Republicans & Conservatives: Archives

While I think that you have many good points in your article, I would like to point out one perspective that you passed over.

While no one should tell you how to spend your money, what about your source of income? What if you are a factory worker who’s factory was sent overseas. You now have less income and no health benefits. By shopping at WalMart you’ve assisted in getting rid of your own job. And since WalMart has such low prices, you are now forced to shop there in order to afford necessities, guaranteeing that your factory job would not come back.

What do you do then?

Doesn’t Wal-Mart provide health benefits to its employees? What about profit sharing? I thought Roy was big on that stuff?

The short answer is find another source of income. Jobs are not meant to be eternal or sacrosanct. A job is by its nature a dependent and temporary position.

Let me ask you another hypothetical question. If you work at Target, is shopping at any other store theoretically imperiling your job?

One of the effects of Wal-Mart taking over American retail is that they are not only causing manufacturing jobs to be sent overseas, but they are also commoditizing formerly well-respected professions and killing off the individual store owners. My grandfather used to own a department store in a small town until Wal-Mart arrived. I had a friend in collge whose pharmacist father was forced to close his family-run store and take a job at a major chain. Even is areas of retail where full-time union positions (butchers, etc.) used to be the norm have been replaced by armies of part-time, no benefit positions.

While I understand the whole ideas about competition and progress and low prices, is it really all worth it to gut the soul of middle America? Wal-Mart has replaced numerous professions in which people could support a family well with minimum-wage jobs. Sure, the shareholders benefit and the consumers who just can’t pay more than $2.97 for a year supply of pickles.

But what we really end up with is nothing more than a 2-tiered economy with a few wealthy at the top getting fatter everyday on their dividend checks, and lots just trying to get by at the bottom because the’ve been forced out of the business owner class and into the hourly wage class.

Walmart is the largest corporation in the world now. Not the largest retail company, but the largest company period. They have routinely bullied companies all over the world who supply them, forcing them to take losses they cannot pass up. I think criticism of Walmart is in order before things get worse.

Wal-Mart has replaced numerous professions in which people could support a family well with minimum-wage jobs. Sure, the shareholders benefit and the consumers who just can’t pay more than $2.97 for a year supply of pickles.

What is the alternative? Make it illegal to replace certain jobs? Which jobs? Make it illegal to improve efficiency?

If there’s a way someone can do my job better, faster, and cheaper is it wise for me to be able to keep that improvement from being implemented?

What is the alternative? Let’s say that I am that small department store and Wal-mart comes in and soon no one wants to shop at my store. Wal-mart didn’t put me out of business, my customers did.

I am so sick of having to shop at Wal-Mart. We the people want other stores to shop at but we live in a rural town and Wal-Mart is the only store there is beside Dollar General.
I look at their products and saw they buy alot of their products from other Countries.
I am so sick of this.I want to buy America made products not the other Countries products.
So sick and tired of Wal-mart. I wish a good wind would come and blow all Wal-Marts away.
Cheap pay.
We can’t get another store in our town because Wal-Mart don’t want no other big store.
What bullcrap this is.
Wal-Mart go away far away.
Let other business come to our town.
So sick of Wal-Mart and so is everyone else.

Adreamer: If “everybody” were sick of Wal-Mart, I will venture a guess that they would not still be in existence. The reality is that if they really are bullying people around (engaging in predatory, anticompetitive behavior), they should be brought up on violations of antitrust policy. Otherwise, I don’t quite understanding the bemoaning of greater efficiency. As our economy continues to evolve, we will be forced to acquire new skills which will be relevent to that economy.

http://msnbc.msn.com/id/4363393/

An interesting article about Wal-Mart and its political affiliations..I’ll let it speak for itself.

This is why I love Walmart: (From the lovecraft quote above.)

Despite its generous political contributions, however, Wal-Mart’s lobbying style still reflects its corporate obsession with keeping costs as low as possible. Its Washington office, opened four years ago, only employs five full-time lobbyists, a fraction of comparably sized companies such as General Electric. And the company is facing a series of disputes with state-level retail lobbying associations over its demand for cut-rate membership fees. “What they normally do is send you what they think they can get away with,” says Chris Tackett, president of the Wisconsin Merchants Federation.

Now if only we can get this ‘keeping costs as low as possible’ philosophy into the federal government somehow.

Yeah, you might like that, but ‘keeping costs as low as possible’ at what cost?

You want a reality check? Not every business success is good for consumers. If a business forces other business out, then raises the prices to what the market can bear, precisely what will force them to lower prices again? The magic, invisible hand of the economy? Get real. They’ll keep the prices where they are.

If a business suceeds in forcing other local employers out of business, what will enable those who have had to exchange good, high-paying jobs for Wal-Mart wage-slavery to regain the kind of jobs that helped them so efficiently raise and feed their families, the magic, invisible hand of the economy? Get real- when Wal-Mart’s the only game in town, there are no other choices to force Wal-Mart’s hand. There is no competition ensuring fair price, and fair employment.

What you don’t face up to is that any business with sufficient enough control of the market can grow on that market without truly contributing back to it, without providing the necessary supports and economic benefits of it. You may see low prices and efficiency within the stores, but that doesn’t necessarily stand to be the case outside of them.

Our system, nowadays, lays off people more often for their experience than it keeps them on for it. Why? Because seniority demands higher pay, and all they can see is the greater expense, and not the more efficient working skills. The real world performance of employees is no longer their concern. Their concern is whether their stock options will gain in value as they hit arbitrary consensus numbers on their profit to earnings ratios.

It creates a system where the market forces are no longer allowed their beneficial effect on commerce. Instead it become a kind of internalized colonialism, with markets being drained of their value to concentrate wealth at the top at all costs.

There is a name for a fast growing entity that expands with little care for the consequences to the system. It’s called a cancer. Growth without concern for humanity, for the benefit of the commonwealth, is pathological at it’s heart.

I am a believer in Capitalism, in Market economies. But I am also a believer in the frailties of human nature, and human judgment. I do not believe that we can afford to look the other way as Wal-Mart wrecks our local economies for it’s own benefit. I think Wal-Mart should be held to account for it’s practices, and the appropriate remedies laid upon it.

Capitalism is a wonderful thing but left unchecked it becomes ugly as history has shown time and time again. Companies become successful by competing and providing the best product or service to a public, a public that has the opportunity to choose. There does come a point when a company becomes so successful and so large that to sustain their growth they must resort to different methods of competition. These methods often entail throwing their weight around in ways that oust competition, not by providing a better product, but by artificially undercutting the competition until the competition goes under. Now the public begins to lose their opportunity to choose and this is when things get ugly and we depend on the government to step in and represent us. Capitalism is a wonderful thing when based on competition. Once someone wins that competition then the competition is over and capitalism ceases to exist. It is a strange way to look at it but I believe that informed government regulation is a critical force in maintaining capitalism and Walmart is hitting that critical stage where it is starting to become a problem. Walmart is only a small part of the problem however. Due to expanding corporate power and consolidations that are merely rubber stamped by the Bush administration we are losing our ability to choose and without that ability, capitalism is dead.

Eric,

As I said, I understand the principles of competition, efficiency, etc. but American society cannot be reduced to some Economic theory. Real society is more nuanced and there are countless ramifications which pure economic theory don’t take into consideration. There needs to be some balance between the corporate profit drive that does increase productivity and competion with the promotion of creating a pleasant society in which people can live.

While pure economics suggests labor shifts to where it is most in demand, the realities of human life mean that this does not occur in true equilibrium. Corporate powers like Wal-Mart have an unfair advantage in that they are not emotionally attached to locations, employees, suppliers, etc. However, a small town pharmacist who has just been forced out of business isn’t necessarily going to want to sell his home, move his family away from friends and family, possibly cause a job change for a spouse, etc. Wal-Mart knows this and knows they can then hire the guy for $10/hr. to fill prescriptions.

In regards to the consumer, there are loses as well. They lose the personalized attention of local shopkeepers, product differentiation among competing local retailers, product selection suited to local tastes, etc. They are treated as revenue sources and not clients. But in many cases, the consumers no longer have a choice. Wal-Mart’s original business model was to move into small towns and choke off all other retail.

I think that a good deal of what people dislike about WalMart is cultural. Those who dislike WalMart might better focus their arguments on the dumbing-down of the American consumer and the increasing homogenization and impersonalization of our culture.

- People would rather spend $30/year for the rest of their lives on cheap-ass ugly plastic shelves for their home entertainment system instead of spending $200 once for a good shelf that will last 20 years. (i.e., the real problem is that Americans have lost a sense of the value of high-quality goods, and they cannot plan their lives for the long-term.)

- People would rather shop in a store where the totally anonymous, underpaid, depressed, defeated counterperson has strict instructions about the exact words they are permitted to say to customers, essentially acting like a machine… rather than shop at a store where the counterperson is someone who might display the idiosyncrasies of an autonomous human being and who might, with their words or actions enter the customer’s personal space. (i.e., the real problem is that Americans have become increasingly isolated and de-socialized, and no longer appreciate the value of interacting with other human beings - we wish our shopping experiences to be robotic, not social.)

- People want to shop in a single place where they don’t have to walk around all day and burn calories going from the toy store to the drug store to the supermarket. (i.e., the real problem is that Americans are out of shape and are really lazy)

To me, the problem is not that WalMart gives us what we want. The problem is that what we want is so dull and depressing.

My dislike of WalMart is not a battle against capitalism; it is a battle against the breakdown of American cultural and social values. If Americans actually wanted to pay for high-quality products and services, if Americans actually wanted to interact with strangers, if Americans actually wanted to get up off their fat asses, then maybe WalMart actually wouldn’t profit and the old fashioned mom-and-pop bakeries and hardware stores and tailors would still survive.

I’ve always found it weird that conservatives claim to fight for “traditional American values”, when in fact it is the liberal mind that is fighting against these trends in America, trends that dissolve the traditional American consumer experience from a neighborhood, community-based, social experience to the big-box assembly line shopping, SUV’s, sprawl… a culture that is increasingly robotic, impersonal, and soulless. It is, to me, quite sad.

-Cf

I guess in some ways it’s the chicken and the egg situation — is Wal-Mart success a reflection of what we Americans want, or is middle America resigned to shopping at Wal-Mart because they have no choice?

I, too find the conservative viewpoint to be inconsistent with their “traditional family values” platform. The small businesses give a sense of pride in ownership, a share of profits, and a factoring of human costs in decisions during tough times. These values fuel a vibrant small town. On the other hand, Wal-Mart removes all these and makes its decisions purely based on P&L, return on shareholder equity, etc. community be damned.

Capitalism is a wonderful thing but left unchecked it becomes ugly as history has shown time and time again.

Could you please back that up with concrete examples?

History, in fact, has shown us exactly the opposite. Today’s modern world and everything in it —- technology, medicine, travel —- is available and affordable to us precisely because of capitalism. No other system in the history of mankind has done more to lift large masses of humanity out of misery and poverty. Conversely, you will find a direct co-relation between human misery and the lack of capitalism.

If only all of you anti-capitalists could actually live in the sort of world you’re asking for! Don’t like Walmart —- stop buying from it! Don’t like greedy predatory capitalism —- try to live without its fruits. Be consistent in your position.

> > Capitalism is a wonderful thing but left
> > unchecked it becomes ugly as history has shown
> > time and time again.

> Could you please back that up with concrete
> examples?

Um, slavery?

-Cf

I think Wal-Mart should be held to account for it’s practices, and the appropriate remedies laid upon it.

What would those appropriate remedies be? (Details please.)

If Americans actually wanted to pay for high-quality products and services, if Americans actually wanted to interact with strangers, if Americans actually wanted to get up off their fat asses, then maybe WalMart actually wouldn’t profit and the old fashioned mom-and-pop bakeries and hardware stores and tailors would still survive.

I agree. But go a step further… Think like an entrepeneur. Walmart is not the only place to shop. There is a market for everything. Just because Walmart is succeeding so well and filling a huge niche doesn’t mean there isn’t room for small businesses to fill other niches. Personal service does matter in some situations to some shoppers. Sam Walton looked at what was being done and realized there was a different way do it. Opportunity.

I believe the realm of human action is one of possibilities. I have never been one to see the threat in another’s success. For every action there is an equal an opposite reaction. Perhaps there are enough people who would prefer an alternative to Walmart. That’s called opportunity! It’s called a market. Capitalists are the ones who are always looking for these opportunities. They are always asking the question, “what do these people want?”

I think in some respects Trader Joes is a kind of anti-Walmart. It markets to a different kind of consumer and obviously utilizes some of the same efficiency models that Walmart does. Of course they just do food. But their stores are small and their products are high quality and low price.

Who are they going to put out of business? And at what point will someone jump up and say they must be stopped from offering lower prices. Who decides where and when to lock down all wages and jobs into a stasis? What so many of you are advocating is an economy of stagnation. Where no one fears competition, and everyone has safe secure jobs which they never have to leave. And where existing companies are protected from having to change or stay efficient in the face of customer needs.

Capitalism is dynamic. Yes, jobs are lost. Businesses fail. But eventually, Walmart itself will most likely become like the mom-and-pop’s, less pro-active and more stagnant in it’s ability to compete. They will decline and someone else will surpass them with even better efficiency or just a different varation on serving their customers.

…when in fact it is the liberal mind that is fighting against these trends in America, trends that dissolve the traditional American consumer experience from a neighborhood, community-based, social experience to the big-box assembly line shopping, SUV’s, sprawl… a culture that is increasingly robotic, impersonal, and soulless. It is, to me, quite sad.

I don’t buy gillete razors for the community-based social experience. I buy them to shave. I want to get my tiolet paper, grape juice, diapers, condoms and tampons as quickly as possible so that I can get back to my family and friends. Forgive me for being rude but I’d like to decide where to recieve my community-based social experiences.

I have no problem with you wanting to shmooze with your local shopkeeper all afternoon, but maybe there is a market for that if you’re willing to pay for it. Do the research and start your own conpany. Maybe it’s feasable.

There needs to be some balance between the corporate profit drive that does increase productivity and competion with the promotion of creating a pleasant society in which people can live.

Profits are that balance.

It creates a system where the market forces are no longer allowed their beneficial effect on commerce. Instead it become a kind of internalized colonialism, with markets being drained of their value to concentrate wealth at the top at all costs.

If that is the case, and obviously you believe it is how much longer will it take till the total collapse of capitalism?

In fact Walmart is succeeding precisely because of market forces.

Capitalism is a wonderful thing when based on competition. Once someone wins that competition then the competition is over and capitalism ceases to exist.

How so? Who decided that the competition would be over? Who will keep new companies from emulating the Walmart model and competing for Walmart customers? Surely Walmart won’t own everything and have ALL the money in the world? Surely they won’t take over the government and enforce martial law? Or will they? Muhahahahahah ah ah ha ha ha…

Um, ‘slavery’ predates capitalism my friend. It’s a prehistoric practice like the definition of marriage being between a man and a woman.

> ‘slavery’ predates capitalism

First, let’s get our terms straight: I am clearly talking about the kind of slavery where people are bought and sold for capital, not the kind of slavery where populations of people are forced into labor by the armed forces of warlords or a powerful overclass. Think Memphis Tennessee, not Memphis Egypt.

Now, if you define “pure capitalism” as a system where the free flow of capital is not checked by any other guiding system — moral, ethical, religious, social, etc — then the closest humans have ever come to this is in those places and times where mankind bought and sold other people for money. Prehistoric slavery *is* a kind of prehistoric laissez-faire capitalism. Sure, slavery may have co-existed with other socioeconomic structures that don’t jibe with the modern understanding of capitalism, but it’s hard to argue that buying and selling people isn’t a form of capitalism.

I’m not going to argue against capitalism as one of the great guiding systems of a modern free society, but I am going to argue that it is certainly not a system that should be adopted by itself without other guiding principles.

You seem to want to put the world into two neat little boxes: those who love capitalism and those who hate it. It may surprise you to learn that many people who think that corporations should be held accountable to certain ethical standards and must show (and be required to pay for!) some social responsibility might not actually be rabid haters of capitalism. And I’m sure you don’t want me to think that just because you are a die-hard capitalist doesn’t mean that you think that slavery, mercenary armies, poll taxes, debtors’ prisons, and child prostitution should be morally permissible as long as the market demands it.

-Cf

PS: I found it fascinating the other day to read that Western Europe, a place that American tax hawks think of as rabidly anti-capitalist, actually contains more billionaires than America does (although Americans mostly top the list - all Waltons!)

http://www.forbes.com/maserati/billionaires2004/bill04land.html

Er, I meant “And I’m sure you don’t want me to think that just because you are a die-hard capitalist MEANS that you think that slavery, mercenary armies, poll taxes, debtors’ prisons, and child prostitution should be morally permissible as long as the market demands it.”

I am clearly talking about the kind of slavery where people are bought and sold for capital, not the kind of slavery where populations of people are forced into labor by the armed forces of warlords or a powerful overclass. Think Memphis Tennessee, not Memphis Egypt.

I don’t see the difference. Slaves were bought and sold for capital throughout history. In Mephis Tennessee as well as Memphis Egypt. Look into it.

Slavery is where one person owns another persons labor. Throughout history this has meant masters owned slaves with total power over them. The Roman patriarch of a family for instance could kill slaves as well as family members usually without legal repercussion. There may have been a stigma attached but it was still legally permissible. They clearly bought and sold their slaves for money. As did the Hebrews, Egyptians, etc etc.

In various times there may have been social laws regarding the treatment of slaves. But slaves were clearly bought and sold on a regular basis all throughout every culture of history.

Now, if you define “pure capitalism” as a system where the free flow of capital is not checked by any other guiding system — moral, ethical, religious, social, etc — then the closest humans have ever come to this is in those places and times where mankind bought and sold other people for money. Prehistoric slavery *is* a kind of prehistoric laissez-faire capitalism. Sure, slavery may have co-existed with other socioeconomic structures that don’t jibe with the modern understanding of capitalism, but it’s hard to argue that buying and selling people isn’t a form of capitalism.

Capitalism is not the free flow of capital unchecked by any moral, ethical, religious, social guidelines. It is the only economic system ever which has at its operating core the necessity of individual freedom in order to function optimally. It is in fact the only truly moral economic system to have ever existed.

Where capitalism flourishes the people prosper. Where capitalism doesn’t flourish only the ruling elite prosper.

If capitalism = slavery then the people of the Soviet Union were the freest people to ever live. It is your argument which I find hard to argue.

I am wondering why you made a distinction in terms of individuals buying and selling slaves for money as opposed to states capturing human beings to use as slaves. Perhaps because you do not regard state slavery as a bad thing? As if an individual enslaving another for cash is less moral than when the enslavement is organized at a national/state level?

…it is certainly not a system that should be adopted by itself without other guiding principles.

As long as the ‘other guiding principles’ are not in fact diametrically opposing principles held by those who wish that capitalism did not exist, and seeth at the very idea of it existing and in fact wish that it were abolished entirely.

In principle I sort of agree with part of your statement. But, I would content that if you read some of the writings of ‘Capitalists’ you might find that those guiding principles are in fact part of capitalism and are synonymous with the heritage of western civilization.

> I am wondering why you made a distinction in
> terms of individuals buying and selling slaves
> for money as opposed to states capturing human
> beings to use as slaves. Perhaps because you do
> not regard state slavery as a bad thing? As if
> an individual enslaving another for cash is
> less moral than when the enslavement is
> organized at a national/state level?

The right frequently grounds its arguments on the assumption that the the opposition left is some imaginarly force of EVIL. Here Eric argues that those who of us who think that America’s capitalist system should be more moral are “anti-capitalist”, and then he accuses me of being in favor of state slavery. I never once wrote that “capitalism = slavery”, but he bases his entire post on beating up on that straw man, that imaginary demon he’s conjured up in my name.

Eric, you should learn to begin your arguments with the assumption that your opposition is not a communist mass murderer. Maybe then you wouldn’t waste your time trying to pedantically point out the obvious fact that slaves were bought and sold even in ancient Egypt.

No, I made the distinction between forced labor and mercantile slavery to point out that there are aspects of the free market that, when unchecked by moral values, aren’t a good thing. Slavery is merely one example. I mentioned some, and I’ll do it again: private armies, poll taxes, debtors’ prison, child labor, kickbacks, monopolies, pyramid schemes, indentured servitude, loan sharking, insider trading… American capitalism is jam-packed full of potential economic crimes that are successfully kept in check by what some would argue are anti-capitalist laws.

(By the way, I am assuming that YOU would NOT consider these laws anti-capitalist, which is why I brought up slavery as an example of how capitalism can flourish even when kept in check.)

Under pure capitalism, one is permitted to discriminate against ethnic minorities, but under American capitalism it is illegal. Under pure capitalism it is okay to pay a labor force a wage which is barely enough to keep them alive, but in America we have labor and wage laws to keep those at the bottom of the economic ladder afloat. There is nothing inherent about capitalism that says that we have to unlock the doors in the garment factories, or that 12-year olds should not work in factories. Under pure capitalism, 50% interest rates are totally permissible, but for thousands of years in the the Western tradition interest rates have been regulated (a tradition which, by the way, has been unraveling since the 1980s).

My point was that we live in a country where capitalism blends harmoniously with other socioeconomic models and other moral and ethical systems. My point was that we do not, nor would we want to, live in a purely capitalist system. I’m sure you will agree that it is not anti-capitalist to think that capitalism should be modified by our moral standards.

> In principle I sort of agree with part of
> your statement. But, I would content that if
> you read some of the writings of ‘Capitalists’
> you might find that those guiding principles
> are in fact part of capitalism and are
> synonymous with the heritage of western
> civilization.

You should begin with the assumption that I am familiar with these ideas and that I am not among “those who wish that capitalism did not exist, and seeth at the very idea of it existing”.

Maybe this is simply a semantic issue: you think that “capitalism = free markets + other moral principles”, while I think that “America = capitalism + other moral principles”. Where you say “capitalism”, you mean to say that moral standards are implicitly built-in. Which makes your assumption that there are so many anti-capitalists in America so much more infuriating to me: does the right really think that the left is packed with outright communists (if so, they are insane), or is this just rhetorical flair?

You should try thinking about the WalMart issue in this way: try beginning your consideration of the issue by assuming that those who think that WalMart is a bad thing for America aren’t also people who simply think that capitalism is bad. Just start there.

And let us begin debates about the role of capitalism in America with the assumption that this is not a debate between “pro-capitalists” and “anti-capitalists”. Let’s assume the argument is between the “let’s regulate capitalism X amount” faction and “let’s regulate capitalism Y amount” faction and then go from there, okay?

-Cf

I never once wrote that “capitalism = slavery”, but he bases his entire post on beating up on that straw man, that imaginary demon he’s conjured up in my name.

You must have threw me off when you said, “it’s hard to argue that buying and selling people isn’t a form of capitalism.” Which to me sounds very much like: slavery is a form of capitalism. Your comment put forward the argument that capitalism is at best an amoral system and in practice has in fact been an immoral system.

First, let’s get our terms straight: I am clearly talking about the kind of slavery where people are bought and sold for capital, not the kind of slavery where populations of people are forced into labor by the armed forces of warlords or a powerful overclass. Think Memphis Tennessee, not Memphis Egypt…

I apologize if I misunderstood your point in this paragraph. But why point out the distinction if it is irrelevent?

…Maybe then you wouldn’t waste your time trying to pedantically point out the obvious fact that slaves were bought and sold even in ancient Egypt.

You seemed to be tying capitalism to slavery, which is a standard argument made by Marx and Lenin and every communist influenced thinker of the last century. I think most people reading it would have come away with that idea.

Under slavery, the slaves themselves are dealt with as commodities—they are bought and sold, just like other things that are commodities. Under the modern system of slavery, wage-slavery (capitalism), the workers (the proletarians) are not commodities themselves, but their labor power is dealt with as a commodity. Your labor power means your ability to work, and it is this ability to work that you have to offer to sell when you go looking for a job (and that’s why a job can be called a “slave”). And, if you can find a job, then in exchange for letting some capitalist use your labor power—in exchange for slaving for that capitalist—you get paid in wages, which you use to buy other commodities. -Capitalism as slavery

I do not believe that most democrats who advocate leftist policies actually think of themselves as communists. But, if their policies advocate aspects of communist doctrine and are largly based on that philosophy I feel an obligation to point that out. Their unawareness of that fact is perhaps more reason to do so. Would you disagree with the fact that the progressive-left’s thinking is heavily influenced by the ideas and philosophy of Marx?

My point was that we live in a country where capitalism blends harmoniously with other socioeconomic models and other moral and ethical systems. My point was that we do not, nor would we want to, live in a purely capitalist system. I’m sure you will agree that it is not anti-capitalist to think that capitalism should be modified by our moral standards.

…Maybe this is simply a semantic issue: you think that “capitalism = free markets + other moral principles”, while I think that “America = capitalism + other moral principles”. Where you say “capitalism”, you mean to say that moral standards are implicitly built-in.

Here we can cut straight to the heart of the issue. It is with your definition of ‘pure capitalism’ with which I disagree. My view could be characterized more along the lines of “America - Capitalism = Slavery” or “Capitalism + Opposing socioeconomic models = bad results and unintended consequences.”

It would be interesting to explore the possibility that it is the rise of capitalism which put and end to slavery as an istitution. Slavery was an integral part of society throughout history up until the time of capitalism’s rise.

The issue is whether or not the legal business model of Walmart should be regulated based on anecdotal claims of it’s ‘immorality’. A claim of immorality not backed up by the facts of reality.

And let us begin debates about the role of capitalism in America with the assumption that this is not a debate between “pro-capitalists” and “anti-capitalists”. Let’s assume the argument is between the “let’s regulate capitalism X amount” faction and “let’s regulate capitalism Y amount” faction and then go from there, okay?

But that’s the whole point —- any argument to regulate capitalism falls back ultimately on socialist/communist/protectionist principles. The only ones who want to “regulate” capitalism are those who do not have the merit to compete openly in a free market, and need other “protections”.

From Sunday’s Atlanta Jornal Constitution: A snapshot of Georgia’s program for uninsured children shows that it’s packed with kids of Wal-Mart employees

Eric and Vivek: Both of you continue to paint Capitalism as the “good twin” tocommunism’s “evil twin”, as if they were siblings, as if they were contemporary inventions. But I always think of capitalism as something that pre-dates communism by at least a century, if not by a millenium or two. This is an interesting area of comparison between the historical perspective of your side and mine, and how we define the word “capitalism”.

Eric wrote:
> My view could be characterized more along the
> lines of “America - Capitalism = Slavery”

So America was not a capitalist country until 1864? Capitalism is a recent invention? That’s an interesting concept, especially when looking at this basic timeline:

1602 - Creation of the Dutch East India Company
1776 - Publication of Adam Smith’s Wealth of Nations
1848 - Publication of Marx’s Communist Manifesto
1861 - Publication of Marx’s Das Kapital
1864 - End of slavery in the USA
1917 - Bolsheviks take power in Russia

Vivek wrote:
> But that’s the whole point —- any argument to
> regulate capitalism falls back ultimately on
> socialist/communist/protectionist principles.
> The only ones who want to “regulate” capitalism
> are those who do not have the merit to compete
> openly in a free market, and need other
> “protections”.

And Eric wrote:
> You seemed to be tying capitalism to slavery,
> which is a standard argument made by Marx and
> Lenin and every communist influenced thinker
> of the last century.

Let me address this depiction where leftist/liberal thinking questioning capitalism is automatically equated with “Communism” or “Marxism”. You seem to paint a world where “Capitalism” and “Communism/Socialism/Marxism” are the only two games in town, like they are diametric opposites, like God and Satan, like Superman and Lex Luthor.

I argue that Capitalism is, in fact, the *only* game in town, and that modern governments have no choice but to address capitalism head on: They can either:
… (a) suppress/control it entirely (as is done under Soviet style Communism, or under totalitarian/fascist regimes like Saddam’s)…
… (b) they can let it run free of all government restraint (as was done in the USA & Europe in the late 19th and early 20th century, and as it is being practiced today in Russia and other former Communist countries with no experience with incremental capitalist evolution).
… (c) they can regulate it minimally and carefully (as is done today in most of the west, including in the USA)…

I suspect that this dichotomy of “capitalism versus communism” is one born out of the idea that Adam Smith, one of the first describers and boosters of capitalism is the *inventor* of capitalism (which, to me, is akin to describing Copernicus as the inventor of the Solar System), and of the idea that Communism is a boogeyman that we should constantly be on alert against. This dichotomy is a Cold War relic, and today it is only a fraud, a phony straw man used to discredit those who dare to argue against the unrestrained power of the Corporation.

I argue that capitalism was never actually invented in a bolt from the blue, and that it is hardly the “good twin” or communism. Rather, capitalism is is the natural system we have evolved into over the past several millenia. Capitalism is, in a way, the very air we breathe. Adam Smith is a “proponent of capitalism” only insofar as he argued against mercantilism (a flavor of capitalism which favored the value of precious metals over abstractions, and which opposed free markets and favored established hegemonies, i.e, the power of the crown). Adam Smith is hardly the *inventor* of the idea of ownership of private property: he was merely one of the first to describe it in detail.

I may be wrong about this, but I’ve always thought of Marx not only as a communist thinker, but as a capitalist thinker, as someone who built on and extended Adam Smith’s ideas more than he refuted them.

I am not a well-read Marxist, but my understanding is that Marxism can be divided into two theorys:

The first theory, the “benign” theory, describes the capitalist system as one in which the laborer’s work has a value that is qualitatively the same as that of physical treasure, a force/resource that laborers can use in the same way that the wealthy use their physical treasure as a force. This is not a theory of advocacy, it’s a theory of description, and it seems to me that this theory is one that every economist in the world now accepts in much the same way that every astronomer in the world accepts the theories of Copernicus. To be a “Marxist”, in this sense, is to be a mainstream economic thinker. (This is his later “Das Kapital” publication.)

The second “Marxist” theory, the one that is the “Evil” theory, the straw man I am being forced to battle here, is one that claims that, inevitably, the labor force will use this power to overthrow the rich and create a new power structure. This is his earlier “Communist Manifesto” publication. This is the “Marxism” that is the foundation of 20th century Leninist/Maoist oppression.

In the latter model, the world is turned upside down. It is the insanity of the Soviet Union. Leninist/Soviet-style Communism is a complete refutation of capitalism, a revolution against it. It is a revolution that, thankfully, has failed because it is doesn’t work. Communism is a blip in the history of capitalism - it is not Capitalism’s evil twin, and it is not something that anyone in the mainstream United States’ political arena is arguing for. Capitalism is a system that predates Communism by a thousand years, and it is a system that I believe will survive another thousand years.

Capitalism describes the very air we breathe, the economic world in which European/American culture has existed for half a millenium, since the emergence of the merchant class and the end of feudalism.

To question Capitalism is not to advocate the Soviet model of Marxism as an overthrow of capitalism. Questioning capitalism is part of a centuries-old pattern of examining, questioning, and speculating upon the nature of our system of trade and private property, and in this context you could easily argue that Marx was one of the most insightful *Capitalist* thinkers of his time.

Modern economists have largely accepted and integrated Marx’s idea that laborers have the power to create economic value through the sweat of their brows. But the second part of “Marxism”, the proletarian revolution aspect, is totally discredited by the results of the Soviet Union and the People’s Republic of China and other “pure” communist experiments.

It’s interesting to look at these definitions of capitalism:

——————
http://en.wikipedia.org/wiki/Capitalism

- a combination of economic practices that became institutionalized in Europe between the 16th and 19th centuries, especially involving the centrality of wage labor and the formation and trade in ownership of corporations (see corporate personhood and companies) for buying and selling goods, especially capital goods (including land and labor power), in a relatively free (meaning, free from state control) market

- competing (and contentious) theories that developed in the 19th century, in the context of the industrial revolution, and 20th century, in the context of the Cold War, meant to justify the private ownership of capital, to explain the operation of such markets, and to guide the application or elimination of government regulation of property and markets
——————

I think I have been referring to the first definition, while Eric and Vivek are referring to the second definition. To me, the second definition is laughable and can be discarded out of hand, since it is a dated 19th-20th century Cold War model which posits “capitalism” as “that which is not communism”. The former, older definition is the one that matters now.

The first definition is now the only definition of “capitalism” worth discussing today in rational company, unless you are having a debate against a card-carrying Soviet Communist. It still shocks me that I find myself in an intelligent public forum in which my opponents maintain the assumption that there is still a movement in the United States that advocates Soviet-Style communism.

Which brings me back to my original driving force, the part of me which thought that it was important to point out something which economic thinkers have thought obvious for a century or more: that Capitalism requires controls or regulations to ensure that humans do not reach for economic objectives which, however profitable they may be, stand in direct opposition with moral forces which we hold dear. Yet Vivek still argues:

> The only ones who want to “regulate” capitalism are
> those who do not have the merit to compete openly
> in a free market, and need other “protections”.

I want to regulate capitalism because I think that without regulations the free market will lead to things I find reprehensible, and that, I hope, Vivek and Eric also find reprehensible.

Slavery was not ended in the United States because a free, open market for slaves ceased to exist in a pure competitive landscape. It ended through artificial, extra-market means which had little to do with free trade. Slavery ended because the moral forces in the USA who opposed slavery just happened to have more powerful military forces than the economic powers which still depended on slavery. The American Civil War is, to me, the pre-eminent example of how (for one of the very first times in history) capitalism learned to take a back seat to morality.

This is why I brought up slavery in the first place: A person who wishes to legally outlaw things like slavery, indentured servitude, usury, child labor, etc., is a person who believes that a totally unrestrained free market will inevitably permit these horrible things to exist, that market forces alone will not suffice to suppress these forces. I believe that, with no moral or legal constraints, a free market will create such things. History has proven me correct.

-Cf

Can a moderator please delete that first, crazy-formatted post and keep that second, nicely-formatted post? And delete this one, naturally. Thanks.

-Cf

Christopher:

I can see your point when you say that anti-capitalists should not be automatically labelled as “communists”. What I’m saying, though, is that it’s an oxymoron to use the term “regulated capitalism”.

People often use the following faulty logic (I’ve seen such comments right here on WB):
America has a “mixed” economy
America is successful
Hence, a mixed economy is successful.

Anyone who’s taken an elementary course in mathematical logic will know that such a line of reasoning is incorrect.

Intuitively, we should analyze which components of the American “mixed” economy make it strong and dynamic, and which elements hold it back. I contend that such an analysis will show that it’s precisely the laissez-faire elements that have kept the American model of capitalism strong and competitive, and its the socialist/regulationist elements that have held it back. The fact the America is an economic success only means that, so far, the successful mechanisms in the economy have managed to outrun the harmful ones. (But that’s a whole other debate)

I want to regulate capitalism because I think that without regulations the free market will lead to things I find reprehensible, and that, I hope, Vivek and Eric also find reprehensible.

I think that you’re somewhat unnecessarily complicating the debate by mixing two largely orthogonal concerns —- economic systems and legal systems.

Capitalism absolutely needs a strong legal system for the protection of property, enforcement of contracts etc.

When I say that capitalism should be unregulated, I don’t mean that capitalists should be allowed to do things not allowed by the legal code — e.g. keep slaves, steal, use physical force.

It is the responsibility of a legal code to protect the rights, property and life of a person. And an economic system, of course, has to follow that legal code.

What I was arguing for was that, besides things forbidded by a legal code, capitalism should be unfettered.

For example, all modern regulations on capitalism have nothing at all to do with the law. They are not of the form “you shall not keep slaves”, but rather of the form “you shall not have a market share greater that x%” (a la anti-trust).

And such regulations of capitalism are ultimately rooted in the principle of protecting those who cannot compete openly in a free market. The people who pay the price for such protection are those that do have the merit to win in the free market.

Thus, I view any regulation of laissez-faire capitalism as a wealth transfer from the deserving to the undeserving —- enforced at gun-point by the state. When that happens, it looks a lot like communism.

Before we can prove that unregulated capitalism naturally results in exploitation, we have to define what exploitation is. There are many definitions, but for our purposes here it is whenever Person A unfairly uses Person B to accomplish Person A’s selfish ends. The central issue, of course, is what constitutes “fair” and “unfair” use.

This is a rather complex question, one that has inspired scholars to write volumes of moral philosophy and logic trees. As a result, there are many ways to argue against the far-right position that unregulated capitalism doesn’t exploit, but perhaps the simplest way is to agree to all their premises and then show how unregulated capitalism fails to deliver the goods.

Their basic premises are generally as follows: everyone has a right to life, liberty and property. However, these are negative rights, not positive rights. That is, I cannot force you to give up anything so that I may enjoy life, liberty or property; I merely have a right to earn these on the free market. All exchanges should be voluntary and uncoerced.

Does unregulated capitalism deliver justice under such a paradigm? Not at all. To see why, let’s consider the following analogy:

Suppose that you are shipwrecked on a deserted island, which has a small patch of vegetation that bears enough food to feed you (and several others, if need be). After a year, a second person becomes shipwrecked on the island, but you have somehow managed to establish control of the only food source, and are able to deny its use to the newcomer. When he objects that he is starving to death, you counter-argue that he has no right to make positive claims on your property. But is your refusal a violation of his right to life? Of course it is.

But suppose he were willing to work for your food. Would you still be violating his right to life by rejecting his offer? Yes.

Now, suppose you took him up on his offer, but you take advantage of the situation to impose cruel terms: in exchange for complete subservience, you give him so little food that he dies of malnutrition in 90 days. In other words, you give him a “choice” of either starving to death now or prolonging it by working for you. Naturally, he will “agree” to his own exploitation. Is this still a violation of his right to life? To be sure. Could we call his freedom of choice truly “free?” Absolutely not, no more than if you held a gun to his head. Notice that the injustice remains even if you give him larger but still insufficient amounts of food, so that he lives only a year, or ten years, or twenty. And all the while suffering from failing health and disposition.

Of course, we should expect a decent person to avoid exploiting others like this, but history tells us nothing if not that human beings are highly self-interested, and all too ready to exploit others when given the opportunity. A prime example is feudal lords exploiting their serfs for fantastic profit. The supreme self-interest of individuals is why we no longer give absolute power to kings or dictators. These observations are entirely consistent with “realism,” a political philosophy which is home to most conservatives.

Next, let’s suppose a third person becomes shipwrecked on the island, and seeks food. Despite being outnumbered, you still somehow manage to retain control of the food supply, which is more than sufficient for three. Your defenses are quite strong and well designed, and any thought of overthrowing you is completely hopeless. Therefore, you feel safe in announcing that you will share food with the first newcomer only, and allow the second to die. Still wrong? Of course.

Now suppose that you add a refinement to your policy: you don’t care which one of the two newcomers will receive the food; you’ll simply let them bid for it and award the contract to the one with the lowest bid. As they compete for survival through bidding, they offer greater and greater subservience in return for less and less food. Finally, you accept a bid that will effectively starve one to death in 90 days, and leave the other to starve to death immediately. Still wrong? No question.

And let’s add another refinement: both newcomers are unaware or uneducated of the implications of the bidding system you are proposing to them. They happily agree to enter into bidding, and blame their subsequent deterioration of health on the glaring sun, their misfortune of being shipwrecked, or even each other. Does this make the system any more just? Of course not.

But what if you added a system of promotion? Say, you create an apprentice position which causes starvation in a year, and a journeyman position that causes starvation in ten years. Nope… still not there yet. Now suppose the island periodically receives newly shipwrecked survivors, and the system grows. To keep downward pressure on their bids, you make sure to keep a few of them unemployed and unfed at all times. But you also add a few supervisor positions that actually offer plenty of food. However, these good jobs form only 25 percent of the total, and due to the pyramid structure of the scheme, 75 percent of the newcomers will be excluded from them by mathematical force. Which is to say, you kill only 75 percent of them. Still wrong?

What if you add income mobility? You rotate all the jobs, so a person spends only 75 percent of his life struggling, and 25 percent in true prosperity. In other words, you kill them off only 75 percent as fast. Still wrong? Notice that this injustice becomes even worse by making this mobility a meritocracy, in which the smartest or hardest working rise to the top, leaving the bottom 75 percent with almost no hope of breaking in.

Adding other features of unregulated capitalism doesn’t rescue the system from its basic injustice. Suppose your island economy eventually develops both the tools and technology to cultivate crops on other parts of the barren island, and you put these items and education up for sale (or barter, in this case). Of course, the workers are already starving, so they can’t afford it. Only the supervisors will. (This generosity of opportunity is much like the NBA announcing that short people are free to try out for their basketball teams.) When the supervisors strike out on their own, they will create and hoard their own means of production. In other words, they will spread the same bad system to other parts of the island, including the unemployed, the exploited workers, and the well-compensated supervisors.

But doesn’t adding competition between owners change things? Don’t they compete to offer better wages to workers? Yes, they do… but only to the better workers, namely, the supervisors. An owner has only so much he can pay his workforce. If he wants to attract the best workers, it seems more logical to attract them at the supervisor level, not the entry level. (This “logic” is not entirely true, but it is given a major assist by the self-interest of those making these decisions.) Needless to say, the more you pay supervisors, the less you can pay workers. But suppose this strategy works; your talented supervisors increase your production. Don’t you have enough now to hand out raises to your workers? There are two possibilities: if your rival stays competitive with you, and makes similarly large salary offers to your supervisors, then the bidding war continues to divert any wage increases away from workers and towards supervisors. But if you bury your competition, then you become a monopoly, and you’re back at square one: able to exploit your workers without fear of competition. Notice that this is not a zero-sum argument; it works even when the economy is growing.

What if the tools, education and technology escaped to the masses, and everyone started growing their own crops on their own property lots? Despite overturning the old system, it will naturally reemerge. Why? Because true self-sufficiency is hermitism, which is an inefficient method of survival. It’s much more profitable to specialize in a particular job skill and become a member of an interdependent group. But interdependent groups involve an hierarchy of apprentices, journeymen and supervisors. (Try imagining a business operating without someone to coordinate the efforts of its workers, especially in a large, complex operation.) Furthermore, unemployment is a natural feature of economies (Milton Friedman won a Nobel Prize for his discovery of the “natural rate of unemployment.”) So the same downward pressure on entry-level wages will reappear, along with the same pyramid scheme of income and power. Back to square one.

The main question in all of this, of course, is why the first person on the island should be given absolute ownership of the property. “First come, first serve” is a terrible policy for property ownership, because it attaches moral significance to one’s order of arrival, not to individuals themselves and their labor. Which, the more you think about it, is quite indefensible.

An obvious solution is to remove property ownership from the hands of a few individuals and give it to all individuals. There are a number of ways to do this: one is to make everything public property, to be used freely by all. However, most people object to pure communism on the grounds that it’s nice to have a sense of privacy, and they like relying on things to be there when they want them or need them. Pure communism also reduces the incentive to work, since instead of producing what you yourself will use, you can always use what is already in existence and used by someone else.

Another method is to give everyone equal shares. This will involve continually subdividing property for the immigrants and newborns who join the group. (Failing to accommodate these newcomers will only result in the unjust system outlined above.) Continual subdivision is actually the system we use in modern democracies. The entire group owns all the property, and they vote (through representative government) on how this property is to be used. The voters have created a highly liberal system of property use, allowing great deal of personal freedom and privacy in the use of the nation’s property. But ultimately it belongs to the government — something which many people tend to forget. (You may think your property is all yours, because, after all, you own the deed and title. But these documents identify property as recognized by the government.) And the group votes to redistribute this property in the form of taxes, and control it through the passage of laws. Thus, democracy is the antidote to the injustice that occurs under unregulated capitalism.

There are degrees of regulated capitalism, of course. The island economy described above is an extreme example, but by gradually increasing democratic regulation, we can gradually reduce its unjust features. The next question we face is: does the United States really compare to our hypothetical island economy? And if so, by how much?

The many hymns to deregulation usually describe the success stories that occur immediately after deregulation. This is always a period of price-slashing and better service as companies compete to attract more customers. But there is always more to the story, which often takes years to play out. The latter stages of deregulation feature generally look like this:

-There is a perpetual elimination of the weakest companies, even when only strong ones are left.
-During the heated competition phase, the name of the game is not prosperity, but survival.
-Corporations become desperate to cut costs wherever possible to maximize profits.
-Consumer and worker safeguards are reduced or eliminated.
-Environmental safeguards are reduced or eliminated.
-Convenience and comfort are reduced or eliminated.
-Wages are reduced.
-Workers are laid off by the thousands.
-Production and workloads are pushed to the limit, often at the risk of life and limb.
-Entire markets — for example, rural areas — are dropped if they are deemed low-profit.
-In the final stages, a monopoly or oligopoly emerges, after which prices are raised, services dropped, quality reduced, and corruption and abuses of power become commonplace.

Workers from failed companies continue working in their fields by either joining the few surviving giants (usually at lower wages) or working alone (always at lower wages). In other words, a monopoly or oligopoly will dominate the market, but hundreds of nickel-and-dime operations may work around the edges.

Of course, competition, corporate restructuring and eliminating inefficiency are all necessary to keep an economy healthy. A moderated meritocracy allows competition to thrive right up until the point where it becomes destructive, and then it steps in to prevent trouble. The advantage of such a system is that competition becomes sustainable. It is a supreme irony of unrestricted meritocracies that what starts out as a wide open field of competition sooner or later winds up as no competition at all.

After the trucking industry was deregulated in 1980, truckers ran their trucks without maintenance until they became road hazards. More than 100 companies have gone out of business since then, and 150,000 truckers at those companies have lost their jobs. The surviving majors hired them back, but only after cutting their wages. At least 350,000 truckers are now private owner/operators, which are not reflected in government trucking statistics; they make even less than their corporate counterparts.

In 1982, Savings and Loan lobbyists bribed Congress to quietly deregulate the industry. In effect, Congress promised to cover any losses if S&Ls made bad investments with their customer’s savings, but also promised not to regulate or oversee these investments. Industry experts call this arrangement “moral hazard,” because it tempts investors to abandon their normally cautious, conservative investments and make high-risk, high-return gambles instead. Not surprisingly, fraud and abuse soon ran rampant in any institution that called itself an S&L. Investments turned sour; to cover their losses, the culprits committed even more sins.

Charles Keating was caught attempting to bribe five U.S. Senators to bail him out of trouble. To date, about 650 S&Ls have gone under, and another 400 are threatening to. The final bill to the taxpayers: half a trillion dollars.

With amazing audacity, Congress then set out to deregulate the banking industry.

After the cable television industry was deregulated in 1984, prices soared, quality of programming plummeted, and cable systems began selling their channels in indivisible blocs that prevented subscribers from voting with their dollars. From 1986 to 1990, the cost of basic service rose 56 percent — twice the rate of inflation. (3) The problem? Growing monopolization, at several levels. There are now 11,000 cable systems across the nation, almost all of them exercising a local monopoly over their municipal region. They in turn are controlled by a handful of national companies.

By far the most dominant is the ever-expanding TCI, which is a gatekeeper over national programming. Its owner, John Malone, owns all or part of 25 national or regional cable channels, including Turner Broadcasting. (4) Because there is little or no competition, cable programmers search for the cheapest shows to produce. Quality of programming has sunk to network TV levels. It seems that each year, Congress passes yet another cable deregulation bill. Every single one has been touted to “open competition” and “benefit the consumer.” But the concentration of power in the cable industry keeps getting worse, not better.

The deregulation of cable is only a small part of what is happening to the media in general. In 1983, Ben Bagdikian published The Media Monopoly, which warned that continuing deregulation of the media under Reagan’s FCC was allowing the media to be bought and controlled by an ever-shrinking number of corporate owners. Once called “alarmist,” the book is now considered a classic, because all its predictions have come true.

By 1992, the number of corporations controlling the media had fallen from 50 to 20, and more media mergers are inevitable. ABC is controlled by Disney, NBC by General Electric, CBS by Westinghouse — and all these parent companies are renowned for their conservative political activism. Most cities have become one-newspaper towns, with giant companies like Gannett and Knight-Ridder buying every paper in sight. Once a newspaper has been taken over by one of these giants, the same things happen: to maximize profits, editors lay off journalists, reduce local stories, rely more heavily on national news wires, publish more sex and violence, and increase their advertising. The drop in quality is so great that even Gannett’s CEO admitted his papers were journalistically “embarrassing.”

Almost every year, Congress deregulates the media still further, even as dizzying new mergers make headlines. The 1996 Telecommunications Act became notorious for censoring sexual content on the Internet, but perhaps even more insidious was its massive deregulation of the media. By the time information has become centralized in this country, we will have finally abandoned the ideal of a free press.

Deregulation in the telephone and transportation industries have brought different results to different sectors of the nation. Companies have dropped routes and services to poor communities, or only offered them by raising prices exorbitantly. Senator Byron Dorgan (D-North Dakota) said as early as 1983: “There have been some benefits from deregulation, but they have gone largely to population centers, while the costs have gone to rural areas.”

Long distance telephone rates fell 38 percent in five years, but about three-fourths of the calls were routed through 18 major cities; for the rest of the nation, local service climbed 50 to 60 percent.

Labor unions also suffered heavily from deregulation. In 1986, Alfred Kahn, an architect of deregulation under Carter, admitted that 3 million union members in airlines, telecommunications, trucking, bus transportation and other industries had taken a severe blow after deregulation.

On the other end of the spectrum, surveys in the late 80s showed that businessmen gave only qualified support for the era’s deregulation. For example, although they enjoyed the lower air fares of their business trips, they were troubled over airline delays, loss of routes, long reservation requirements and air safety reductions.

To be sure, some regulation in the past has been ham-handed and ill-conceived. But this means it should be improved, not eliminated completely. A good analogy is that of a referee who makes a few bad calls in football game. The solution is to find better referees — not throw them out completely.

Christopher,

By ‘America - Capitalism = Slavery’ I meant that the more of capitalism we regulate and the more we disrupt and hamstring market forces the less freedom we have.

Actually, the roots of both communism and capitalism go back into ancient times. Plato describes the utopian idea that men should live without private property entirely. And of course if you consider the common concept of trade to be capitalism then it is older than that still.

Capitalism, as it has become a concept of social order is a recent invention. Not of one man as you say but many men over a long time. Like the scientific method. As observations of what works and what doesn’t. In fact the rise of science and the concepts of capitalism arose at the same time. What has been observed by generations is that free people make better decisions about their own survival and economic prosperity than others do for them and from that a remarkable observation that the society itself was better off as a result. This is a revolutionary idea. The idea that freedom holds the primary economic value for society. Private property and the freedom to dispose of it as one pleases.

The history of mankind is one of despotism and tyranny. The opposing philosophies are essentially divided into two main camps. Those who advocate the use of force to impose their will on others, and those who advocate freedom from people imposing their will on others. The concept of Capitalism as an economic system advocates the latter. Government’s job within this concept is to keep people from using force or fraud against each other. All other voluntary relationships are off limits. (Basic libertarian concept.)

You are right that Communism as an economic system has been thoroughly discredited and is not only an absolute failure but that it’s claims and arguments have been proven to be a lie. Such as the idea of social justice, equality through forced redistribution, the idea of an economy without private property, the unlimited power of the government to mold behaviour and create a better society through force etc. etc.

You are wrong to say that these ideas are no longer proposed by people in America today. What is the call for a single payer health care system after all than a call to enact these same ideas? The website of Communist party of the USA has remarkably similiar positions to the Democratic party.

I want to regulate capitalism because I think that without regulations the free market will lead to things I find reprehensible, and that, I hope, Vivek and Eric also find reprehensible.

Is the freedom of Walmart to pay it’s employees lower wages than they would like akin to slavery? Is the natural working of the market, i.e. Walmart’s efficency making other business models obsolete, akin to slavery?

What is the principle upon which your regulation will be based? What are the rules? What limits does such regulation have?

…This is why I brought up slavery in the first place: A person who wishes to legally outlaw things like slavery, indentured servitude, usury, child labor, etc., is a person who believes that a totally unrestrained free market will inevitably permit these horrible things to exist, that market forces alone will not suffice to suppress these forces. I believe that, with no moral or legal constraints, a free market will create such things. History has proven me correct.

These things are already outlawed. But you’ll notice that each of them conforms to the idea that government regulation should limit the use of force against each other.

Lovecraft,

Your shipwreck analogy is nothing if not illustrative of thinking of the liberal-progressive mind. As a capitalist and entrepenuer, a man concerned only with my own self interest, your situation is laughable and your suppositions totally wrong. Stranded on a desert island my self interest would propel me to welcome fellow ‘strandees’ as it would increase not only my likelihood of my personal survival, but also the likelihood of rescue and/or getting off the island.

The mentality you describe has nothing to do with capitalism. (It may have everything to do with your concepts of human relations and political theory.)

The main question in all of this, of course, is why the first person on the island should be given absolute ownership of the property. “First come, first serve” is a terrible policy for property ownership, because it attaches moral significance to one’s order of arrival, not to individuals themselves and their labor. Which, the more you think about it, is quite indefensible.

The situation you describe much more closely resembles government action. The first person shipwrecked, as the governing authority on the island, assumes absolute ownership of the property and naturally acts as a monopoly. Doleing out the food to it’s citizens to protect them from the oppressiveness of free competition in harvesting the food.

Eric,

It might be better then not to think of the island analogy in such literal terms. Of course we would all cooperate fully with other survivors to improve our survival chances! But replace the island with the limited resource of your choice…say currency, oil, or food. You cannot apply the desire to cooperate on an island into the real world. And as the second comment I posted demonstrates, unregulated capitalism always drifts back towards monopolies after the initial period of competition and a winner emerges. It is then that the real world resembles the island scenario: limited resources being distributed by individual companies, or monopolies. Much like food being distributed and controlled by our first survivor, in which case the various degrees of exploitation begins.

The Savings and Loan Scandals in the early 80’s, as well as the emerging Cable and Media monopolies, are prime examples of this process. Once you remove the peoples right to vote with their dollars, and we are given but singular choices, we are fully at the mercy of the “first island survivor”!!

Lovecraft,

Of course we would all cooperate fully with other survivors to improve our survival chances! But replace the island with the limited resource of your choice…say currency, oil, or food. You cannot apply the desire to cooperate on an island into the real world.

This just proves my point. If we naturally act that way on an island the whole scenario is irrelavant.

I’d contend that people generally do cooperate for survival within capitalism. My neighbors are very generous. Even so, I don’t expect my neighbors to work for me without something in return. This is kind of the point of a market. Exchange. Your island example is not capitalism, it’s much closer to Saddam Hussein or Stalin.

What if one man knows how to make fire and purify the water, another knows how to prepare the exotic wild life and avoid the poisonous plants. They agree to exchange knowledge and or products. The example is a little useless because in an economy there are many people with whom you can trade.

Someone has to mine the coal and process it. Someone had to grow the food to eat. They use money as a medium of exchange to work for each other. Supply and demand determines how valuable things are. Knowledge or products that are easily aqcuired become less expensive.

And as the second comment I posted demonstrates, unregulated capitalism always drifts back towards monopolies after the initial period of competition and a winner emerges.

But monopolies do not exist without the use of force. Knowledge is a difficult thing to hide. As long as we are all free to do the same things any ‘monopoly’ which exists will be that which is dictated by choice of consumers. Setting aside patents etc. the most recently falsly accused monopoly is Microsoft. There are alternatives. Linux is a great operating system, I have Linux operating on one of my computers.

Name me a capitalist monopoly which did not employ thugs to use force or bought off politicians to maintain their monopoly.

can we please recognize that seeking profits at the expense of ruining the lives of workers is wrong? Not just morally, but for the long run market as well? I would also like to point out that the union busting tactics that Wal-Mart is notorious for using are not just wrong but often illegal.

mdon860 wrote:

> can we please recognize that seeking profits at
> the expense of ruining the lives of workers is
> wrong? Not just morally, but for the long run
> market as well?

Agreed. In my next post I will say almost the same thing, but I will use a thousand words to do it.

-Cf

Vivek wrote:
> I can see your point when you say that
> anti-capitalists should not be automatically
> labelled as “communists”.

I agree with you, but that wasn’t my point at all. My point was that people who think that capitalism can and should be regulated aren’t even “anti-capitalists” at all. You are fighting an imaginary enemy if you think that “anti-capitalists” are a real menace to American capitalism.

> What I’m saying, though, is that it’s an
> oxymoron to use the term “regulated capitalism”.

You call it an “oxymoron” and I call it “redundant”. To me, capitalism can ONLYsafely exist with regulation. To you, it does not truly exist until regulations are removed. Your theory, of course, has never been tested, although there have been places and time periods in which we have come close to capitalism unrestrained by regulatory mechansisms (post-Communist Russia, pre-Depression America).

Time for a litle bit of a pedantic tangent (i am being the pedant)… Vivek also wrote:
> America has a “mixed” economy
> America is successful
> Hence, a mixed economy is successful.
>
> Anyone who’s taken an elementary course in
> mathematical logic will know that such a
> line of reasoning is incorrect.

What’s incorrect about that? It would be incorrect to argue that *all* mixed economies are successful, but that’s not what you wrote. It is perfectly logical to point out that *a* mixed economy is successful, since America is *a* mixed economy and we *are* successful, even in the world of your “syllogism”. What you wrote has the form of a syllogism, and while it is not incorrect, it is logically pretty ugly because it is, in essence, the ultimate logical faux pas: a tautology. :)

Now, back to the issue:
> you’re somewhat unnecessarily complicating
> the debate by mixing two largely orthogonal
> concerns —- economic systems and legal
> systems.

This is an interesting argument - if I write a contract with you, then I break the contract, it’s fraud, not a flaw in capitalism. I think, though, that I am not speaking about things that are inherently illegal or immoral, or at least I am talking about acts that haven’t always been considered so. Indeed there still exists commercial “crimes” about which lots of people disagree about whether or not they are crimes at all - prostitution, gambling, drugs. There are plenty of social problems and economic catastrophes that capitalism is capable of (even prone to) that have nothing to do with normal civil law.

I’ll admit that slavery isn’t the clearest example: It’s easy for a modern American to think that slavery is just obviously bad, but to many 19th century American minds this was not the case. To many Americans, slavery was not illegal, or even immoral. It was just another sector of the economy. It only ended in America when the voices that opposed it violently forced their will on those who supported it.

(It is important to note that capitalism didn’t create slavery, but New World slavery was, from top to bottom, a capitalist endeavor. American slavery could not have existed without the tools of capitalism. This is not an indictment of capitalism, by the way.)

It seems to me that lots of existing market regulations and legal constraints on pure capitalism are examples of our culture “realizing” that certain practices should be controlled or even illegal, whether or not the market will support those practices. We realized that the market wouldn’t make slavery go away, so we made it illegal.

Let’s look at usury: To many people, including myself, there is nothing immoral about charging interest on loans. It becomes a problem when the interest rates get very high. I’m sure that economists would agree that legalizing exorbitant interest rates and payment schedules is not good for the economy as a whole. Yes, banks compete by charging competitive interest rates, but there will always be a desperate strata of society who will have no choice but to reach for the high-interest loans. Many economists argue that, since the loosening of interest rate laws in the USA in the 1980s, the American people are sinking so deep into high-interest-rate personal debt and declaring bankruptcy at such an alarming rate that we could be heading towards a real economic disaster as tens of millions of Americans could in the next decade declare bankruptcy, creditors everywhere. (Of course, the capitalist would argue “so what? So a hundred million Americans land in poverty through their own financial stupidity while the smart ones end up living in luxury.” This may be true, but I’d hate to live in that country.)

Let’s look at pyramid schemes: For the most part, pyramid schemes are basically honest business deals. Many of them not do not rely on fraud at all. In fact, early participants actually tend to make good money. But they are nevertheless rightly illegal because they cause enormous numbers of gullible people to needlessly lose money, which disrupts the economy for everybody. One could easily argue that people who enter pyramid schemes are simply poor players in the capitalist game, and that they deserve the ruin they bring on themselves. But when people needlessly sink into poverty.

Let’s look at gambling: Similarly, gambling could be portrayed as simply two or more parties engaged in a binding contract where the outcome of the contract is determined by chance and where the odds are (usually) openly and clearly stacked in favor of one party over another. If you play a slot machine, you are a fool. But people *are* fools, and gambling causes poverty and ruin - and financially ruined people can easily cause harm to other perfectly innocent parties through debt, crime, and public nuisance.

Let’s look at child labor: What’s wrong with hiring a fourteen-year-old to work in a coal mine? What about an eight-year-old? For a long time, it wasn’t even illegal. Now it is. If you wanted to hire ten year old to work 14 hours a day on a drill press, and you found a ten-year-old whose parents were willing to let the child work that job, this was considered okay — not just by the desperately poor parents who couldn’t afford high moral standards about child welfare, but by the business owners who were educated enough and wealthy enough to know better. But they did not know better because they were blinded by the promises of unfettered capitalism. They couldn’t even imagine that what they were doing was immoral. It took a revolution in social thinking to remove our children from the workforce, and it seems clear to me that this revolution was equal parts (a) social enlightenment about the rights of children and (b) a retreat from the excesses of unrestrained capitalism.

Let’s look at workplace safety regulations (for adults): In 1900, if I wanted to build a firetrap of a factory with no windows and pack 200 seamstresses into a single room with locked doors, I could go right ahead and do it. Until the Triangle Shirtwaist fire in 1911, there were ZERO laws or regulations telling employers that they had to protect the safety of their employees. No commandment or moral precept told us that employers had to take precautions to protect their employees’ safety, especially if such precautions cost the employer so much that they could not afford to exist as a company any more. Workplace safety laws had to be deliberately invented because the explosive growth of capitalism during the industrial revolution didn’t forsee such catastrophes. A purist capitalist would argue that employees who don’t want to work in unsafe factories don’t have to (Better an unsafe job than no job, right?), but the real world tells us that employers will always find someone willing to work under any conditions.

I could go on and on. In the end, I disagree with the idea that capitalism is just an economic system. To me it is everything about how we interact with each other, and it is irrevocably wrapped up in moral, ethical, and social responsibilities. We cannot and should not sever the two.

-Cf

It seems to me that lots of existing market regulations and legal constraints on pure capitalism are examples of our culture “realizing” that certain practices should be controlled or even illegal, whether or not the market will support those practices. We realized that the market wouldn’t make slavery go away, so we made it illegal.

I agree in part. We have to ‘realize’ that certain practices should be regulated. But that does not mean that everything we ‘realize’ is necessarily valid. And it’s not as simple as making a law and it going away. The market is people’s opinions and choices. Without it laws mean nothing. Making the the drug trade illegal did nothing to make it go away.

The proper role of government is regulation. But regulations must have boundaries and people must have rights. Just as freedom of speech limits the governments ability to regulate speech to that which actually causes harm, we should have economic freedoms which limit the governments ability to regulate economics to that which actually causes harm.

In your examples, for example:

Usury. Interest rates are relative. Who will determine what’s high? If 20% is too high why not 19%? I say 10% is too high, but then that’s my opinion. If I am in the business of lending money I want to be able to not lend to those who I think will ‘steal’ it by declaring bankruptcy. Or charge higher rates for the risk.

Pyramid schemes. Pyramid schemes are not ‘basically honest business deals’ even if some people actually make money. I am surprised you would even say that. It is fraud to all those who are promised returns that are not possible and are never intended to be delivered. It’s Fraud, period. (Unless the government is running the ponzi scheme and then we call it social security.)

Gambling. Legal. The government regulates it to limit fraud. Perfectly a-ok in this capitalists opinion. Caveat emptor. Buyer beware.

Child Labor. Had as much to do with capitalism as slavery did. Here’s another example of the slander capitalism receives. It’s not as though kids began working during the industrial revolution, they continued working. Child labor was practised throughout history in agrarian cultures where families lived on farms and kids were expected to work. Factories came along and kids worked there too.

Here’s another instance where a change of society and culture led by economic conditions brought a change from the past. What ended child labor is that work shifted from the fields to the factories. People could make more money working in a factory than in the fields, eventually making it possible for kids not to work. Working conditions were too strenuous for children and the separation of parents from children made it unpalatable for children to work in factories. It was regulated as a result of these realizations.

Workplace Safety regulations.

Workplace safety laws had to be deliberately invented because the explosive growth of capitalism during the industrial revolution didn’t forsee such catastrophes.

Precisely my point. Who can see into the future? Certainly the regulators didn’t. Workplace regulations protect workers AND owners from harm. No one is saying that under pure capitalism building codes would be anathema. Again, that falls under the protection from force or fraud. You don’t expect the roof to cave in when you go to work do you? There is a reasonable expectation that such things will be safe. Perfectly realiable regulation under capitalism.

Which brings me to your last point about morals.

I disagree with the idea that capitalism is just an economic system. To me it is everything about how we interact with each other, and it is irrevocably wrapped up in moral, ethical, and social responsibilities. We cannot and should not sever the two.

This is where we have the disagreement. What standard of morals and ethics are we to use? Are there parameters for the morality and ethics we are to base these decisions on? Because not everyone’s idea of morals and ethics are equal.

Ask a Green Party member how to apply morals and ethics in regulating capitalism. It will sound to my ears very much like implementing communism (or some variant.)

For that matter if we reduce the definition of capitalism to ‘everything about how we interact with each other’ it means very little in terms of economic rights. I think I would agree with the statement in a different sense. Because markets do encompass the whole realm of human interaction. But we must have a standard and a ‘bill of rights’ if you will that will keep the balance in favor of freedom.

I have one small comment on this wonderful informative debate.

Eric - I have noticed on many of your posts to Watchblog a trend in which you question how government regulations (usually economic regulations) are decided, agreed upon, and enforced (usually in response to another poster who states that regulations are necessary). The underlying implication always seems to be that because these are difficult decisions, we should forget about them entirely.

And yet at the same time you have admitted that certain regulations on capitalism are necessary.
So I am confused on why you keep asking those type of questions. The fact that you endorse some level of regulation (which you and Vivex refer to as “legal matters” and try to distance from the entity of capitalism) proves my assumption wrong to some degree about your apparent complete disregard for regulation. But you rarely offer solutions to those rhetorical questions. Categorizing these regulations as legal matters (outside of capitalism) does not diminish their impact on the workings of the economic structure, nor does it diminish the importance of answering those difficult questions that you raise.

I think if you directly answer those questions about “what limit should there be on interest rates?”, “who has the right to decide this or that?” etc, etc… whatever, then there would be a real productive debate. I think the righties and lefties agree more than anyone will admit here, and the real debate is about the degree to which the government regulates economic practices and controls economic policies.

My only real point in commenting is that from the sidelines, I am fascinated by all the brilliant points being made, but from my vantage point, most are sidestepping the real point of disagreement in this matter.

peezee,

I agree with you that the right and left agree on a lot of things and aren’t really too far apart in actuality. I think that’s the reason things don’t change too radically.

And yes, I also recognize that my points are sometimes abstract. I guess I am thinking more along the lines of the broader debate. Somewhat more philosophical in dimension.

I think blogs like this one are a new and essential part of the marketplace of ideas. We need debate. We need to argue about every niddling detail sometimes. It’s a part and parcel of our democracy. I don’t know, it seems to be working. History shows that political disagreements have more often than not been resolved in blood and violence. Luckily, here and now, we just talk each other to death.*

To more directly answer at least one question I posed, ‘what limit should there be on interest rates.’ I think that as long as there is adequete freedom of opportunity we shouldn’t worry so much about precise equality. It does more overall harm than good to cap interest rates at an arbitrary level. It’s the same with price caps. It’s one of those things that does not change because a law is passed.

Supply and demand are *almost* natural laws unto themselves. Let’s say I am a bad debtor, a real bad risk. I’ve defaulted and filed bankruptcy every seven years. Right now I need to borrow money. But every loan I can get is at extremely high interest rates. So high that it doesn’t actually make sense for me to borrow the money because I can’t really afford to pay it back. So I either get the loan and later default, or try to reorganize my life without the loan, scrape by and try to pay back my existing debt. Or make debtors an offer. ;)

What happens if interest rates are set artificially low? Great for me. If anyone will actually loan me the money. Because I am still the same risk. They still know that, except now they don’t get compensated for taking that risk. At some point a lender is going to say if I am not going to get a return commesurate with the risk, the risk is too great.

Of course now someone will come along and want to pass a law making it illegal for the lender not loan me the money because it’s discriminatory or unfair or just morally wrong. Now I can get a loan that costs me less but unless Walmart gives me that raise I’ve been asking for odds are that I may end up defaulting on this loan too. This can wreak havoc on moneylenders and on the whole system of finance. Lenders will find ways not lend the money. Many will go out of business leaving fewer options for people to borrow money. Fewer options means less opportunity to finance entrepeneurial activities.

This is arguably the main problem in third world countries who have seemingly adopted capitalism but never are able to get the economic engine going. There are too many people unable to turn their extralegal property into capital to invest. (Source: Hernando Desoto.) Price controls seemingly making things affordable actually make products scarcer.

Of course interest rate caps are used all the time in finance to protect against volitile interest changes. But the buyer usually pays for this protection.

Eh. In short there is so much information involved in the workings of ‘markets’ that no group of wise men charged with managing it could even theoretically make the decisions in place of all of the people who make up that market making decisions everyday based on the information they have regarding their particular situation. Human experience is too varied and too involved to be micromanaged from on high.

Best to set broad parameters to govern the basic operation within which people can make their own decisions. Even though a particular situation may seem unfair to some, as long as it does not involve outright fear, fraud, or force the situation may rectify itself. Often, the stingy become victims of their own devices. Pay too little and you get shoddy work. Pay too much and you get lazy arrogant workers. (Not in every instance obviously.)

Eric, your arguments are mostly quite sound. We both agree that economics and law are intertwined with our culture’s values, and that a lot of this debate has to do with simply agreeing on what those values are.

(I should point out that a good deal of my argument was against Vivek’s purist libertarian perspective, a point of view which is often conflated with the idea of “capitalism”. I don’t think that Vivek would agree with you that governments have any role to play in regulating what we do with our money. To the libertarian mind, there are no values besides life, liberty, and property. Most other people’s value systems are more complex (or convoluted, depending on how you look at it!).

Anyway: You suggest that as capitalism has grown so has freedom and prosperity grown for those who live under it.

It occurred to me, however, that perhaps this is entirely backwards: Perhaps the entire history of humanity might be viewed as one in which governmental restraints on capitalism have done nothing but increase over time, in direct proportion to humanity’s general increase in freedom and prosperity.

This is certainly true of the past one hundred years, during which time the bureaucracy of the goverment has done nothing but increase. Even the income tax itself is only 90 years old, and it would be hard to argue that the past 90 years have been bad for America or for capitalism.

Going back 200 years (or even 2000 years) I think the trend still holds: one’s freedom to spend one’s money as one chooses has done nothing but decrease. What has increased, of course, is the variety of things one can do with one’s money. Another big difference is that we’ve changed our moral and social systems to limit the powers of warlords, aristocracies, slave traders, etc.

Adam Smith opposed state control of wealth, but please remember that the “state” he was rebelling against was a monarchy (during a time when monarchies were addicted to arbitrary taxation for financially ruinous adventures and were entirely unaccountable for their own mismanagement). That’s a poor analogy for the modern American system of elected government and accountable economic management.

-Cf

I have said to democratic freinds that we agree on ends but disagree on the means.

Perhaps the entire history of humanity might be viewed as one in which governmental restraints on capitalism have done nothing but increase over time, in direct proportion to humanity’s general increase in freedom and prosperity.

I would disagree, and here’s why. Governmental restraint on economics (or pre-modern-proto-capitalism) has been more stringent in the past. Monarchies operated in a fascist or command and control manner. History’s rulers start from the premise that everything belongs to them and they give the people permission to use what is theirs. Everything belongs to the state.

The source of the fuedal serf system for instance was first set in place during the latter part of the Roman Empire. To make it easier to collect taxes they began making it law that you could not leave your province, diocese, or village without approval. Then they made it law that your children would stay in the profession you were in. Diocletion invented serfdom!

In my opinion here is the answer to why Rome fell. Once Rome fell the people didn’t all just leave. They continued living as they did. Local Lords took over. They were still Romans and still lived under Roman law in most respects. We call that the Dark Ages.

One cannot make the case that government regulation is the creator of prosperity and freedom. It is more likely from the evidence to conclude that as of yet we have not reenacted the extent of control practised throughout history.

Ah, but in “ancient times” the serfs and slaves you speak of weren’t fair participants in the economy at all - they were subject, as we’ve both pointed out, to the arbitrary physical force of the warlords and monarchs they served. I think it’s comparing apples to oranges to compare the economic rights of a pre-modern peasant (who is forcably subjugated to the will of a feudal lord) to the economic rights of a typical modern American (who, through modern civil rights and legal protection, enjoys rights that, in many ways exceed those of a feudal lord). To call a monarchy a “government” is like calling a slave master an “employer”. If you have 200 slaves and five Roman Senators at an auction, you are looking at 5 laissez-faire capitalists and 200 victims of a pre-capitalist way of life, victims of physical force whose rights and free participation in the economy are moot questions. Thew majority of these people are victims (but, as Vivek and you both argued, not victims of capitalism but of a more ancient social dynamic), but the economic system, such as it exists for the ruling class, is still capitalism.

In other words, you could argue that “pre-modern-proto-capitalism” didn’t exist for the vast majority of people because humankind had not yet invented the modern democratic, representational, capitalist, human-rights based state we enjoy today.

But proto-capitalism *did* exist, however, among the ruling classes, and for them it was pretty much laissez-faire. Among the pre-modern aristocracy, there has almost always been little or no constraint on how they could spend their money.

It’s not just capitalism versus state control. There are three interrelated, synergistic forces at work here:
1) The intellectual and moral advancement of humanity with regards to human rights.