Make the Moral Case for Capitalism

[Muda69]

https://www.nationalreview.com/2019/01/moral-case-for-capitalism-fight-progressive-premises/

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Progressives want to accelerate the country’s century-long shift toward socialism with a long list of policies: Medicare-for-all, “free” college, government-run energy production and prescription-drug manufacturing, federal job and housing guarantees, dramatically higher tax rates and new wealth taxes, and a $15 minimum wage.

Conservatives have opposed these socialist proposals by pointing out how much they will cost. For instance, they’ve trumpeted a Mercatus Center study estimating that Medicare-for-all would roughly double the federal budget. They have explained how high tax rates would hurt economic growth. And they’ve demonstrated how a $15 wage floor would hurt small businesses and reduce job opportunities.

These arguments are all correct. But they do not address the root of why these policy proposals are wrong. By merely citing the financial or economic challenges of implementing them, conservatives cede the moral high ground and tacitly accept the Left’s premises.

To win the battle of ideas, conservatives must fight on philosophical grounds, explaining why these policies are immoral. They must make the case based on ethics rather than economics because the latter is downstream from the former. It is only a matter of time before a purely economic or logical argument loses to a moral or emotional one.

In practice this means explaining why the fundamental principle of collectivism underlying these socialist proposals is immoral: It violates the individual rights upon which societal progress and happiness are based. Collectivism is backed by compulsion, where one side wins and the other loses, rather than voluntary trade for mutual benefit.

One of the most compelling moral arguments in favor of the free market is that it is the system most conducive to allowing people to pursue their dreams and creativity, which — for the overwhelming majority of people — manifest themselves through professional work.

In work, this creative pursuit is known as entrepreneurship. It is responsible for raising human society and living standards. Yet it is possible only to the degree that markets are free. Why? Because in order to innovate — by definition — you must be free to disagree.

Consider Medicare-for-all. The Medicare for All Act, which was supported by two-thirds of Democrats in the House of Representatives last Congress, states, “No institution may be a participating provider unless it is a public or not-for-profit institution.” This would mean that doctors and medical entrepreneurs would be required to follow the government’s medical policies and procedures. There would be no room in such a system for entrepreneurs who disagree with the status quo, meaning an end to the medical advancement that is desperately needed to lower costs and lengthen lifespans.

What about less fully socialist policies, such as a $15 minimum wage? Surely these still allow entrepreneurs to innovate? They do. But with one hand tied behind their back. Such regulations and taxes leave entrepreneurs with fewer resources, less time, and less flexibility to innovate and advance society. Think about how much Uber’s self-driving-car program has been set back by the endless taxes, regulations, and bans on its car-sharing service.

Entrepreneurship and innovation are overwhelmingly American phenomena. The rest of the world steals and copies our ideas because their people are either forbidden from or not rewarded for innovating. What’s the point of going to the Herculean effort of devising a better mousetrap if the government will forbid it or strangle it with taxes, regulations, and licenses?

Free markets that foster entrepreneurship also create a population that can earn real self-esteem (defined as confidence that you can succeed living a life of integrity), pride in trading value for value, and happiness in the Aristotelean sense of the word. Ever wonder why government bureaucrats and citizens from socialist countries seem so unhappy? It’s because the socialist economic systems in which they operate make it impossible to pursue their economic ideas, passions, and creativity.

Progressives counter by pointing to studies showing that Scandinavian countries rank as the happiest. Senator Bernie Sanders, for instance, pointed to Denmark’s top happiness scores to argue that its socialist policies should be a model for the U.S. Yet these studies conflate happiness with contentment. For instance, the World Happiness Report asks questions such as “Did you smile or laugh a lot yesterday?” and “Did you experience . . . worry,” “sadness,” or “anger?” The OECD Better Life Index that Sanders cites measures “work–life balance.”

Scandinavians may feel more content than Americans, just as marijuana users, hedonists, or inheritors of a large estate may feel more content than a 22-year-old working nights to get her business off the ground. But this contentment is different from true eudaimonic happiness, which can never be given but must be achieved through self-examination, sleep deprivation, and eyestrain. Though the entrepreneurial struggle is an unhappy period at the time, it is the source of immense pride and pleasure upon reflection. Capitalism is most conducive to such happiness because it provides the most freedom and opportunity to achieve success and fosters this American sense of life.

More broadly, progressives argue that socialist principles of the common good trump American values of individual rights and entrepreneurship. Aside from the fact that the common good has been the Trojan horse of every tyrant throughout history from Stalin to Chávez, such a collectivist focus breeds tribalism, where competing interest groups engage in group warfare to sway government policy toward their vision of the good. In this environment, where people are treated not as ends in themselves but as means to achieving the common good, politicians driven by power lust and envy emerge.

These are the new progressive leaders. The ones who want the awesome responsibility of allocating the resources produced by others. Their policies hamper not only free markets but also free minds. Conservatives must make this case if they want to preserve either.

It is a scary time for America. The progressives must not be allowed to implement their socialist agenda upon the American populace.

 

[swordfish]

[Irishman]

The concern for many, especially people living paycheck to paycheck, is that crony capitalism has replaced what is sold to us as just capitalism. The system needs to be cleaned up. I am not a fan of the income tax thing and making others pay more, but the fact is there are too many loopholes already in place for those that would be affected most. I have long supported the fair tax system to replace income tax. Term limits is something else that needs to happen as well. I still believe there are fixes that can happen. But for many young people, having more that is given to them is a more attractive thing right now, not saying feasible, but definitely more attractive to them. 

[Muda69]

Surging Wealth Inequality Is Poverty's Greatest Enemy: https://mises.org/wire/surging-wealth-inequality-povertys-greatest-enemy

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Last week cable channel HBO premiered the documentary Breslin and Hamill: Deadline Artists. Regardless of one’s politics, it’s a very interesting and entertaining look into print media's grand past, and at two of the greats (Pete Hamill and the late Jimmy Breslin) when it came to columns that gave readers the impression they were walking the streets alongside these most street-smart of writers.

Breslin in particular liked to bring his readers very close to major news stories, and did just that during the Crown Heights (Brooklyn) riots of 1991. The three days of tumult and violence took place in the aftermath of a tragic car crash in which a car driven by an Orthodox Jewish driver struck and killed a 7-year old black child while seriously injuring his cousin. Breslin, being Breslin, took a cab right into the middle of the rioting. His subsequent column referenced the impoverishment of the black Crown Heights residents who surrounded the car he was in, and how they desperately needed “money.”

“Money” is placed in quotes simply because Breslin missed the point. No one wants “money” as much as they want what money can be exchanged for. Money can’t be eaten; rather credible money can be exchanged for goods and services. What Breslin really meant is that rioters in Crown Heights citizens desired goods and services not commensurate with the dollars in their pockets.

Which brings us to a recent Washington Post opinion piece by columnist Catherine Rampell. Not surprisingly, Rampell thinks Elizabeth Warren’s wealth-tax plan is a fine idea, and that it “could correct past mistakes.” That Rampell is unwittingly arguing with herself in her desire to penalize the rich will soon become apparent, but for now it’s worth addressing a few basic falsehoods promoted by an economics columnist who lacks a feel for her specialty.  

Up front, Rampell asserts that “Over several decades, U.S. policies have facilitated a systemic upward redistribution of wealth.” Oh dear no, that’s so untrue. Wealth is a function of investment, and the capital gains tax that penalizes investment has risen from 15% earlier in the 21st century to 23.8% when we factor in the Affordable Care Act surcharge. No doubt the capital gains tax is lower than what prevailed in the slow-growth 1970s, but it’s hardly been declining modernly as Rampell's column suggests. To be fair, the tax should be zero. There are quite simply no companies and no jobs without investment first, so in a reasonably sane world no one would be charged for putting wealth to work.

So while Rampell is incorrect about the direction of policy, she also misses the why behind the wealth surge. The latter is plainly an effect of technological advances that Rampell would likely be very frustrated if forced to live without. Simply stated, the internet and other leaps that have figuratively shrunk the world have made it possible for geniuses like Jeff Bezos to meet the needs of exponentially more people around the world. Thanks to the internet, wealth wasn’t “redistributed upward” as much as it was created by brilliant minds touching more and more of the world with their unparalleled ability to serve. Assuming Rampell really wants to shrink a rising wealth gap, a gap that plainly signals a massive reduction in the lifestyle gap between the rich and poor, her columns would be most effective if she made them about abolishing the internet. 

Unaware of what she's actually proposing, Rampell naively aims to put a halo around her own head in her calls to neuter the rich. Implicit in her desire to harm a whole class of people is that in pushing down those with means, she’d like to lift those without. In calling for a forced transfer of money from the haves to the have nots, Rampell is less artfully committing the same error that Breslin did nearly 30 years ago: she presumes that “money” is what the poor need. No, the poor need what money can be exchanged for; the more the better.

Crucial here is that the rich become rich precisely because they mass produce former luxuries. In their failure to understand this truth, this is where Rampell and the wealth redistribution crowd shrink to arguing with themselves. While expressing a desire to essentially geld those who’ve created wealth, they’re unwittingly seeking to penalize those who’ve gotten rich through their transformation of scarce goods enjoyed by the few into common goods enjoyed by everyone. Goodness, in 1991 a computer that we'd all arrogantly turn our noses up to today cost $10,000, the most primitive of mobile phones retailed in the thousands such that they could generally only be found in Beverly Hills, Manhattan or the Hamptons, and then a simple 30 minute phone call (on a landline no less) from Baltimore to Washington, D.C. set the common man back $10 to $20. Rampell believes the poor want “money,” but like us all, they want things. The rich get rich by virtue of democratizing access to “things.”

Useful about the above is that today’s newly rich required investment to vivify in the literal sense their desire to democratize access to what the rich used to solely enjoy. This is where inheritors of wealth come in. Unless they’re stuffing the wealth passed on to them under mattresses, they’re investing it. Get it? For Rampell to cheer wealth taxes is for her to cheer the shrinking of the capital that’s necessary for entrepreneurs to turn ideas into real, living standard advances.

Rampell wants the poor to have more money, but money’s only useful insofar as it’s exchangeable for the goods and services that we all really want. The rich get rich by virtue of making what's dear rather cheap, thus helping the poor the most. Inequality is poverty’s greatest enemy. Rampell seeks to neuter the unequal. She’s arguing with herself. 

Agreed.

 

[Muda69]

"Progressive" Attacks on Capitalism Were Key to Hitler's Success: https://mises.org/library/progressive-attacks-capitalism-were-key-hitlers-success

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The following, written in 1940, is excerpted from Interventionism, An Economic Analysis, which was originally part of Nationaloekonomie, the German predecessor to Human Action.

Hitler, Stalin, and Mussolini constantly proclaim that they are chosen by destiny to bring salvation to this world. They claim they are the leaders of the creative youth who fight against their outlived elders. They bring from the East the new culture which is to replace the dying Western civilization. They want to give the coup de grace to liberalism and capitalism; they want to overcome immoral egoism by altruism; they plan to replace the anarchic democracy by order and organization, the society of “classes” by the total state, the market economy by socialism. Their war is not a war for territorial expansion, for loot and hegemony like the imperialistic wars of the past, but a holy crusade for a better world to live in. And they feel certain of their victory because they are convinced that they are borne by “the wave of the future.”

It is a law of nature, they say, that great historic changes cannot take place peacefully or without conflict. It would be petty and stupid, they contend, to overlook the creative quality of their work because of some unpleasantness which the great world revolution must necessarily bring with it. They maintain one should not overlook the glory of the new gospel because of ill-placed pity for Jews and Masons, Poles and Czechs, Finns and Greeks, the decadent English aristocracy and the corrupt French bourgeoisie. Such softness and such blindness for the new standards of morality prove only the decadence of the dying capitalistic pseudo-culture. The whining and crying of impotent old men, they say, is futile; it will not stop the victorious advance of youth. No one can stop the wheel of history, or turn back the clock of time.

The success of this propaganda is overwhelming. People do not consider the content of alleged new gospel; they merely understand that it is new and believe to see in this fact its justification. As women welcome a new style in clothes just to have a change, so the supposedly new style in politics and economics is welcomed. People hasten to exchange their “old” ideas for “new” ones, because they fear to appear old-fashioned and reactionary. They join the chorus decrying the shortcomings of the capitalistic civilization and speak in elated enthusiasm of the achievements of the autocrats. Nothing is today more fashionable than slandering Western civilization.

This mentality has made it easy for Hitler to gain his victories. The Czechs and the Danes capitulated without a fight. Norwegian officers handed over large sections of their country to Hitler’s army. The Dutch and the Belgians gave in after only a short resistance. The French had the audacity to celebrate the destruction of their independence as a “national revival.” It took Hitler five years to effect the Anschluss of Austria; two-and-one-half years later he was master of the European continent.

Hitler does not have a new secret weapon at his disposal. He does not owe his victory to an excellent intelligence service which informs him of the plans of his opponents. Even the much-talked-of “fifth column” was not decisive. He won because the supposed opponents were already quite sympathetic to the ideas for which he stood.

Only those who unconditionally and unrestrictedly consider the market economy as the only workable form of social cooperation are opponents of the totalitarian systems and are capable of fighting them successfully. Those who want socialism intend to bring to their country the system which Russia and Germany enjoy. To favor interventionism means to enter a road which inevitably leads to socialism.

An ideological struggle cannot be fought successfully with constant concessions to the principles of the enemy. Those who refute capitalism because it supposedly is inimical to the interest of the masses, those who proclaim “as a matter of course” that after the victory over Hitler the market economy will have to be replaced by a better system and, therefore, everything should be done now to make the government control of business as complete as possible, are actually fighting for totalitarianism. The “progressives” who today masquerade as “liberals” may rant against “fascism”; yet it is their policy that paves the way for Hitlerism.

Nothing could have been more helpful to the success of the National-Socialist (Nazi) movement than the methods used by the “progressives,” denouncing Nazism as a party serving the interests of “capital.” The German workers knew this tactic too well to be deceived by it again.

Was it not true that, since the seventies of the last century, the ostensibly pro-labor Social-Democrats had fought all the pro-labor measures of the German government vigorously, calling them “bourgeois” and injurious to the interests of the working class?

The Social-Democrats had consistently voted against the nationalization of the railroads, the municipalizationof the public utilities, labor legislation, and compulsory accident, sickness, and old-age insurance, the German social security system which was adopted later throughout the world. Then after the war [World War l] the Communists branded the German Social-Democratic party and the Social-Democratic unions as “traitors to their class.” So the German workers realized that every party wooing them called the competing parties “willing servants of capitalism,” and their allegiance to Nazism would not be shattered by such phrases.

Unless we are utterly oblivious to the facts, we must realize that the German workers are the most reliable supporters of the Hitler regime. Nazism has won them over completely by eliminating unemployment and by reducing the entrepreneurs to the status of shop managers (Betriebsfuhrer). Big business, shopkeepers, and peasants are disappointed. Labor is well satisfied and will stand by Hitler, unless the war takes a turn which would destroy their hope for a better life after the peace treaty. Only military reverses can deprive Hitler of the backing of the German workers.

The fact that the capitalists and entrepreneurs, faced with the alternative of Communism or Nazism, chose the latter, does not require any further explanation. They preferred to live as shop managers under Hitler than to be “liquidated” as “bourgeois” by Stalin. Capitalists don’t like to be killed any more than other people do.

What pernicious effects may be produced by believing that the German workers are opposed to Hitler was proved by the English tactics during the first year of the war. The government of Neville Chamberlain firmly believed that the war would be brought to an end by a revolution of the German workers. Instead of concentrating on vigorous arming and fighting, they had their planes drop leaflets over Germany telling the German workers that England was not fighting this war against them, but against their oppressor, Hitler. The English government knew very well, they said, that the German people, particularly labor, were against war and were only forced into it by their self-imposed dictator.

The workers in the Anglo-Saxon countries, too, knew that the socialist parties competing for their favor usually accused each other of favoring capitalism. Communists of all shades advance this accusation against socialists. And within the Communist groups the Trotskyites used this same argument against Stalin and his men. And vice versa. The fact that the “progressives” bring the same accusation against Nazism and Fascism will not prevent labor some day from following another gang wearing shirts of a different color.

What is wrong with Western civilization is the accepted habit of judging political parties merely by asking whether they seem new and radical enough, not by analyzing whether they are wise or unwise, or whether they are apt to achieve their aims. Not everything that exists today is reasonable; but this does not mean that everything that does not exist is sensible.

The usual terminology of political language is stupid. What is “left” and what is “right”? Why should Hitler be “right” and Stalin, his temporary friend, be “left”? Who is “reactionary” and who is “progressive”? Reaction against an unwise policy is not to be condemned. And progress towards chaos is not to be commended. Nothing should find acceptance just because it is new, radical, and fashionable. “Orthodoxy” is not an evil if the doctrine on which the “orthodox” stand is sound. Who is anti-labor, those who want to lower labor to the Russian level, or those who want for labor the capitalistic standard of the United States? Who is “nationalist,” those who want to bring their nation under the heel of the Nazis, or those who want to preserve its independence?

What would have happened to Western civilization if its peoples had always shown such liking for the “new”? Suppose they had welcomed as “the wave of the future” Attila and his Huns, the creed of Mohammed, or the Tartars? They, too, were totalitarian and had military successes to their credit which made the weak hesitate and ready to capitulate. What mankind needs today is liberation from the rule of nonsensical slogans and a return to sound reasoning.

Those who don't learn from history...........................

 

[Irishman]

Just one question...is this how capitalism is supposed to work? 

https://www.usatoday.com/story/money/2019/02/15/amazon-pays-no-2018-federal-income-tax-report-says/2886639002/ 

[DanteEstonia]

On 2/7/2019 at 12:31 PM, Muda69 said:

"Progressive" Attacks on Capitalism Were Key to Hitler's Success: https://mises.org/library/progressive-attacks-capitalism-were-key-hitlers-success

Those who don't learn from history...........................

 

...were taught by Mr. Beal.

[Muda69]

On 2/16/2019 at 10:19 AM, DanteEstonia said:

...were taught by Mr. Beal.

or by socialists like Dante Estonia.

 

On 2/16/2019 at 9:45 AM, Irishman said:

Just one question...is this how capitalism is supposed to work? 

https://www.usatoday.com/story/money/2019/02/15/amazon-pays-no-2018-federal-income-tax-report-says/2886639002/ 

Crony capitalism at work.  Reducing the size, scope, and power of government will eliminate most of this.