Free Market Capitalism is an Economy Driven by the 99%

From AgainstCronyCapitalism:

I’ve watched the Occupy movement with quite a lot of interest. I hung out for a day in October at McPherson Square with the Occupy DC folks. I was even on NPR for two seconds as they identified me as someone who was sympathetic to the TEA Party and also interested in what OWS had to say.

I was at CPAC and literally right next to Andrew Breitbart (coincidentally—we weren’t hanging out) as he traded words with Occupy.

Later that night I took part in the impromptu “beer summit” at CPAC where TEA Partiers basically bought drinks for a group of Occupy people and we traded ideas civilly.

I’ve read plenty of Marx, and Chomsky. My favorite class in college was a seminar I took on revolution.

The point is I have a decent sense of where Occupy is coming from and though I don’t agree with much that I hear from Occupy, I respect the noise. It is good for the Republic to have people yelling at the top of their lungs.

But there is one vital point that Occupy does not get. Markets and free market capitalism are the best things that ever happened for the “99%.”

 

That is a ridiculous statement Nick! How can you possibly say that? Look around. There is poverty everywhere. Kids graduating from college are saddled with horrible debt. Look at the wars and the war profiteering! Look at Wal-Mart and its exploitation of its workers!

Thing is, if one looks closely, it is the hand of the state that is behind these perceived injustices not the invisible one.

The poverty one sees in the United States is perpetuated by a highly inefficient welfare system.

People fall on hard times. Some people just cannot care for themselves and those people must not be tossed into the cold, like they were before the industrial revolution. Society recognizes the collective responsibility it has for this relatively small sliver of the population. American society always has, and did so long before the advent of the welfare state. Churches and civic organizations used to handle such problems. Imagine if we actually let them solve such problems today without an intrusive state? The country would be far better off.

The co-founder of this website, Hunter Lewis, has actually written a book on how society can deal with many of its challenges through charitable organizations entitled Are the Rich Necessary? Someone should put a copy in the Occupy community library.

Students are indeed saddled with horrible debt. This student still has some to pay off and I graduated over 10 years ago. Trust me I can relate to the students who are graduating these days with the equivalent of a mortgage to pay back, before they can even think about a mortgage. That kind of puts a damper on working life.

But it’s not the market that is to blame for this situation. In an effort to turn college into an American right the federal government has poured massive amounts of subsidies into the system, which colleges adjusted tuitions for, thereby increasing the cost of a college education. It’s simple supply and demand.

Huge amounts of federal money were sent to colleges through federal student loans and other vehicles and surprise, surprise the price of a college education lurched skyward. It used to be that people really could work their way through college and emerge free and clear. Now one must take out loans because the government has inflated the cost of education. This bubble is bursting, however, thankfully.

As for the wars and war profiteering, these things do not exist without a massive federal government. When contractors and manufacturers make money on war, when politicians can use war as a jobs program, war happens.

Additionally it is very hard to wage 10-year wars with a currency that can’t be debased by the Federal Reserve. If for instance the dollar was backed by gold, the limited nature of gold would have restricted our “efforts” overseas. The government would have had to come to the people to ask for permission to continue the wars, because in a hard money regime (the dollar backed by gold or a basket of metals and/or commodities) taxes would have to be raised to continue the fight. Afghanistan would have ended five years ago if the taxpayer actually felt that he or she had to pay for the war instead of financing it with a credit card to be paid off by future generations.

As for Wal-Mart, I am no particular fan. But I will say that Wal-Mart has helped many people gain access to goods that make their lives better. And Wal-Mart workers can afford to shop in the store in which they work.

What I have found is that over and over the social ills that government tries to solve almost always end up expanding the problem that was to be addressed. The War on Poverty worked pretty well, and the War on Drugs, and the War on Terror. All of these “wars” are shining successes!

War is perpetuated by the state and each war needs fodder. The 99% provides the fodder.

In a truly free market however, where money is not destroyed and manipulated by central banks, and where innovators and entrepreneurs are allowed to solve problems without jumping through hoop after hoop, the 99% are who is in charge, not the state.

The “people” can simply vote with their wallets. In a free market the average person is empowered because he or she can simply opt out or support alternative solutions to problems. In a free market a boycott works. In a society run by the government one can boycott a company all one likes, but so long as that company has the right friends in government that company will survive.

Sure Nick, but what if we simply abolish the private ownership of companies? That’ll make things right. That’ll make the “people” the owners.

Yes, it’ll make the people the owners of a nonproductive entity. Then the people will starve because whether one wants to admit it or not the profit motive and markets are as natural as gravity. Markets are how nature deals with inequality and want. This was as true in the Soviet Union as it is in the United States. One can either learn the Tao (way) of markets or spend a lifetime (and the lives of others) fighting it. Go with the flow and people will flourish. There will be inequality as markets emerge and then go away, but thankfully markets come and go. The state instead crushes this dynamism.

If one is miserable, and indeed believes things are always going to be miserable, it makes sense to expand the state. If, however, one has any sense of optimism for oneself and one’s fellow humankind allowing markets to grow and die is the only way to go. It is also the only “sustainable” way for a society to exist. The constant expansion of credit by government encourages the trashing of the planet (for all you enviros out there).

Many people subscribe to the false belief (in my view) that the government is the people, that it should be composed of the 99% and that the government should then be used to rein in the evil 1%. So long as Occupy believes this, and I am of course speaking broadly, it will only make matters worse.

A free market economy is an economy run by the 99%. Just ask Jeffery Imelt the CEO of GE and good friend to the Obama administration if he personally would be better or worse off in a free market. Ask him if a free market gives more power to his customers to force changes in his company.

The answer is that he would be far worse off and that the products his company makes would be far more responsive to the desires of the 99%.

The question really is: Does Occupy honestly want the 99% running things? If so it should embrace free market capitalism.

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