Wednesday, January 15, 2014

The Evils of Capitalism

I smile, knowing that I'm not the progenitor of the expression "capitalism is the worst economic model ever created by man, except for all the others."  Lefties hate hearing some of the truths about capitalism, and I'm happy to share some:
As F. A. Hayek points out in Capitalism and the Historians, an extraordinary collection of essays he edited and published in 1954, “The widespread emotional aversion to ‘capitalism’ is closely connected with this belief that the undeniable growth of wealth which the competitive order had produced was purchased at the price of depressing the standard of life the weakest elements of society.” This picture of economic depredation, notes Hayek, is “one supreme myth which more than any other has served to discredit the economic system [capitalism] to which we owe our present-day civilization"...

Not a day goes by without lamentations about the evils or limitations of capitalism emitted by some of capitalism’s most conspicuous beneficiaries. Barack Obama, for example, speaking in Kansas a couple of weeks ago, chided the “certain crowd in Washington” that believed “the market will take care of everything.” Of course, that is rhetorical overstatement; we all know what he means. Do we want big government, high taxes, and intricate regulation, or do we want lean government, low taxes, and the minimum regulation consistent with public safety? Or consider Does Capitalism Have A Future? a collection of essays by “a global quintet of distinguished scholars,” published by Oxford University Press, arguing that the capitalist system is teetering on the brink of collapse and it’s a good thing, too, because the socialist system that may ensue will be far better. It’s an hysterical (not in the sense of “funny”) volume, full of tired Marxoid clich├ęs about the “internal contradictions” of capitalism and impending ecological crisis, but it is also a thoroughly typical product of the comfy intellectual caste that has enjoyed all the benefits of capitalism without bothering to understand what has made those benefits possible.

Despite this anti-capitalist narrative, however—a narrative we hear repeated by “progressive” politicians and iterated in more barbaric, polysyllabic strains by academics everywhere — the capitalist system has made possible over the last century, and especially in the last several decades, the greatest accumulation of wealth in the history of the world.  England was the crucible of this modern prosperity in part because of the freedom of economic activity that it, unlike the states of continental Europe, enjoyed.  And that freedom, in turn, and again unlike the continent, was underwritten by the limited government England also enjoyed. “The rapid growth of wealth” in England in the early nineteenth century, Hayek observes, “is probably in the first instance an almost accidental byproduct of the limitations which the revolution of the seventeenth century placed on the powers of government.”  We’ve been working diligently in this country to remove those limitations.  How far will we have to sink before the people once again rise up and repudiate the elites who wish to fetter them in manacles forged by statist overreach?
Read the entire piece for details and clarifications.

5 comments:

maxutils said...

The actual quote is "Democracy is the worst form of government, except for all the others," attributed to Winston Churchill. I have never heard it referred to with capitalism ... which inarguably IS the best form of an economic system. It has several flaws, which can be easily fixed by government, but it will consistently deliver the best, least expensive products to the most people. Always. It's mathematically provable.

allen (in Michigan) said...

On the basis of historical precedent, government generally does a fabulously lousy job of correcting the "flaws" of free enterprise. Typically, those "flaws" are visible only to those hoping to profit from the application of governmental coercion on their behalf.

In fact, free enterprise is a basic facet of human nature and while it can suppressed and rendered less efficient then it might otherwise be it can't be ended. Not in prison. Not in concentration camps and not in a socialist, worker's paradise.

People with considerations of value - their time, expertise, strong backs, property - will seek to exchange those considerations of value with others to their mutual benefit. Those exchanges can be made more expensive then they ought to be, and more difficult, by government interference.

The only legitimate role of government in relation to free enterprise is to suppress the natural, human desire to take via coercion rather then voluntary exchange and even that role's subject to consideration since it's so obviously vulnerable to abuse.

maxutils said...

Any time government enters the equation, there is inefficiency and coercion. That's why we should limit it as much as possible. But... If we didn't have government involvement, we wouldn't have adequate police protection. Or defense. Or roads. or sewer lines that weren't being provided by 7 different companies... The trick is to know when NOT to involve government ... which is most of the time -- and definitely includes not providing health care...

allen (in Michigan) said...

The trick is to know when NOT to involve government

I'd put it in a slightly different way.

The trick is to exhaust all private solutions then determine if society can get along without any solutions to the problem and finally, if it's been determined that some solution's necessary and the problem's intrinsically beyond the capacity of free enterprise then propose the least intrusive government-based solution. A Hippocratic oath for governance rather then its opposite.

maxutils said...

allen, I think we said the same thing opposite ways. I was perhaps too conciliatory to government. First, do no harm, would be welcome in my book.