Capitalism 104 Phyxius: After getting pasted by craez the other day, I decided to do a little more research into some of the fundamental differences the GOP and Democrats have on economic issues. All of you Libertarians out there, read, review, and poke a few holes in this - if you can...  ;)


[size=15pt"> Capitalism 104 [/size">

By Larry Beinhart



In Capitalism 101 we learned that capitalism was good. It beats communism, any day, hands down, out and out.

It also beats socialism which is soft core communism and leads to degeneracy. Really, it does. We all know that profit motivates people to work hard. And fear of becoming destitute is the most efficient of whips. Whereas in a planned economy, which provides security, workers lose their motivation, and their fear and just sit around and jerk off.

It also beats all the other isms. Mercantilism (whatever that was), fascism and feudalism, to name a few.

In Capitalism 102 we learned that capitalism easily gives way to excesses.

It can be manipulated by monopolies and cartels. Fraud and deception can run wild. So can desperate hope and hopeless desperation. Capitalists can hire armies, police forces, goons and thugs to increase their profits. Fraud and deceit may run wild. Capitalists will sell shoddy, poisonous, destructive and even murderous products. It goes from booms to busts. And some of those busts - also called panics, recessions and depressions - can be so severe that they upset the body politic and cause society to run to one of the other isms - communism and fascism mostly - run by dictators and strong men.

A few relatively bright people came up with the idea of keeping capitalism while trying to get rid of the excesses!

That meant regulations.

Markets were regulated. Products were checked. Monopolies were restricted. Cartels and collusion among businesses were forbidden.

It meant government insurance. For both people and businesses. People in America got unemployment insurance, workman's compensation, welfare and social security. Meantime, bank deposits were insured and so were pensions.

It meant government support of unions.

It also meant progressive taxation.

All this was quite successful.

In Capitalism 103 we learned that capitalism is sacred.

A lot of people who only took Capitalism 101 already thought that.

Although the failures of capitalism happened before their eyes - or in recent history - and the success of New Deal reforms and mixed economies of Europe, Japan and other Asian nations were present in their growing wealth and security, a fair number of people were convinced that unrestricted capitalism would have done even better and if those restrictions and regulations and supports and government insurance were removed, things would get better still.

The reason they believed that was that Adam Smith, a great though loquacious philosopher and economist, came up with a metaphor about an invisible hand. People pursuing their own individual gain would also often create other good things - the wealth of nations (to steal his title) - without even thinking about it, as if by an invisible hand.

As we all know, there's only one other person who guides all things to the greatest good with an invisible hand.

Nobody was around to say to those folks, "It's just a metaphor! Note the 'as if by.' It's not an actual invisible hand that belongs to an invisible being who watches over us all and sees every sparrow that falls and makes sure that it falls into someone's cooking pot. It's not Him."

So while the mixed economy was cooking along a group of economists starting preaching neo-free market economics. Led by Milton Freidman, who won the Nobel Prize in economics and is considered to be the most influential economist in (at least) the 2nd half of the 20th Century.

Rich people and big business loved Friedman and the Chicago school of economics. Money flowed into think tanks and universities that supported his ideas. Pro-free market economists and MBAs were far more likely to be hired by corporations than people who thought that the common good was important. When banana republics and other Third World nations fell into bankruptcy, the World Bank made them adopt Chicago school policies in order to get loans. It was the economics that was going to come into its fullest flower in post-Saddam Iraq.

It came to completely dominate all economic thinking in the US. It came to dominate our public and political dialogue, almost to the exclusion of all other approaches.

Free markets became a trinity with patriotism and religion. Generally, where you find fundamentalist Christianity, you will find equally fervent beliefs in country and capitalism, with the same sort of excesses.

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Re: Capitalism 104 Zipsfb: Too bad none of us have ever really experienced a true "free market" so have no basis to speculate with any sort of validity as to whether or not it would hold up in reality...