New Rule: neomercantilists, neoconservatives, and statists are no longer allowed to call themselves “free marketers.” People who call themselves free marketers such as Bush, Paulson, Greenspan, and Bernanke are the primary threat capitalism faces. These false prophets of capitalism are the greatest friends that proponents of socialism have. FULL ARTICLE
Source link: http://archive.mises.org/9319/enemies-of-capitalism/
Enemies of Capitalism
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TO: Pat
Pat, are you implying that in the true Free Market everyone will have as much money / Gold, as much one spends? In other words there will not be any surplus of wealth or wealth accumulation?
I though that he whole purpose of Free Market Capitalism is to make as much profit as it is possible, and the to inest the excess amount to generate even more profits…
This is my understanding of Capitalism in general.
If this is not the Capitalism we are referring to on this blog, I sincerely do apologize to the audience…
I am confused. As I said earlier. There are so many opinions and definitions of Free Market and Capitalism in general that I am totally lost in all of it…
Pardon my ignorance…
TO: gene
Totally agree with you, gene.
A Big Thank You! I couldn’t have said better! Truly written from my heart.
To pbergn:
“Pat, are you implying that in the true Free Market everyone will have as much money / Gold, as much one spends? In other words there will not be any surplus of wealth or wealth accumulation?”
No. I am saying that accumulating wealth depends on whether you can expect to exchange a part of it for something else. Money (e.g.: gold) is exchanged for something else (e.g.: land). But for that, you will need to identify who wants to exchange gold for the land. Money is simply a commodity which main use is to facilitate exchange among people. But again, this is assuming people feel the need to exchange thing among each other.
As regarding profits, this again depends on whether the capital is used in a situation in which those profits would arise (e.g.: providing services or goods that are considered as valuable to the potential buyers). It seems to me that you are considering human nature instead of the system per se. In this case, it is a different problem.
I s’pose in your analogy pbergn the hunters and farmers apparently are roughly equally wealthy – both successfully work the land in different ways. However the hunters probably hires lackeys to clean, carry, repair equipment, etc. and the farmers probably have lackeys to work the farm, maintain equipment, etc. It is probably these workers who don’t have the great deal of wealth and are low on the pecking order were the ones you were looking for.
TO: Pat
So, Pat, in other words, the Capitalism is a chase for profits, which in turn is useless, since you cannot exchange it for anything useful, which negates the very purpose of Capitalism to exist… Brrr.. Is that what I just said?!
I am loosing it, I guess…
Look, if there is no point in chasing those proverbial “tokens of exchange” (a.k.a. gold, diamonds, rabbits or lollypops) to get as much of them as it is possible, by breaking your back day and night, not sleeping well, waking up early, and getting that second mortgage and being chastised for it by everyone including your spouse does not worth it, then what is the whole purpose of all this Capitalism?!
You are not going to tell me that the entrepreneurs are just a bunch of really good guys who can’t help but do what they do, that is run their businesses no matter what, are you?!
If the capitalists were not able to exchange the accumulated excess wealth for anything useful, then, I guess it would not have been called “excess wealth” now, would it?!
There are two things I can conclude about Free Market Capitalism based on the feedback from the theory supporters like you:
1. The Free Market is a system that allows everyone do what they are good at, without any prospects of accumulating any significant amount of money or wealth, that would allow them to gain competitive advantage over the other participants, and would result in them further consolidating the wealth and strategic resources of others;
2. The Free Market is a system where no matter what the Capitalists do they will ultimately loose to their competitors and will be forced to start all over again after suffering losses due to competition (otherwise they would have become super rich, and could have gradually bought out everyone else)…
They are doomed! In other words, this fits the description of a system where all efforts are rendered futile after reaching a certain point, since they are a priori doomed by the system itself…
Not very encouraging to say the least…
to pbergn,
To make things clear I think what Pat wrote was that capitalism (the exchange of material goods) would be unfathomable unless there was someone who needed something and was willing to give up something else for it.
From this it follows people mustn’t be materially equal under the market (as thesis 1 of the above post says) for then there could be no need to facilitate material exchanges and yet material exchanges do occur.
It is also not possible for competitors to consistently lose out or balance each other out with no profits because again, then everything would be fullfilled and no exchanges could take place. This is the fabled neoclassical equilibrium.
The first surplus or profit was due to extra productive land. The fortunate one who claimed this piece for himself ended up with more crops than he could use. The surplus though was useless, unless their were others without land and in need of food or had land that didn’t produce enough. If they didn’t want to go hungry, they became indebted to the lucky guy.
If everyone was already happy, then the surplus had no value. It’s the need that values the surplus. If there is a lot of need, then the owner of capital has a lot of leverage and can act as he sees fit. If there are many with surplus, then needs are meet and surplus has little value.
The system today is no different than what has occurred historically over and over. Limit or control surplus, create or encourage need, artificially control value.
My guess is a free market is one free from these enforced constraints, where the surplus is distributed where it is needed most, not accumulated and hoarded.
Socialism is the effort to do this consciously. My guess is that is also about as possible as a truly free market.
Monopolies are not necessarily bad – a monopoly can occur (for a short while) where one provider of goods and services is simply head and shoulders over competitors (without government help, of course).
Likewise pbergn – you appear to be wedded to the idea of egalitarianism. There will be those who are more influential in any given society than others – this is a given under any social order. However, under free markets, those more influential people will have obtained their “influence” (read wealth) through productive and mutually beneficial trade.
Compare with socialism/fascism/statism as how people get their “influence”. Put briefly, a free market system is about justice.
“In the conflict between monopoly statism and the many organs of the body social (i.e., of a free people), the Left habitually made the malignant choice.”
Elegantly written. Yet, why is this so? Intellectual laziness — pathetically ignorant (and disastrous) hope that the proxies of the state will selflessly do the right thing because they are “accountable.”
By the way, thanks a lot, Inqusitor! Not! : ) You have to go mention Chomsky! My hypersensitivity allows a simple word, a name, to ruin my day. I’ve no tolerance for that rambling buffoon. I remember when he was a guest speaker during a business/technology day in Boston a couple decades ago. Of course, his meandering, dreadfully flawed mumbo-jumbo ultimately veered (as it always does) into “world hunger.” These leftists (“libertarian socialists,” my ass) are extraordinarily transparent in their avoidance of an individualist paradigm. When he spoke of starvation and malnutrition in the “third world,” he sarcastically jibed, “If we try harder, maybe we can increase these numbers [the starving] even more….” That’s when I had had enough, and departed. Note the pronoun — “we” — so ubiquitous in leftist circles. “We.” Pfffttt. Well, I don’t know about “we,” Mr. Chomsky, but I do know about “me.” And I starve nobody and do what I can to minimize the sad state of affairs. Now if you, sir, are starving people, I suggest you get off your aged ass, and change your behavior. And shame on you to admit you are starving people, whilst you stuff your face with the chicken and carrots provided by the sponsors of today’s event.
Celebrity-hood is a fascinating phenomenon. If you’re the so-called foremost linguistic scholar on the planet (doesn’t the irony just kill you?!), then you’re worthy of elite status in governmental/societal criticism. This is similar to Hollywood actors and their door-opening (aka, congressional hearing-opening) fame.
The banter on whether true socialism or true libertarianism has ever bee implemented is a red herring. The questions are these: what steps should be taken to advance liberty? What philosophy respects my rights (particularly property rights, since I own myself)? And what are the means to this end?
Is it expanding the power of the bureaucrats and politicians, or is it smashing the power of this oligarchy? Socialists and neo-conservatives tend to prefer the former.
Cheers.
F.
Libertarian Socialism definately has merit as a possible “ideal” system, if I understand their premise. They believe the “means of production” can never be justly distributed. We have no proof that it ever was or could be. The present economy and every one before it used the “means” to the advantage of the few, with little regard for economic of social principles. So, true libertarianism of any sort is also an ideal [since it assumes fair and just oppurtunity of ownership of the means] and has never been a real social system.
Libertarian Socialists believe the “means” should be owned by cooperatives or in common by those who use the “means”. This in no way eliminates private property or a true free market or gaurantees big government. If we can truly never have a free market that allows all equal oppurtunity of access to the “means”, then they have a great, big point!
As Libertarians, we have a habit of comparing our perfect “ideal” system with other’s imperfect “real” systems. It makes us feel superior when in fact it just shows lack of knowledge. We have no “real” system to boast about, unless you want to take credit for what’s out there today, and I certainly don’t.
I
Then you understand better than I, Gene. To me, the terminology is nonsense, a silly paradox, like “Marxist-capitalist” or “Christian-atheist.” And it’s a comfort zone for the arrogant blunder-busts who seek refuge in a new phraseology because as socialists, like aforementioned Chomsky, they suddenly realized what they stepped in, and the horrors that came with it. I can just hear their minds whirling, “Holy s—! These socialists are half-baked fascists. I need to add liberty to my mantra. Yeah, that’s the ticket — I’m actually a ‘libertarian socialist’!!” Cripe.
Many libertarians promote the free market not because “they feel superior.” I think most of them (like myself) just simply want to be left alone. Please don’t regard the rhetorical questions as directed towards you, Gene, whose writing I find as thoughtful. No doubt the “My ideal philosophy is better than yours but we haven’t really tried it” are indeed senseless arguments. Thus, from practical terms, what approach expands liberty, more government intrusion or less?
Which approach promotes the most direct, ethical, respectful path for each individual to pursue his dream? More government or less? Hell, if the Socialists want to tell me that they believe in a minimalist state I’ll join them and damn the semantics.
Equal opportunity of the means of production is already available. It’s available in socialist economies, capitalist economies, mixed economies, fascist economies.
Every individual has an opportunity to grab the means of production, so long as he conducts himself according to the accepted practices of the environment. In some economies, that includes bribery and violence, majority voting, thuggery, swindling, lobbying. You don’t have enough to pay off the liquor commissioner? Tough tooties. When you get the cash-ola, try again. Everybody has that same “opportunity.”
Protections against the above stated intrusions lead me to only one approach — the philosophy of negative rights, to be left alone.
To be sure, the “ideal” is always elusive. Human beings are imperfect. But I know that expanding the power of the state, taking more of the citizenry’s money, is not the route to individual respect. Follow the money trail of the so-called “libertarian socialist.” At the end of the road will be the fully accountable and selfless state-sponsored bureaucrat, ensuring “equal opportunity,” and determining if you are worthy of it.
Excellent summation of points us true freemarketers feel today. Concise and direct.
“I abandoned the principals of capitalism to save capitalism” -GWB
I see what you are saying and it makes sense. But it is a very fine balance. There isn’t much difference between the unearned advantage or whatever it takes to get rights to the means when it isn’t deserved and using that same “force” to infringe on a person’s “negative rights”, wanting to be left alone.
Banks are an example, they have controlled the “means” thru monopoly power, cartel, everything but actual enterprise and they aren’t going to leave us alone either! Unless all we do is barter, they have their hands in our pockets at all times.
People are just looking for a better way. But, I definately am NOT agruing with you at all. I am no anarchist but BIG government and big Corporations are not friends of mine. Less is more as they say!
TO: fakename / Pat
Thanks fakename for your clarification of the main premises of Capitalism. [I am well aware of them, just needed to hear them again...]
I agree with Pat and you that Capitalism is the ONLY economic theory that implies two sides – producers and consumers, whereas all other socio-economic theories imply a notion of a czar of some kind that “knows” what is good for the individual participants in the relationship…
I have no problem with people being rich or having more power than others. In fact that is exactly why I am working for and living for – to improve my material standing in the society…
What I am desperately trying to establish here is the fact that ALL the socio-economic theories have to deal with the fundamental notion of social justice one way or another, which is subjective in its nature.
For example, the Free Market theory proponents are completely forgetting the aspect that at some point of time some of the participants in the Free Market relationship will inevitably attempt to use “unjust” methods in competing against the others, as subjectively defined by others to be as such … The brilliant example of this is the bankers and the government, or the corporations and their lobbyists, etc…
What many libertarians forget, that at some point of time they will have to deal with the “root of all evil” – they will have to determine what is “justified” or “unjustified” action, such as when initiating force or trying to co-operate towards a common goal… This is true EVEN in the absence of the absolute monopoly on coercive power, i.e. in absence of the State (even more so in the absence of it).
To summarize my point – while the Free Market is unquestionably the best socio-economic theory in existence in my opinion (in terms of its ability to establish maximal social justice), it too suffers from the fundamental problem of objectively defining the “just” and “unjust”, thus invalidating all the claims of its superiority in terms of organization of socio-economic affairs, since all the other such theories, also fundamentally rely on the same subjective notion of “social justice”…
My conclusion is that NO objective claim can be made in favor of Free Market theory due to the reasons stated above…
pbergn,
I applaud your efforts to stimulate a civil and intelligent debate on this blog, and encourage you to continue doing so. It helps us all to clarify our thinking when someone challenges us to explain what we mean. This is the beauty of having a comments section after a blogged article, and this site does it better than most.
I am inclined, as you are, to see all ideologies as containing grains of truth and puzzling fallacies. I am also inclined to favor libertarianism more than the others, because the concept of freedom and the pursuit of happiness, as envisioned by our founders and described as “natural rights,” seems to generate the fairest system for humans to cooperate and to settle their disputes in a civilized fashion.
In this scintillating debate, i would ask you to better define some of the terms you use, and indicate from which ideological theory you are drawing such terms, so that we can better understand the argument.
For example, “social justice.” How is this term not redundant? How can there be a separate “justice” that is “social” from one that is political, criminal, economic, etc.? Justice is the application and exercise of “fairness” in human interactions, whether they be voluntary amongst private citizens, or between the State and its citizens. The standards of “fairness” are generally determined by the society’s prevailing beliefs (“by the consent of the governed”).
Using the term “social justice,” as it is typically used in modern times, implies a socialist notion of enforced egalitarianism, that all members of society are entitled to the same things (wealth, status, education, health care, retirement plans, or whatever), and it is the state’s job to see that they get them. Is this what you mean by it?
TO: C (The Forgotten Man)
Thanks, C.
Appreciate it. Finally someone making sense on this site…
By the term “social justice” I mean the intuitive feeling of entitlement on something, which is commonly shared by majority of humans and animals alike either in response to some action they or others voluntarily perform or simply as a result of physical or mental differences as it is persieved by the subject himself/herself/itself…
It is NOT in the egalitarian sense – sense that everyone is equal… No, sir, not at all…
For example, if you work harder, if you helped someone you feel you are “entitled” for more benefits in return such as more rewards in the material or psychological sense….
In short, by saying “social justice” I meant “natural justice”, which is still subjective in nature…
My point is, that even in Free Market Theory, one has to deal with the subjective concept of justice, such as in sports – one still needs an umpire of some sort…
I personally prefer a weak government to act as that broker – that umpire between me and other society members competing for natural and man-made resources…
Libertarians do not understand that by removing the State, considered as their enemy, they will have to deal with 100 more enemies which will be their very neighbors laying claims on all kinds of property they can get to, first… This is a direct consequence of resources being scarce, and human nature being subjective…
What I was saying is that even in the Free Market System you rely on the subjective notion of fairness in competing for your customer base.
For example, a chemical plant may start using resources of some river shared by it and some farmers, who also compete for the river water to feed their live-stock or irrigate the crops. The chemical plant pollutes the river since it needs to produce more plastic or rubber to make more profits. The farmers are NOT happy, since their crops are dying. So they assail the chemical plant owners with the righteous anger of the chemical company being “unjust”. Now, in absence of legal system and some kind of umpire, such as the State to enforce some kind of environmental protection laws, there is no way to uphold the natural justice or the “social justice” as I called it incorrectly in my previous post…
You see the dilemma?
That is why any claim that the Free Market System in particular, and Libertinism in general, is “better” than other rivaling ideologies is subjective, since these concepts are also relying in their core on the subjective nature of man to justify his actions…
That’s all I am saying. One has to be objective…
pbergn,
In professional sports the umpire is hired by the league and is under contract. Not so in the world of states.
See Ayn Rand’s _Capitalism: The Unknown Ideal_ for a profound, comprehensive, consistent, principled, integrated, systematic understanding of capitalism.
Capitalism is the politics and economics of individual rights.
The individual needs to be free of initiated force from other so that he can use his mind to guide his actions. Capitalism is based on reason, not mysticism or subjectivism. Austrian economics, esp. Mises, must be split from subjectivism or it will decay into libertarian nihilism.
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