Why I "Trust:" Capitalism

Last week I made the case why various degrees of socialism (currently embodied in the health care plans being vomited out in Congress and the recession-era Bush/Obama economic strategery) are ultimately destructive to your country and way of life. But I'm not one to be satisfied with pissing in another's cereal, unless I also have something better to replace it with (like bacon and eggs covered in sausage gravy (yum-o)). And the opposite of absolute government control is a pure fee-market capitalist system.

Now before I delve into details, I want to be clear, just as aspects of socialism are not 100% bad, capitalism is not 100% good, and is therefore subject to necessary moves to curtail excesses. I'll explain that in a bit.

First, talking points for the masses/talk show hosts/party hacks that have failed to think for themselves.

Capitalism is human nature - We are creatures of our rational self-interest. We seek to gratify ourselves, get the most bang for our buck, and triumph over the weaker amongst us. Capitalism plays to that natural tendency, because productivity, frugality, and innovation are rewarded. Almost everything that we have today were invented by the individual to fill a need or want, to improve productivity or lower cost, to outlast and win over others.

Capitalism is about freedom - You possess the ability to try to get the most out of your services (wage/salary), to associate with whoever you choose to advance your own interest (unions), buy based on your personal choice/philosophy/political bent. It allows companies to spend their advertising dollar to support/snub those programs they agree/disagree with (the Glenn Beck advertiser situation, for example (nod to Shaw for the story)) and for others to then boycott those companies for their decision. In essence, the spending of dollars as you choose is economic democracy, compelling no one to act against themselves.

Capitalism the only natural perpetual economic state - From the beginning of time, when not oppressed by an autocratic government or engaged in the exhausting and ultimately futile pursuit of war, men have sough to survive by the free exchange of goods and services. From ancient barter systems to the current economy, it has always been about improving yourself through trade and work.

Now, as I said above, pure capitalism is not absolutely perfect, and has the potential for abuse. After all, even in ancient days, if Ug was the only yak dealer in town, Ug could charge an arm and a leg and a nubile daughter for a yak, and your choices were either pay, go without, or (if you could get away with it) kill the bastard. Obviously, the last option is no longer reasonably possible (thus came the Monopoly-busters. After all, one reason we instituted governments was to protect the rights of all individuals (both Ug the yak dealer and his pissed off customers). Thus, there is a place for government and their regulations to insure a free-market system is free.

Government is the regulator of last resort - It is possible for an industry to regulate itself. We've seen this over the centuries with guilds and trade unions, who act both as a collective bargainer and a board of standards for their tradesmen, seeking to make their product (the tradesmen) more valuable by insisting on higher quality work. And more recently, the ESRB, who assigns ratings to video games, has stepped forward before the industry fell under the heavy-handed control of the government (not that the government and hyper-moralistic asshats haven't tried). It's only when self regulation does not work that the government's role in regulation becomes clear. And then, the regulation should occur at the lowest level possible (the federal level being the last resort of them all).

Governments role is to regulate, not control - Where government must intervene, the role of any government is clear: Regulations are to preserve the rights of all individuals (including corporations) equally. A perfect example of this is the payday loan industry. An appropriate role for state government is to ensure transparency in their dealings, requiring them to clearly post such information as their fees, rules, and exorbitant interest rates (making loan sharks look cheap). But government (like my home state of Ohio) oversteps that bound when they regulate how a company or industry is run, like fixing interest rates in this example. Other examples of proper behavior include controls when there is obvious deceit, enforcing laws fairly, and , arguably, intervention in monopoly situations when the market, due to legal forces, is unable to correct the imbalance.

Government only functions properly when it serves all equally - Free competition in the marketplace of ideas, including money to political candidates, is key to ensuring this, while transparency is necessary to keep the politicians honest about their motivations. It's a variant on the idea of not controlling behavior. And part of the governing body should be set apart from the leanings of individuals and corporations. the US Senate, until the passage of the 17th amendment, was a body selected by the states, not the people, and therefore had some interest apart from pleasing voting blocs and donations.

Now there's one last point that ties these two parts of the system together:

Capitalism under a limited government requires personal responsibility! - Now I know that this phrase is often over-used, but there's a reason. Because none of the above works with an unmotivated, uninformed, and uninvolved population of sheeple (very few of whom read this blog). Because like every problem that I say can be fixed by the above, it's incumbent on the people to embrace the needed responsibilities as they did in the days when the choice was either to take responsibility or surely die. Except now, the stakes are not the death of an individual, but the death of a society.