I’ve quit counting the complaints I heard from the left about “unfettered capitalism” in the past couple of weeks. In an interview with Republican Whip Eric Cantor, a talking head inferred that “unfettered capitalism” underpins our current economic woes and the government should do something about it. To my dismay, Rep. Cantor did not challenge the premise, but seemed to suggest that Obama’s approach to reigning in capitalism was “massive” while the Republicans prefer a more “incremental” (his choice of words) approach. I just didn’t hear the clear, passionate defense of liberty and free markets I was hoping for.
References to “unfettered” or “unbridled” capitalism suggest that free markets are OK, but only to a point. Because reasonable people are supposed to reject anything in the extreme, using the term shifts the debate from whether or not government intervention is justified to how much is appropriate. It’s like the proverbial question, “When did you stop beating your wife?” If you try to answer the question without challenging the premise, you’ve already lost the argument.
When I am confronted with the term, I demand an immediate definition. If there is a hesitation, I point out that “unfettered” literally means “unchained.” If capitalism is the foundation for economic development, then why would you want to chain it? The response I get inevitably includes a justification of limits on liberty and arguments for wealth redistribution, with most or all of the sacrifices borne by someone else, namely the evil capitalist. Government is presumed to be the fair and just arbiter, ensuring that unskilled workers “forced” to work for low wages end up getting what is rightfully theirs through manipulation of the tax code or other leftist schemes. In other words, my opponent finds himself defending the merits of socialism. I not only win the argument with relative ease, but I also have an opportunity to help by opponent see the folly of his worldview.
Moreover, capitalism in the U.S. is already heavily shackled, with severe restrictions on production, pricing, employment, minimum wages, unions and the like. Arguably the most regulated industry in the country is financial services. If one is looking for a quick culprit in the mortgage crisis, it seems logical to look at the government first, not the banks. Those on the left fail to see this.
As we get closer to election time, my concern is that Republican candidates—the ostensible defenders of liberty and freedom—are either unable or unwilling to defend liberty, free markets, and the Constitution. Libertarians have always claimed that the main difference between the two major parties is one of degree. They charge that Republicans may be less socialistic than the Democrats, but they still suffer from the same mindset.
I’ve part Libertarian and I think this argument is valid in many instance. I’m also seeing a similar defenseless pattern on other issues as well. For example, the use of the term “undocumented worker” suggests that an illegal immigrant is merely lacking the appropriate paperwork; if so, a “pathway to citizenship” only seems reasonable. Amnesty for illegals is simply wrong, and candidates who seek some sort or middle ground and refuse to acknowledge this either lack courage or conviction. I’m not sure which is worse.
The reality is there’s little room for negotiation with collectivists like the likes of Obama and Pelosi on most issues. I am hopeful that the Republicans will do well in November and that they will engage Obama in the kind of tooth-and-nail battles that are sorely needed. I still fear the prospects of mass compromise (i.e., semi-socialism) should Republicans regain the House. I hope I’m just paranoid.
Brilliant! I’m paranoid too. I hope we’re both wrong!
The libertarians are right. Republicans have been a huge disappointment in the past. If they don’t get it right this time, I think a third party will emerge..
Parnell-don’t be an extremist. Politicians are elected to negotiate. I agree with a lot of what you say but a compromise is better than nothing at all. When the election is over, you have to work with what you have. Why not have another stimulus package with programs Ds and Rs can agree on? What about immigration reform that seals the borders and gives a pathway to citizenship for only the most deserving of those already here? Not passing something is the worst alternative. Compromise is possible and we can get solutions, but our politicians aren’t doing it.
So, i’ve read a few of your posts and it seems like you’re pretty good at knocking down straw men. All arguments you seem to have with liberals end up justifying “socialism” without any discussion about the real world impact of economic policies besides the amount of revenue they generate. It’s as if ‘the invisible hand’ is no longer a theory, but a God that rights all and makes sure that everything is okay for everyone. Who cares if unequal distribution is correlated to increased violence and social strife as long as more revenue is generated? Who cares about injustice and the suffering of human beings as long as your calculator shows a lot of numbers? I agree that economic production leads to greater welfare for the general population. That’s not my argument. My argument is that it’s easy to keep yourself in a bubble of self-coherent arguments without actually taking into account that these numbers being crunched actually have impact on human beings outside of bigger bank accounts.
The God of the free market does not exist and will not make everything better for everyone if you just have faith in him. Human agency still exists and responds to whatever economic theory that has been implemented. “If capitalism is the foundation for economic development, then why would you want to chain it?” It seems like there’s some sort of assumption here that more money equals ‘everything in the world is okay and there’s nothing to worry about.’ People will try to take advantage of any system at the expense of others, capitalist, socialist, or whatever. To believe that all you have to do is let capitalism run itself is to deny this fact.
And it’s interesting that you claim liberals always fall back on defending socialism, when your fallback is to appeal to terms like ‘freedom’ and ‘liberty’. (buzzwords that elicit emotion in everyone because people make those words mean whatever they want them to mean for whatever goal they’re trying to achieve.)
“I have found that most who attempt to debunk the Laffer curve seem to be less interested in economic reality and more interested in advancing a socialist worldview.” So, you accuse liberals of just unquestioningly trying to defend an economic worldview, when you seem pretty interested in unquestioningly defending an economic worldview that you’ve been socialized into your entire life and to question any of its premises would be blasphemy. That is why you just fall back to repeating words like ‘liberty’ and ‘freedom’ to defend yourself as the socialist falls back to using words like ‘equality’ and ‘economic justice’. The “the sacrifices borne by someone else” help to sustain a socialist economy. Who’s sacrifices help to sustain a capitalist economy? You as a person very knowledgeable in economics should know, nothing is free. And by holding on to your worldview you are deciding who pays to maintain the system you support. You are equally as guilty as the socialist in that you are deciding what “sacrifices borne by someone else” will pay for your economic well-being. Unless you are of the belief that the free market is benevolent and just in the same way that a God would be. If so, it’s no longer an economic theory, but a religion.
Thank you for listening,
-fernando
p.s. I am not an economist.
Interesting and thoughtful Fernando, although I disagree with most of what you said. BTW, I’m not an economist either; my PhD is in business. I’ll comment on a few of your points.
You referred to the invisible hand as only a theory. You can question the outcomes of the invisible hand (i.e., the market), but you can’t really question its existence. The free market exists. You really seem to be questioning whether the invisible hand produces the kind of outcomes you want to see. This is a different debate.
Here you suggest that I’ve made it into “a God that rights all and makes sure that everything is okay for everyone.” I’ve never made such an argument. No economic system generates maximum outcomes for everyone. However, if the invisible hand is not allowed to deal with problems of supply and demand, then someone else must intervene. That someone is the government, and that intervention is inefficient, distorts markets, creates unintended consequences, and encourages politicians to redistribute wealth (i.e., buy votes) in the name of social justice.
Rejection of the invisible hand has produced trillions in debt because politicians can’t resist spending money they don’t have. It’s lead to massive spending on a “war on poverty” with little to show for it except increases in illegitimacy rates that perpetuate more poverty.
The truth is that there is no free lunch and it’s time we face it. I don’t have a right to someone else’s property just because I think I need it. Attempting to solve group A’s problems by taking from group B is not only ineffective, but immoral. Perhaps this is where you sense some religious (your term) fervor in my posts. Socialists want to solve OUR problems with OUR resources, as if all problems and resources are collective. Leftist politicians are stealing from me and my grandchildren to finance unworkable and unsustainable “solutions” to world problems. They have created an entitlement mentality whereby millions of Americans believe they should have more than they can offset by their own production. It’s killing our country.
For the record, some problems are collective in nature and require collective solutions. National defense, a judicial system, and paved roads are a few examples. The US Constitution authorizes government invention in these areas. I am not arguing for anarchy, but for “ordered liberty” with a Constitution as its basis.
I’ll stop here…
Fernando–LIBERTY and FREEDOM are not emotional buzzwords to me. They are rational concepts. I get to acquire and management my own property and I have no right to yours. What I choose to do with it is my business. The government should only get the $ it needs from me to meet its constitutional obligations, nothing more.
Fernando you really struck a nerve with me. I am tired of having to justify capitalism. How about for once you justify your liberal beliefs? If liberals had free reign to do everything they wanted – raise taxes, fund every social program – in search of “social justice” would they stop there? Of course not. In short time, some additional grievance or unmet need would be identified and off we go again. More taxes, more spending. When has the left ever abandoned a program because it didn’t work? Never. The answer is always we are not spending enough on it or there is some “ism” at work – racism, sexism, whatever.
The left rarely has to justify the success of their programs. It is always that we are not spending enough, meaning that the ultimate strawman “rich” aren’t paying their fair share. Wher is the evidence that liberalism-socialism works? Look at just about any city and several states throughtout the country for evidence. Those places that have been under Democrat political control are in bad shape. When is enough enough?
The truth is that deep down we are not all created equal. Some people are more gifted, harder-working and yes luckier than others. In the quest to make everyone equal we are destroying our country. Let’s not even get started on how bad it is for our less fortunate. Sure, everyone wants a better life. But many of our poor are obese, have cars, houses, cell phones and TVs. And where do you draw the line? Is poor 1x, 2x, 3x the poverty level? Is it a right that everyone have food, housing, clothing, cell phone, transportation? Seriously, where is the line?
What the left really wants is to tear down the more successful among us. I don’t think they are truly interested in helping the so-called poor. If they were, they’d be in Haiti or Africa or India.
It is time we stop trying to fix everything all the time. Let people fix themsleves. A little personal responsibility goes a long way. Frankly, it is immoral that we give so many people a free pass. Look at the statistics on the black family pre and post the “war on poverty” and Great Society programs. They are terrible. The unintended consequences of these programs destroyed years of progress and hurt the chances of generations.
In a civilized society we should have ample safety nets. And in the US we proudly have more than anywhere, ever in the history of the human race. We should preserve those programs for those that need them, but the idea that the government has to provide a way of life for people who are completely capable of making it on their own is what is wrong.
Capitalism works. It is sometimes not pretty because we as people are flawed. But indisputably, out capitalistic society has produced previously undreamed of wealth, health, technology, comfort and leisure time.
It is open to anyone who wants to participate. It is all voluntary. Your socialistic society is not. People are grouped and pitted against each other. People are coerced into participating. It is all wrong.
The left’s compassion has been elevated to a politcal principle. Millions have been brain-washed in the process. There are no humane and workable solutions in what you are offering.
Thank you for the good conversation everyone.
Dr. Parnell,
I agree that there is an invisible hand. I also agree that there are outcomes that i would like the invisible hand to produce. The same way that everyone who is a proponent of any economic model wants to put their model into practice to produce a desired outcome. My criticism is that, like the implementation of any policy (it requires human interaction to put any policy into place) the ‘invisible hand’ also produces unintended consequences. There have been monopolies in the past that ended because of human intervention. Just as the government is capable of doing, a corporation is capable of creating dependency by means of controlling goods. (oil, for example) If an oil monopoly chose to raise its prices, the invisible hand would intervene and force the prices to drop because people will find new means of transportation. There is nothing stopping someone from manipulating the system and raising prices temporarily in order to cash in merely for the purpose of greed, causing the economy to collapse and then just getting out of the business and living their lives. People will find a way to manipulate any system in place. Saying that unfettered capitalism is the only way to produce a strong economy is like saying that getting rid of the fire department and safety regulations would cause less fires to happen. The difference between businesses and government is that, according to our constitution, we are able to hire and fire those who create the dependency. There are checks and balances in a constitutional republic. There are no checks and balances in ‘unfettered capitalism’, evidence by virtue of the very definition. Removing the government removes a check, thus making it ‘unfettered’. It’s pretty obvious to me that government can intervene too much, just as it can intervene too little. At the same time, it seems unrealistic that no single entity would try to fill a power vacuum created by a small government. Take away the checks on large businesses, and then we have another powerful entity trying to bend laws and the constitution in the direction that would benefit them the most. People are clever, and if they find a way to make maximum profit at the cost of your freedom, they will do it. There are warlords and dictators and business men that are filthy rich and don’t give a darn about the well-being of their citizens because citizens have no means of balancing their power. So, weaken the government, and someone will fill the vacuum and the unintended consequence is that the entity filling the vacuum might be someone who could give a darn about your rights.
As for there not being any free lunch. I agree. Behind every decision about who receives lunch (self included) there is a human agent. My deciding to have a 10 course meal that i am unable to finish and end up throwing in the garbage, means that there are 9 people out there with no meals. I don’t have to share my food. In fact, i can just buy tons of it and not eat any of it. During an emergency you have a right to purchase shutters to protect your home from an imminent hurricane. In an unfettered economy, wouldn’t i have the right to purchase ALL shutters available and sell them to you a huge markups leaving you to have to choose between protecting your family or your nest egg or child’s college fund or medical bills? I, the same as the government, have just decided what property you can have and at what cost. I am lucky enough to have my health, but i imagine that without my health, i would have a hard time experiencing freedom or liberty if one person’s economic decision took away from my well-being. If you have weak laws or weak police, people will try and get away with all they can. With a weak government, people will try and get away with all they can. Can the government solve all of our problems. Obviously not. But neither can creating a power vacuum and un-policed system of societal interaction. Getting rid of the cops does not lower crime.
I believe that the constitution and the system it has created is what allows for an “ordered liberty” as you do. It seems like a part of the disagreement is that on one side there is an assumption that the increase in government power will, necessarily, lead to the destruction of the constitution. While my position is that weakening government in no way guarantees the protection of the constitution. Too much government and the constitution might go away. Too little government, and the constitution might go away. I agree with both of those statements. My belief is that the constitution provides enough checks and balances that government can intervene in matters like healthcare, social security, thus ensuring the most amount of freedom to the most amount of people so that there is a deeper pool to scoop from in order to spur innovation, creativity, and scientific and social progress. Capitalism and socialism by themselves can be pretty good at creating a mess. Socialism, by itself, makes the entire pool more shallow by taking away incentive, capitalism makes a small portion of the pool very deep, but a large portion of the pool is nearly dried out. But mixing them in the right proportions, i believe, can lead to greater advancement, human flourishing and freedom than either can alone. So, what’s the right proportion? Danged if i know.
Thanks for your response Dr. Parnell.
TDR, thanks for your response.
LIBERTY and FREEDOM, just as SOCIAL JUSTICE and ECONOMIC JUSTICE and EQUALITY are all based on value judgments. Freedom for whom? Social justice for whom? Freedom for TDR or freedom for as many people as possible? Is lying in bed with a debilitating disease freedom? If you work hard and make money to pay to cure yourself of a debilitating disease, but i decide to use my economic power to prevent you from getting that cure through legal means because i want to be filthy rich, are you still free?
Unless you’re living off the land in the woods without any kind of technology, then your actions are very likely impacting someone else and others’ are impacting you. Every time you use a resource, it is one less resource for someone else to use. So every economic interaction that you partake in is decides who does and who doesn’t get something. If i am free to throw rocks at you whenever you walk down the sidewalk, are you free to walk on the sidewalk?
If FREEDOM and LIBERTY are rational concepts, then EQUALITY and SOCIAL and ECONOMIC JUSTICE, are equally rational and equally valid regardless of how vague they are. All these words are words meant to elicit emotion in people. And the reason they do, is because people interpret the words in whichever way is most beneficial to themselves.
The South fought the North in order to have their FREEDOM and LIBERTY. All the while, their victory would have meant the continued enslavement of millions of people. So, i ask again. Freedom for whom? In the same way that every Southerner who was fighting for the FREEDOM was actually an oppressor, I ask myself as often as i can. Who’s FREEDOM do my actions and decisions take away from? So, if you can use the words FREEDOM and LIBERTY to justify the oppression of millions of slaves during the Civil War, how rational are the words FREEDOM and LIBERTY really? In the same way that people can use the words EQUALITY and SOCIAL JUSTICE to oppress others. I value all of those words. I also know that they all need to coexist to make sure that none are misused and can be challenged, even if they all might run into each other sometimes.
I appreciate your passion TDR. Thanks again for your response.
Sorry for all of these posts. I’d like to be able to respond to everyone who commented on my post.
Jeff,
I’m glad you chose to respond to my post.
I have no problem justifying my liberal beliefs. I have done some of that in above posts.
A government program that is being abandoned is Medicare Advantage because it costs too much.
The evidence that Liberalism and Socialism works is that there are many socialist institutions in this country that have been in place for a very long time and people don’t want to get rid of them. Are they the most efficient. Probably not. But the fact that people don’t want them to go away seems to imply that it actually works for some people. Public schools for example. Social security, medicare, unemployment benefits. These are all socialist programs. Also, recent studies have shown that states with a higher average income are more likely to vote for a Democratic president. One theory is that places with liberal values are more likely to attract people interested in innovation and creativity, rather than places with conservative values that seek to maintain more traditional values and practices. For example, a gay person who is highly skilled and talented with non-traditional values is more likely to move to a place that values diversity. I don’t know if this explanation is true or not, but i certainly find it interesting. (the book i got this from is called Red State Blue State Rich State Poor State)
Where is the line? I don’t think that is answerable. Or rather, there is no line. There is no line, because we live in a political system that changes and responds to present circumstances. As long as our Republic exists, it will move left and right and balance itself out. There’s a documentary about the Iraq war where someone asked “Who will stop the United States?” Someone answered: “No one can stop the United States. They can only stop themselves.” The debate between capitalism and socialism will never end, because neither will end up winning out over the other completely. Our system is set up so that this back and forth will continue. So, there is no line, because the pendulum is always swinging back and forth.
Liberals are in Haiti, Africa, and India. They are the ones who run the non-profits that have made some improvements in the lives of many people in these countries. We also give lots of foreign aid to impoverished countries.
Please tell me more about these statistics that are so terrible. If i remember correctly, pre-“the war on poverty”(1964) segregation was legal and blacks couldn’t vote in many parts of the country. Are you saying that blacks were actually better off economically before they were allowed the freedom to vote or get jobs because of their skin color? (1964 Civil Rights Act) That seems highly unlikely.
“And in the US we proudly have more than anywhere, ever in the history of the human race.” This is quite inaccurate. The entire debate is about the amount of safety nets that the government should supply to its citizens. There are many, many countries that have stronger safety nets than the US. Prior to Social Security (a socialist program), if you were old, you were very likely to be poor. By the very fact that you are a proponent of safety nets, it seems like you are arguing for a limited role for socialism within our capitalist economy. I agree with you.
Thanks for responding.
A few miscellaneous thoughts, Fernando.
There are a number of studies that estimate what we spend in the war on poverty. This analysis is fairly comprehensive and puts the current total at ~$1 trillion per year. It seems to me that we could have won this war by now. Even if you quibble with the numbers a little, we don’t get much bang for the buck.
http://www.brookesnews.com/081509welfarepoverty.html
Don’t confuse Constitutional/limited government with anarchy. Analogies about fire and police protection, national defense, etc. aren’t good arguments because these are appropriate (Constitutional) activities. We NEED a government to protect us from the lawless and from invaders, and we also NEED a government to provide a commercial infrastructure (court system, etc.). There is a role for government, but it’s a clearly defined and limited one. “Unfettered” doesn’t mean anarchy.
You are arguing for a middle ground between capitalism and socialism, but this is a serious flaw because one works against the other. For example, the earned income tax credit (EITC) is a clear form of socialism because it GIVES money directly to low income earners. If someone gives you money, what incentive do you have to work harder to earn your own? Captilism depends on the notion that each of us must take personal responsibility for earning our own way. If you remove that responsibility, you destroy the foundation of capitalism.
You also suggest that unfettered capitalism allows some individuals to take advantage of others. Let’s consider your example of puchasing all of the shutters during a hurricane. The visible and invisible hands address this problem. The shutter maker is performing a service by producing a product for which there is only modest demand EXCEPT during an emergency. If there’s a lot to be made in the shutter business, more producers would step in and the price would come down. Besides, if the price of shutters skyrockets during an emergency, homeowners could simply wait until it declines.
Consider a similar example. Hotels charge higher rates during special events. Is this fair? Absolutely, and for 2 reasons. First, many hotels could not afford to operate during the entire year if they could not make large profits during such times. If they weren’t allowed to charge the higher rates, they wouldn’t exist and NOBODY would get a room! Second, the higher rates encourage buyers to conserve. I might prefer to rent 2 rooms for my large family, but at a higher rate I might only rent one. This provides an extra room for another family.
The point here is that government does not constitute the best check and balance on business. CONSUMERS PLAY THAT ROLE. Businesses can’t just take advantage of us at a whim if we make responsible choices. Socialism takes the emphasis off of individual power and responsibility and shifts it to government intervention. You are giving business much more power than it really has. A company can only survive if it pays enough to attact workers and provides a product or service at a price customers are willing to pay. YOU–THE CONSUMER–ARE IN CONTROL.
Finally, you ponder what might be the right combination of capitalism and socialism. Take a look at history. We know that socialism (communism in the USSR, Cuba, North Korea, etc.) is an utter failure in terms of both human dignity and economics. We know that the standard of living rose exponentially during period of relatively unfettered capitalism (the US until FDR). We also know that combining the two has led to massive debt and a burgeoning welfare class (Europe and the US today). Even the growth of China can be attributed to its movement away from socialism. Capitalism without socialism has proven to be the only sustainable growth-oriented economic system. It’s also the only moral system because it respects personal property rights.
if you all don’t mind, i think i’d like to make a few comments/observations.
first – i appreciate the civility and willingness to listen in order to understand in the exchange between parnell and fernando – this is the first step, in my opinion, toward a productive political system.
second – both of you have admitted that you are not economists. i wonder, have either of you ever compared smith and marx? i think it would be instructive for both of you to really examine or reexamine what they’ve written and then examine or reexamine how they are different. more importantly – look for the agreements between them. i think you’ll both be surprised. for example, they both saw and focused quite extensively on the class system. did you all know that? smith only bet that the middle class would side with the wealthy, while marx bet the opposite. it is the nuanced reasoning behind these bets that i think might be interesting for you to reexamine.
third – i see in the conversation arguments being made by fernando that seem be using human impact on individual people as the guiding ethic, while parnell’s arguments seem to be using economic impact on individual people and personal property rights impact on individual people as the guiding ethics. it seems like this difference is really going to prevent any productive output of the conversation. what i’d like to challenge you both to do is to evaluate the focus of your ethic. fernando – does the human impact ethic you seem to be using evaluate the impact on ALL individuals, even the wealthier? and, parnell – does the economic impact and personal property rights impact ethic you seem to be using evaluate the impact on ALL individuals, even the poor? perhaps the conversation might go further if you can come to an agreement on how best to evaluate the outcome of any system, socialist or capitalist. until you can do so, you’ll probably continue to challenge each other, point-counterpoint, and it seems from both your well-informed responses that neither of you is likely to budge.
i’m asking this because it seems to me that neither ethic applies to all groups. parnell – i’m wondering how the ‘invisible hand’ (i use the term here as i am reading it being used by you – hopefully i’m reading it correctly – but i do encourage you to go back and read or re-read smith and his meaning – you might be surprised)…anyhow, i’m wondering how the ‘invisible hand’ can truly allow the consumer to determine what’s best for the consumers as a group if not all consumers are represented fairly? not all consumers can buy a luxury vehicle, for example. for any of those individuals that represent the demand curve below the price point (where demand curve meets supply curve), they cannot buy their way into being represented in the free market. you might argue that those individuals are not actually consumers, then. but, they might be affected (often usually are affected) by the choices of consumers who can afford to buy that vote, must deal with the consequences (or even sometimes enjoy the benefits) of those votes but do not have a say at all.
and finally, parnell – you write, “take a look at history. we know that socialism (communism in the USSR, Cuba, north Korea, etc.) is an utter failure in terms of both human dignity and economics.” i challenge you to consider your terms and their definitions. were the systems of government you identify socialist? or were they communist? there is a difference. i would present other systems of governance as socialist, if i were to choose. and in those cases, if you use your own personal ethic for evaluating success, of course, you might see them as a failure. but, if you ask some or, i would argue, many individuals living in these socialist societies if they are pleased with the outcome, you might find they are quite pleased. of course, i think you will also find people that are not. my point is, though, that the ethic you use to evaluate might be very different than another person’s ethic. and that’s the important thing to keep in mind here. neither ethic is right! but each is right for certain people. this is the source of the conundrum, really the seed of the disagreement. whose system should win? there is no right answer here, as, as i have pointed out, you both seem to be evaluating it on quite different standards.
alright, self-disclosure: i am a friend of fernando’s and (shocker!) i tend to agree with evaluating the human impact more than the economic impact and my own focus is on the more disadvantaged groups, not the wealthier groups, so i personally place more weight on the impact to this group than i would place on the impact on wealthier group.
as a final note – i’d like to say that i try, often times failing miserably, to live my own life by the golden rule – if i wouldn’t choose a fate for myself, how can i expect to choose that fate for someone else? recognizing how i contribute to sustaining the system that makes it easier for some individuals and harder for others, globally, i can definitely see myself as willing to be wealthy, but it’s a lot harder for me to see myself as willing to be living in poverty. that’s why i tend to weigh more heavily the human impact on the more disadvantaged.
thanks for listening….!
okay, that is all. thanks for letting me insert my opinion.
suzie
Suzy–I don’t think it’s an admission not to be an economist! I am quite familiar with Smith, Marx, and others, but I’ll hesitate to get into a deep discussion on their original writings; nobody else would read it.
It’s fascinating that you seem to defend socialism (at least to some extent) on moral grounds. My primary argument for capitalism IS moral! Capitalism respects property rights. Without such respect, there is no personal liberty or political freedom either. In my view, capitalism is the ONLY ethical economic system. Socialism–by definition–violates these rights by taking from one to give to another. This is not ethical.
My secondary argument for capitalism is workability. The capitalist system is the most productive for the most people. Examining the human impact falls into this category as well. If you really care about people, then support capitalism. It raises the standard of living for rich and poor alike.
I read your luxury vehicle analogy. You are right when you infer that people with more capital have more power in a capitalist system, although this is not true from a voting standpoint. But what’s the alternative? If I have more capital, then I am paying more of the taxes and I have more to lose. I should have more power. This right was earned, either by me or someone else to left it to me.
Alternatively, should government be empowered to neutralize the influence that my capital has given me? If so, then WHO gets to decide what is taken from me and how it will be redistributed, and how is this process ethical? Why are you a better judge than me of how I should spend my money? What gives you that right? If you defer this responsibility to government, then voters can simply elect candiates to pick the pockets of the rich and redistribute to the masses. Rejection of capitalism always leads to a situation whereby government gets to decide what one group of people must give another. This is fundamentally immoral.
BTW, I applaud your attempt to live by the golden rule; I do as well. But remember, the golden rule says that I should do to others as I would have them do to me. It’s a personal decision. It says nothing about EMPOWERING THE GOVERNMENT TO CONFISCATE SOMEONE ELSE’S money to do what I think is moral.
I agree with Parnell. Capitalism is the only moral system because socialism gives the collective the right to steal from the “RICH” through their politicians. Socialists (and even those who want a mix of socialism and capitalism) do not have the moral high ground.
hi parnell,
thanks for the response and the opportunity to join in the conversation.
i’m wondering if you’d be willing to respond more directly to what i’ve written?
it seems i didn’t make my point clear, or clearly. you open by writing that it is fascinating that i defend socialism on moral grounds. you also ask ‘why are you a better judge than me…?’
my point is precisely that there are two systems of ethics being used in this debate – one by you and the other by fernando. i left the question at the end of my comment open – who is right? who is correct? you can no more say that your ethical standard is correct than is mine or fernando’s, any more than i can say that your ethical standard is not correct. we cannot agree or disagree because we are all using different ethical standards.
i understand that you believe that capitalism is moral. and i think you have picked up on my leanings towards a more poor-centric system of governance. the problem – and this is what i think is worth reiterating because it seems like the point was lost in my last response – is that until we have a common standard of evaluating socialism and capitalism, we cannot have a productive conversation on this topic because we will all continue to evaluate the systems of organizing society differently based on different ethics (and, therefore, different morals).
my invitation to both you and fernando is to move to that conversation – the conversation where you might locate some agreement on how to evaluate these systems.
i also think it is worth mentioning that categorical statements such as “rejection of capitalism always leads to a…” can rarely be adequately defended. they also commonly prevent any room for common ground in moving from an adversarial conversation to one that might actually produce some sound policy. rejection of capitalism cannot be said to ALWAYS produce anything. between the two of you and the seemingly informed approach you are both taking, it doesn’t seem difficult to imagine the two of you coming up with something here.
also, you wrote, “rejection of capitalism always leads to a situation whereby government gets to decide what one group of people must give another. this is fundamentally immoral.” immoral? i can’t say for you – because this statement is based on your ethic. but, i want to provide an example: our government requires employers (a group) to give wages to employees (a group). the government does not equally require employees to provide a particular service or quality of service for that wage. is this fundamentally immoral? or do you expect the invisible hand to govern this situation? because there was a time when that was left to the invisible hand and i am quite sure that you would not put yourself into many of the working conditions that were driven by a focus on profit without concern for the human impact.
the point is that these types of statements are very difficult to defend, and signal an unwillingness to examine the possibility that exceptions occur and perhaps deserve some examination in order to draw the lessons out. that it what i’m encouraging you to do – open up some space for the nuances attendant to the invisible hand, the free market, capitalism and socialism, and any other idea in your own head or in another’s with which you might disagree. this generally leads to a rich discussion and production of robust understanding about any given topic, a place where we can see the positive and negative.
as for marx and smith – i don’t know if your readers would be interested or not, but i do think it would be educational in the very least to hear at least your cursory remarks on the agreement between marx and smith.
and, i also think it is important to underscore the point that communism and socialism are not the same thing. it is difficult to imagine socialism as communism-in-disguise any more than as capitalism-in-disguise. socialism has elements of capitalism and communism included in its theory and in the application of that theory in socialist states. for example, a socialist state encourages the pursuit of capital by entrepreneurs in order to ensure tax revenue and jobs for individuals less inclined toward the pursuit of capital for the sake of pursuing capital but interested in pursuing a ‘better life.’ this is an element of the free market – an element from capitalism. the socialist state also considers the disadvantaged and seeks to provide opportunities for care, to ensure basic human rights like access to food and water. and some of these societies consider housing and health care to be a basic human right. the point is that the socialist state is examining both the wealthy and the poor and trying to find a middle path that accommodates BOTH groups.
now, i can imagine that you disagree with this approach because it fails to meet the standard you seek based on your personal ethic. the good news? you don’t live in, say, sweden. so you don’t have to be subjected to this system.
the point? that it might be worth loosening what seems to be a commitment on your part to a rigid adherence to the invisible hand. you might begin to see some legitimate failures of capitalist policy. and, with an adversary that can do the same from the socialist perspective – who knows? you all might come up with an entirely different system that is not socialist, or not capitalist, but original. it’s a tall order, i know. but, i can say with a lot of confidence, that without that sort of willingness to examine the shortcomings of others’ and your own perspective, we are likely never to develop new ways of thinking because we won’t be able to collaborate with other brilliant minds simply because they have a different ethic than our own.
thanks again for the opportunity to respond!
Interesting thoughts again Suzie, but I will resist the temptation to respond the second time around. I usually don’t comment much after original posts to allow others to take the conversation in different directions if they wish. Perhaps someone else will feel inclined to post a reply!
I can’t help but respond! Suzie, I think you and Fernando have some interesting views and I appreciate the fact that you are trying to be intellectually honest. I read this blog a lot and I hear Parnell on Wilkow and I know he tries his best to be fair. I happen to agree with him, and I will respond to one of your examples. You said that “our government requires employers (a group) to give wages to employees (a group). the government does not equally require employees to provide a particular service or quality of service for that wage. is this fundamentally immoral? or do you expect the invisible hand to govern this situation?”
This is a nonsensical example. We don’t need a government to require that employers give wages to employees. Nobody would work if they didn’t. If you are referring to a minimum wage, there’s really no need for this either because workers would only take the job if they believed the pay they received was worth the effort. Why should the government require employees to give a certain quality of service for the wage. If the employer and employee can’t agree, then they can go their own ways. The government is only needed to enforce the contract that the employer and employee made voluntarily.
The market (or invisible hand) solves all of these problems. Employers pay as much as they have to pay to get the workers they need. They only produce what people are willing to buy. Consumers make quality judgments about products available to them and spend their own money as they please.
If government determine how much people should earn, then employers might not be able to produce useful products because the market doesn’t support the wages required. This puts people out of work. If the government dictates what is produced, then people don’t get what they really want. Other than enforcing contracts and maybe some basic safety requirements, I don’t see how a government role is productive at all.
Hey Suzy, you’re right that capitalism isn’t perfect but it’s BY FAR the best system available. It doesn’t steal from the productive to give to the nonproductive. It doesn’t allow one group of people to determine what another group has to do with its money. It maintains the natural incentive to work by rewarding productivity and punishing laziness. Besides, we can’t afford socialism. Look at what its doing to Europe and the US. Our debt is killing us and we can’t balance the budgets by raising taxes. The only solution is more productivity, and you don’t get that by redistributing income.