Monday, December 12, 2005

Capitalism as god...

Stalin got me thinking about capitalism and the right's reverence for this economic theory.

I know this will get a lot of winger's going, but yes, it is just a theory -- and some of its elements are clearly NOT demonstrable -- as opposed to evolution.

There are the comments I made to his blog:

The right's fanatical faith in capitalism has made this economic theory a premise for society and government. But these are very different things and operate under (or should operate under) different rules, priorities and regulations. But in the “right’s” view, capitalism is a goal in itself because they believe all the rest will flow from it.

For one thing, what wing-nuts forget is that in capitalist theory, the playing field is assumed to be level – that the best ideas and innovations will naturally bubble to the top and take their rightful place in the marketplace via the invisible hand of the market. This simply isn’t true in a developed economy like ours. A couple examples.

The playing field isn’t level – not even close. How else would you explain, for example, a large airline operating at a loss in a particular market just to snuff out the competition? The start-up may be more efficient, offer better service, etc., but because the entrenched ‘big-boy’ can afford to take losses in one market for a while, he can effectively squash any competition before it gets started.

Or take chip dumping – when a chip manufacturer sells his product in a market to keep the competition from getting a foothold.

Are these practices conducive to a free marketplace where innovation and efficiency are rewarded?!!?

Today, the imbalances in the marketplace are even worse. We have the government stepping in to support big energy, pharma, etc. with our tax dollars. I’m not necessarily against big business – but from my experience, big business can be a model of inefficiency! Some big business no longer uses innovation and value (to the consumer) to drive their operations – but instead substitute connections in Washington and predatory market practices to maintain their position. This is bad for ALL OF US.

Coupled with history, we don’t have to guess as to the outcomes of unbridled capitalism. Simply look to the age of the robber barons: child labor, inequitable pay for women, 7 day work weeks, sweat shops, etc. etc.

Finally, add the sentiment that “what I earn is mine and mine alone” – a return to social Darwinism -- and you have the crown to the right’s philosophy. But where is ‘society’ in this picture? Best served by capitalism goes the right’s mantra. Well, again, we’ve seen how that works back in the 19th century with people like J. P. Morgan saying "I owe the public nothing" and hiring 12 year old children to work 80 hr weeks.

People need to look beyond their own pocketbooks… beyond “I”. Sure, capitalism is a great economic system: but it isn’t a system of government or a founding principle of society.


Tavarius J. Taylor said...

Interesting reading but wishful thinking. Look forward to reading more of your views in the future.

Eric Simonson said...

re: Capitalism as theory

Actually capitalism is more like-- reality than a theory. Kind of like gravity. You don't invent it, or create it. You can theorize about it in the sense that we theorize about gravity.

Take your even playing field for example. I have never read in any 'capitalist literature' that playing fields are always equal or are assumed to be equal.

In fact, the capitalist theorists I've read would say that you need a government for just the reason you cite - businesses (interest groups, what have you) will attempt to use government to keep the playing field in their favor.

Government's role in 'capitalist theory' is to ensure that economic decisions do not become political ones.