become a footnote and a dead idea, but I don't think so -- not as long as these plurality of ideas are formed into a consensus under statism. Just look around at how big, intrusive and damned important the state has become -- it's a glorioius monster that does what glorious monsters do -- intimidates and controls its environment -- and if you're a part of its environment then it will intimidate and control you, if it doesn't eat you. It's like they say about making love to a gorilla -- the love-making ain't over til the gorilla says it's over.

So what would be libertarianism's plan? Well, libertarian society wouldn't be a planned society -- it would be a free society which grows within the parameters of laws which prevent coercion -- any form of coercion -- except coercion used to prevent coercion -- a simple idea that would change ...well...it would change ... everything. As long as the great majority scoffs at the idea we can be free and allow society to develop as it chooses, with "government" being simply a service institution with the sole purpose of preventing coercion so that freedom is protected, then the nation deserves what it gets. If libertarianism is going to be diluted in order to be a part of statism, then I'll change what I call my set of ideas -- perhaps, Spontaneousfreedomarianism.

What is beyond principles, exactly?

Listening to Gov. Schwarzenegger this morning as he was interviewed by George Stephanopoulos, after wondering which one had the longest last name, I listened closely to the governor's words. I'm always interested in figuring out the mindset of pragmatists.

In the case of Schwarzenegger it's a mere parrotting of the current call for unity and bipartisanship to get the job done for the American people. He said more than once that we must go beyond prinicples to do what is right for the people, and that politicians must listen to what the majority wants then make it happen regardless of political philosophy, party affiliation or principles. He called on Republicans to drop their differences to work with Obama in order to create confidence and stability in the nation -- never mind if certain representatives think the direction is wrong and will actually hurt the nation, just create unity and act quickly and confidently. 

This is an interesting concept, and it seems to be widely promoted by Democrats and most moderate Republicans. It's funny, though, that I don't recall this same call for unity to ban abortion in 2005 when CBS came out with a poll showing the majority of Americans oppose abortion. I also wonder if there would be a call for unity and movement beyond principles if the majority of Americans are found to oppose the stimulus plan. What if the majority of the country wanted to establish Christianity as the official religion of the U.S., or if the majority wanted to outlaw homosexual behavior, or if the majority insisted on the abolition of all environmental regulations, or if the majority of the country wanted to ban books considered inappropriate to a decent and civil nation, or if the majority wanted to ban all immigration, or if the majority wanted to curtail free speech that's offensive? Would our government go beyond principles to establish unity, determine how the majority wants to implement these changes, then quickly get the job done?

If this is the case, then we could severely reduce the size of government to a polling committee and a large enough enforcement division -- we would poll the public, find what the majority wants, then enforce the implementation of the majority's wishes. Our Constitution would be nothing but a set of principles that we must go beyond when the majority speaks. Yet, this is not fully the case. Our government will stand by principles when it suits the state's political agenda, and it will go beyond principles when it suits the state's political agenda -- the majority is listened to only when it's aligned with the state's political agenda. Now, that political agenda is a liberal/progressive agenda using statist methods to enforce the plans. But we could have a shift to the right and the politcal agenda could be conservative/reactionary, and the government would then use statist methods to enforce their plans.

The point is that principles matter most in a crisis, because it's only then they can be tested, it's only then we can avoid the tyranny of majority aligned with the state -- because the alignment won't always be friendly-liberal or friendly-conservative -- there's the danger of going to extremes when we go beyond principles, when the Constitution is a worthless document in times of crisis.

The Constitution was created to protect us from government. Our Founders knew that government unlimited will grow and become tyrannical -- the world had experienced this tyranny for a long time. What makes us think this is not true today? If the state realizes it can gain control in times of crisis, then what will stop the state from maintaining a permanent crisis mode? What will stop the state from maintaining a permanent enemy to be fought at all costs using any methods necessary?

The state will use the "people" to justify state growth -- the people's will, the people's welfare, the people's protection from terrorist attack, the people's safety from economic forces, the people's spiritual well-being nurtured through hope and fairness -- on and on as the state grows and controls more and more of lives until the state determines how we live our lives.

However, the power shifts between two visions of state control, conservative or liberal, will create instability and division so that one side or the other attempts to gain such complete control as to establish "stability" -- to enforce the right "stability". We won't be able to withstand great shifts of power, because no one will know which direction will be maintained, and then we'll become vulnerable to civil conflict which divides the nation into camps -- a balkanization we've see in other countries where conflict is ongoing.

The spontaneous order of our original libertarian model is preferable because it forces people to work together since no one group has the power to physically enforce their ideas on the others -- ideas are in competition in a free market so that the best ideas are adopted to create relative stability built on principled rules of fair play, and to allow orderly change where innovation is absorbed naturally into the system as the system adapts.

This artificial political-jerking of the system we're now undergoing is based on political motives of power and control and can never be good for the fluid, natural growth of society. The world saw what was beyond good and evil -- and I imagine what's beyond principles is pretty much the same..

healthy dissent

Only a nation can do these things ... Only by coming together, all of us, and expressing that sense of shared sacrifice and responsibility ... can we do the work that must be done in this country. That is the very definition of being American.  

Such knee-jerk disdain for government — this constant rejection of any common endeavor — cannot rebuild our levees or our roads or our bridges  

  There are certain things we can only do together ... There are certain things only a union can do.

He recognized that while each of us must do our part, work as hard as we can and be as responsible as we can — in the end, there are certain things we cannot do on our own

 -- all quotes from Barack Obama channeling Abraham Lincoln

Yes, there are some things which require co-operation among individuals. A true statist like Obama will suggest, further, that this co-operative effort among individuals is necessarily a government-led effort, and all who disagree are reacting irrationally in a knee-jerk fashion.

It's apparently incomprehensible to such statists that intelligent people can disagree, based on principles which are forged by reason and valid alternatives, with the efficacy and desirability of government control of the economy.

The arrogance among today's elite statists knows no bounds. This pompous elevation of the state is anti-American, not the "definition of being American" -- it's contrary to the independent, individualistic, libertarian spirit on which this country was founded. It's strange how years ago the political right elevated the state, and liberal protest of jingoism was labeled "anti-American" -- now libertarians and limited government proponents are charged with irrationally working against the government with knee-jerk reactions. The pathetic game of left and right has become so ridiculously convoluted it no longer makes any sense.

The last thing we need right now is a herd of obedient sheep led to slaughter in union. Perhaps half the country has fallen for the Democrat plan, and many of those have no idea why except it was change and anti-Bush. To pretend there's a majority of Americans begging government to save them from catastrophe and a handful of knee-jerk reactionaries attempting to obstruct the Great Leader is to misjudge the situation. Obama's support is thin support, built on personality, media-hype and superficial hope of something new and different -- the problem is that there's no substance, and this will tell.

If Democrats think they have a lock on the public and can build their liberal utopia at the taxpayers' expense without immediate and palpable results, they're suffering from a delusion-disorder. There will be some patience, but when the stimulus bubble goes pop, there'll be a day of reckoning.

What we need is goold old American dissent before the bubble goes pop and we all suffer from this giddy madness.

photo from www.americansarebrainwashed.com