In Defense of Capitalism

[88GT]

Capitalism isn't an economic system, it's a natural phenomenon spontaneously occurring between free players in free markets with scarce (limited) resources and disproportionate distribution of said resources.

"You have what I need and I have what you need. Wanna trade?"

It really is that simple.

 

[Lex Concord]

Oh, no, capitalism is where you work hard and grow your company to a decent size, then pay lobbyists millions to grease the skids for legislation that will protect your market share enabling you to make billions, shutting out little innovators like you once were.

At least, sadly, that's what most people think.

Human nature as it is, we will probably never see true capitalism as folks can't seem to stand life without a king, and no king can stay king for long without distorting the market to some degree.

God warned the Israelites of their folly in demanding a king, but they didn't listen either.

 

[jsgolfman]

Wonderful discussion by all. I can hear Mr. Smith cheering as we speak. As 88GT said above, capitalism at its core is nothing more than an exchange relationship. A positive sum game. However, this only works in the absence of force, coercion or interference. Remove the state and allow the market to regulate the economy.

 

[smoking357]

If your theory is to hold true, then obviously you should be able to point to monopolistic power on the part of some porn company. That sector is almost completely capitalistic, yet no "dominant" player has ever managed to maintain its position for very long.

Open a pea shake or a card room and see how long it is before other "capitalists" pay you a visit.

Capitalism is about winning, not about respecting fair conduct rules.

Remove the state and allow the market to regulate the economy.

Exactly. Me and my boys will be by to "regulate" your business to the ground. Welcome to Capitalism 101.

Oh, no, capitalism is where you work hard and grow your company to a decent size, then pay lobbyists millions to grease the skids for legislation that will protect your market share enabling you to make billions, shutting out little innovators like you once were.

That's Capitalism, winning by any means necessary. Leveraging capital into more capital. If that's economic, political, sexual, fear, it doesn't matter. The one who uses his resources best, wins.

 

[boljr01]

Open a pea shake or a card room and see how long it is before other "capitalists" pay you a visit.

Capitalism is about winning, not about respecting fair conduct rules.



Exactly. Me and my boys will be by to "regulate" your business to the ground. Welcome to Capitalism 101.



That's Capitalism, winning by any means necessary. Leveraging capital into more capital. If that's economic, political, sexual, fear, it doesn't matter. The one who uses his resources best, wins.

Don't overlook the one fundamental pre-requisite for capitalism to thrive -> freedom. Freedom of individual rights. "...That to secure these rights, Governments are instituted among Men...". Presuming the government served its intended purpose, and only its intended purpose, the individual would be protected from you and your boys and capitalism would thrive. Its not capitalism that's broken, its our government.

 

[jsgolfman]

Open a pea shake or a card room and see how long it is before other "capitalists" pay you a visit.

Capitalism is about winning, not about respecting fair conduct rules.



Exactly. Me and my boys will be by to "regulate" your business to the ground. Welcome to Capitalism 101.



That's Capitalism, winning by any means necessary. Leveraging capital into more capital. If that's economic, political, sexual, fear, it doesn't matter. The one who uses his resources best, wins.

So, you're equating a free market to lawlessness? When you remove the state from their interference with the market, laws don't simply disappear.

 

[smoking357]

Don't overlook the one fundamental pre-requisite for capitalism to thrive -> freedom. Freedom of individual rights. "...That to secure these rights, Governments are instituted among Men...". Presuming the government served its intended purpose, and only its intended purpose, the individual would be protected from you and your boys and capitalism would thrive. Its not capitalism that's broken, its our government.

That isn't what they're saying. They're saying that Capitalism is or can be the state, that it's sufficient means or exchange and regulation, all by itself.

 

[smoking357]

So, you're equating a free market to lawlessness?

So you've returned to requiring a state existing alongside capitalism?

 

[Fletch]

That isn't what they're saying. They're saying that Capitalism is or can be the state, that it's sufficient means or exchange and regulation, all by itself.

Capitalism is voluntary, positive-sum exchange. The violence you seek to introduce is just as criminal under a capitalist society as it is under the present system. The instant you initiate violence or fraud, you are outside the realm of capitalism and back in the realm of the state. Paraphrasing Justice Holmes, law is a statement of circumstances in which violence will be condoned.

So you've returned to requiring a state existing alongside capitalism?

A State, by which is meant a territorial monopoly on the initiation of force, is not wholly necessary. The absence of a State does not necessarily imply the absence of government or of protective forces. Libertarians, whether of the minarchist or anarcho-capitalist bent, recognize that there must be something in place to protect and preserve the property rights of the public at large. We disagree among ourselves as to what the nature of that "something" is, but we agree that it must exist.

 

[jsgolfman]

Having a state is not a pre-requisite for having laws.

 

[smoking357]

Capitalism is voluntary, positive-sum exchange.

That's a prayer. Capitalism has been, at many times, a negative-sum exchange wherein a company buys all assets within a person's area, controls all economic activity in an area, and forces a person to work within an inescapable system, say a mine, for services properly valued at X while being paid <X wages and being forced to pay exorbitant prices for necessary goods, creating a condition of economic slavery.

The violence you seek to introduce is just as criminal under a capitalist society as it is under the present system.

It's perfectly legal in capitalism for me to tell anyone who deals with your fledgling business that if they help you, I will directly stop doing business with them, and I will demand that all my suppliers and vendors stop doing business with anyone who helps you. Any bank that loans to you will face social ostracism of its officers, and all family members of that bank will be unemployable in my empire. If the bank officer's son-in-law works for me, he's out of a job if you loan to someone whom I have not approved.

Try me. I'll bury you, and I'll do it all nonviolently.

The instant you initiate violence or fraud, you are outside the realm of capitalism and back in the realm of the state. Paraphrasing Justice Holmes, law is a statement of circumstances in which violence will be condoned.

Irrelevant pet peeve: Please never quote Holmes. Please also never seek argument on the nature of law from judges. Judges do Philosophers' bidding.

A State, by which is meant a territorial monopoly on the initiation of force, is not wholly necessary.

Agreed.

The absence of a State does not necessarily imply the absence of government or of protective forces.

"Government," of some stripe, is inescapable. Hell, your Mason lodge has a fully functional government. INGO is a government. And, of course, people can contract for their own protection.

Libertarians, whether of the minarchist or anarcho-capitalist bent, recognize that there must be something in place to protect and preserve the property rights of the public at large. We disagree among ourselves as to what the nature of that "something" is, but we agree that it must exist.

Metaphysically speaking, you haven't said much, there, and I suspect you know that. You're going to have to add considerable detail to that abstraction.

Having a state is not a pre-requisite for having laws.

Did someone say it was? I'll do you one better: just because a state enacts laws doesn't mean that the laws are legal.

 

[Fletch]

That's a prayer. Capitalism has been, at many times, a negative-sum exchange wherein a company buys all assets within a person's area, controls all economic activity in an area, and forces a person to work within an inescapable system, say a mine, for services properly valued at X while being paid <X wages and being forced to pay exorbitant prices for necessary goods, creating a condition of economic slavery.

The coal mining company towns and robber barons were created and maintained with the help of local and regional government corruption. You may claim to be able to pull this off without the threat of violence or the involvement of a corrupt government entity, but then again you can claim to be able to flap your arms and fly to the moon. Microsoft tried it, perhaps on the grandest scale ever attempted sans government assistance, and the strategy ultimately failed -- not because of the Clinton Justice Department's bull**** intervention, but because they could not sustain the lockouts. There are too many opportunities in a free market for one firm to be able to capture them all without the help of government, in the form of anything from the local sheriff hassling those who go against the company to the crafting of wink-and-nudge regulations that stifle competition but somehow allow the company's exact business model.

 

[Fletch]

For example:

Liberty and Labor - Llewellyn H. Rockwell Jr. - Mises Daily

Until the New Deal, there was generally no such thing as national labor law. Aside from a handful of special cases, the labor contract was just a contract. And, as it happens, Price Fishback of the University of Arizona economics department (writing in the Journal of Economic Literature) has examined every scrap of evidence about the way labor markets worked between 1890 and 1930 and exploded every piece of conventional wisdom about labor in the bad old days.

People were not stuck in indentured servitude. In fact, workers were highly mobile. Turnover rates were higher in 1890 than they are today. People outside of the Northeast didn't lead isolated lives of low pay and grime. Wages over time were converging among all regions for comparable lines of work. Blacks weren't exploited; they were paid comparably to whites of equal training and skill.

The reason should be obvious: competition for workers. Managers and owners would love nothing better, then or now, to pay nothing for unlimited amounts of work. But they must compete with other possible lines of employment, and thus the workers are free to market their services to the highest possible bidder. In an active market economy with freedom of contract, the workers' wages eventually reflect precisely their own contribution to economic productivity.

But what about safety? Workers were paid more to undertake higher levels of risk. What about unemployment due to shutdowns? If there were a higher risk of that, wages would reflect it, too. And under the common law, and even outside the court system, workers were compensated for accidents resulting from employer negligence.

But what about cases in which competition doesn't seem to exist, when there is only one firm and that firm provides not only the job, but also runs the schools and stores and rents the housing? This is the "company town" of American folklore ("I owe my soul to the company store").

The most interesting results of Mr. Fishback's studies concern the economics of the company town. It turns out, the private paradise of the company town provided stores, houses and schools as part of a highly desirable compensation package. They did this to attract workers. Rents were low, store prices were competitive, and the schools were good. Why? If the company ever slacked off or attempted to exploit a "monopoly," workers would leave the company town to go to work elsewhere.

If workers were that mobile in a time where the main mode of transportation was a horse or just walking, the workers of today are far better able to resist the efforts of a nonviolent attempt at monopoly.

 

[smoking357]

The coal mining company towns and robber barons were created and maintained with the help of local and regional government corruption.

Not all, and not in all countries.

 

[smoking357]

For example:

Liberty and Labor - Llewellyn H. Rockwell Jr. - Mises Daily



If workers were that mobile in a time where the main mode of transportation was a horse or just walking, the workers of today are far better able to resist the efforts of a nonviolent attempt at monopoly.

"Monopoly" is this bogeyman people hold out as an impossibility, so we need not worry. Folly. Pentopolies are just as noxious. If almost all economic activity is concentrated in one or twenty companies, the outcome is the same vis-a-vis the ordinary person. So also it goes if an industry is dominated by a few players.

 

[Fletch]

Not all, and not in all countries.

If we're talking about other countries, we run into the problem of personal property rights, which generally speaking have not been recognized elsewhere to the extent that they have in the USA. If you have an example that shows a society with a foundational respect for personal property rights for all individuals, and a monopolistic entity that achieved its ends without violence, threats, coercion, intimidation, legal manipulation, or any of these by government proxy, and which managed to exist in perpetuity by nonaggressive methods, by all means, whip it out.

 

[smoking357]

If we're talking about other countries, we run into the problem of personal property rights, which generally speaking have not been recognized elsewhere to the extent that they have in the USA.

Personal property rights are not implicated in my post.

 

[Fletch]

"Monopoly" is this bogeyman people hold out as an impossibility, so we need not worry. Folly. Pentopolies are just as noxious. If almost all economic activity is concentrated in one or twenty companies, the outcome is the same vis-a-vis the ordinary person. So also it goes if an industry is dominated by a few players.

Again, examples would be helpful. I've mentioned the porn and software industries as being largely free-market sectors which demonstrate that monopoly or its functional equivalent does not arise naturally out of the market, and that the market moves to prevent monopoly. Show me a similarly free-market sector where your stranglehold scenario exists and persists.

 

[Fletch]

Personal property rights are not implicated in my post.

Personal property rights are endemic to capitalism. If they are not included, we're not talking about capitalism.

 

[smoking357]

Again, examples would be helpful. I've mentioned the porn and software industries as being largely free-market sectors which demonstrate that monopoly or its functional equivalent does not arise naturally out of the market, and that the market moves to prevent monopoly. Show me a similarly free-market sector where your stranglehold scenario exists and persists.

You picked two easy examples. Everyone's girlfriend or mother is willing to strip for the camera, and every kid with a computer wants to write shareware for Download.com to pad his resume. Monopolistic impulse aside, it's utterly impossible to stop such an easy and cheap supply of output. There will never be a monopoly on doorstops.

Try oil refining.

Or perhaps you'll hide behind this definition of "free market" that exists nowhere in the real world. Further, I notice you have this nasty habit of equating "capitalism" and "free market" and deceptively oscillating between the two concepts.

When cornered on "capitalism," you run to "free market," a concept which, as of yet, you haven't defined.