Posts tagged with: Economic ideologies

In an era where socialism is (inexplicably) once again in vogue, we should ask, “What would life be like in a world without capitalism?”

The Fund for American Studies has produced a superb It’s a Wonderful Life-style video that not only shows what life would be like if we banned free enterprise (i.e., a lot like Soviet Russia) but also makes the point that when you lose economic freedom you lose other freedoms too. As the angel says, “When you take away the carrot, all you’re left with is the stick.

My favorite part of the video:

Anti-capitalist activist: “I just wanted to get rid of the greed. I didn’t want to get rid of my microwave, my air-conditioner. . . ”

Angel: “Your Xbox.”

Activist: “My Xbox is gone?”

Angel: “Yeah, well, in this world that greedy Bill Gates work in a bowling ball factory in Akron. Lose-win, right?”

millenials-phonesA recent national survey by the Harvard Institute of Politics finds that a majority of Millennials (18- to 29-year olds) do not support capitalism as a political theory. One-third of them, however, do support socialism.

As a rule, I try not to put too much stock in such surveys because opinion polls make us dumb. But it’s become obvious that a significant portion of younger American are truly so under-educated that they truly believe socialism is preferable to capitalism.

Perhaps the problem is merely one of language. The reality is that the most ardent “capitalists” don’t like “capitalism” either.

Capitalism is merely an economic system in which the modes and means of production are mostly or entirely privately owned. That’s a rather broad categorization that includes such systems as corporatism, crony capitalism, social democracy, state capitalism, and welfare capitalism. Even those of us who can be described as “capitalists” would reject most of the other forms of capitalism we don’t like. (Which is why we tend to dislike the  unhelpful word “capitalism.”)

What many of us (I’m tempted to say true capitalists) prefer is not an amorphous capitalism, but an economic system that is outgrowth of the natural order of liberty: a free economy. There’s no agreed upon term for the system of a free economy (which is why capitalism is often used as a substitute) but it includes free people engaging in free enterprise in free markets. A free economy is not a laissez-faire, each-to-his-own system of consumerism. It’s a system in which people are allowed to use their resources and abilities most effectively to serve others.

My naïve hope is that if more Millennials understood that capitalism is mostly used as a derogatory term free enterprise and economic liberty, they’d realize that they really do support it after all. But in case they aren’t convinced here are five reasons why you, young Millennial reader, should support capitalism:

walter_williams2On this day in 1936, Walter E. Williams was born in the city of Philadelphia. The George Mason University economist is famous for his classical liberal views, often arguing that free market capitalism is not only the most moral economic system known to mankind, but it allows for the creation of the most wealth and prosperity. He has discussed many diverse themes, including: race in the United States, politics, liberty, education, and more. A prolific writer, Williams has written ten books, dozens of essays for scholarly journals, and hundreds of newspaper articles.

In honor of turning eighty, here are ten excellent quotes from Williams:

At the beginning of each semester, I tell students that my economic theory course will deal with positive, non-normative economic theory. I also tell them that if they hear me making a normative statement without first saying, “In my opinion,” they are to raise their hands and say, “Professor Williams, we didn’t take this class to be indoctrinated with your personal opinions passed off as economic theory; that’s academic dishonesty.” I also tell them that as soon as they hear me say, “In my opinion,” they can stop taking notes because my opinion is irrelevant to the subject of the class — economic theory. Another part of this particular lecture to my students is that by no means do I suggest that they purge their vocabulary of normative or subjective statements. Such statements are useful tools for tricking people into doing what you want them to do. You tell your father that you need a cell phone and he should buy you one. There’s no evidence whatsoever that you need a cell phone. After all, George Washington managed to lead our nation to defeat Great Britain, the mightiest nation on Earth at the time, without owning a cell phone.

Democracy and liberty are not the same. Democracy is little more than mob rule, while liberty refers to the sovereignty of the individual.


Blog author: jcarter
Thursday, March 31, 2016

An Ethicist Reads The Art of the Deal
John Paul Rollert , The Atlantic

Donald Trump succumbs to the age-old temptation to see capitalism not as an economic system but a morality play.

Welfare System Is ‘Anti-Work,’ Researchers Say
Mariana Barillas, The Daily Signal

The war on poverty is a war on work, the authors of a new book that criticizes the nation’s welfare system assert.

Again, What Is Economic Freedom?
Jeffrey Tucker, FEE

Quite often when I am interviewed, I get the question: What precisely do you mean by “capitalism”? It’s an excellent question. The great debate among capitalism, fascism, and socialism suffers from a lack of clear language.

Nafta May Have Saved Many Autoworkers’ Jobs
Eduardo Porter, New York Times

There are still more than 800,000 jobs in the American auto sector. And there is a good case to be made that without Nafta, there might not be much left of Detroit at all.

23-VIEW-master675Under the feudalistic societies of old, status was organized through state-enforced hierarchies, leaving little room for the levels of status anxiety we see today.

For us, however, status competition ranges wide and free, leading to multiple manifestations and a whole heap of status signaling.

Such signaling is as old as the free society itself, of course. Whether sending their children to fancy classes and fencing lessons, accumulating ever-expensive luxury goods, or boasting in the labels of their fair trade coffee and the nobility of non-profit activism, aristocrats have always found ways to signal their superiority.

Yet these preferences have shifted over time, the present form of which is carving out its own unique space. In a recent report from the Adam Smith Institute, Prof. Ryan Murphy explores the situation, noting that while past generations were more concerned with “conspicuous consumption” and “keeping up with the Joneses” – chasing faster cars and bigger diamonds – the current pursuit of status has adapted toward “conspicuous authenticity.”

We are now seeing a “new status signaling,” Murphy observes, where society has “moved beyond associating ostentatious displays of wealth with high status,” opting instead for behavior that signifies we are above and beyond such base behavior. (more…)

JMMIt’s a new year, and I’ve had occasion to do some retrospection on various things, including the Journal of Markets & Morality. The Fall 2015 issue is at the printers, and that marks the completion of 18 years of articles, reviews, essays, translations, and controversies. (Subscribe today to get your copy!)

Here are the top 5 most downloaded articles from the JMM website (which went live in 2012):

1) Svetozar Pejovich, “The Effects of the Interaction of Formal and Informal Institutions on Social Stability and Economic Development,” Journal of Markets & Morality 2, no. 2 (Fall 1999): 164-181.

The purpose of this paper is to develop a testable theory—the interaction thesis—capable of explaining why there are differences in economic stability and growth rates between various countries; or, stated negatively, why less efficient countries do not duplicate the economic policies of more successful ones. The interaction thesis identifies the interplay of formal and informal rules as a principal factor affecting economic stability and growth rates. Furthermore, the thesis also sheds light on how the method of choosing formal rules is a major circumstance upon which the interplay of formal and informal rules depends.

sharing“There are solid grounds for believing that the first Christian believers practiced a form of communism and usufruct [i.e., the right to enjoy the use and advantages of another’s property short of the destruction or waste of its substance],” wrote Peter Marshall in Demanding the Impossible: A History of Anarchism. As evidence Marshall cites the second chapter of the book of Acts:

And all who believed were together and had all things in common. And they were selling their possessions and belongings and distributing the proceeds to all, as any had need. And day by day, attending the temple together and breaking bread in their homes, they received their food with glad and generous hearts, praising God and having favor with all the people. (Acts 2:44-47, ESV)

Marshall is (mostly) correct. The early Christians did engage in a form of voluntary usufruct and wealth redistribution. Since then, many Christians have asked why we don’t follow that sort of proto-communist model today. If the economic system was good enough for the apostles, why isn’t it good enough for modern society?

A hint at why the system is not longer used is found in the verse that immediately follows the passage cited above: