Some questions that the Capitalism FAQ does not cover - -- f

[Guest]

I have noticed that this board has had a few objectivists and laissez-faire activists as new members. Let me ask you some questions:

How will a laissez-faire system benefit you? If not, why do you advocate such a system? Obviously not for the good of the people since you are all individualists, correct?

What to do with greedy monopolies which acheived their status "fairly" (without government assisnatce)? I have read the Capitalism FAQ, it seems to imply that the only bad monopolies are the ones that get the government to eliminate competition.

Do you consider a man born into poverty having the same chance to make it to wealth as a man born into wealth? If not, why should the government not offer any assistance?

Do you believe in democracy? Democracy is government by the people, wouldn't you consider it more civilized if people have a government which they control, which therefore helps them out? Capitalism seems more of an anarchistic plutocracy.

Explain to me again, how laissez-faire capitalism is the only way to solve the problem of massive poverty (I've read it in the FAQ, seems a bit foolish to me).

Cheers

[Ernest Everhard]

Something I posted under my old name in this thread

http://www.che-lives.com/cgi/community/top...ic=210&start=10 (http://www.che-lives.com/cgi/community/topic.pl?forum=22&topic=210&start=10)


Quote: from AgustoSandino on 10:16 pm on Mar. 27, 2002
Although this argument was put forth, in a far more
eloquent fashion, by John Locke, Adam Smith and John
Stuart Mill, I suppose I'll have to recount about 350
years of Western tradition to you.

Capitalism is often taken to be synonimous to the
intangible institution we call the Free-market, yet to
define capitalism as the Free-market would be simple
minded. Unlike the free-market which is an ammoral
force (for the high schoolers among us that means, not
that its bad, but beyond the realm of "good" or
"bad"), capitalism, as envisioned by Smith, Bentham
and Mill, and as put forth by people from J.M. Keynes
to Deng Xaioping(somewhat) and Allen Greenspan, is
indeed a moral philosophy that stands at the
foundation of western liberalism.
Smith's capitalism is often encapsulated by the
phrase "laissez faire", yet the "leaving alone" of the
private sector is hardly what Smith prescribed in
Wealth of Nations. Rather than focusing his attention
on the wealth of the individual, Smith examines the
COMMONWEAL of society and its maximization. He comes to the conclusion that the maximization of society's welfare is achieved by the unfettered free enterprise of individuals in that society.
Yet unfettered does not transalate into anarchic.
Smith does not propose that de jure government
regulation be replaced by de facto corporate monopoly.
Unfettered free enterprise as smith conceives is a
result of competition. This is a very Lockian notion,
smith does not belief that unfettered capitalism is a
"natural state" in which wealthier individuals are
allowed to infringe on the freedoms of poorer
individuals.
Rather smith's capitalism is founded on the notion
that the Lockian process of exchanging FREEDOM for
LIBERTY (if you don't know the distinction I'm not
going over it know, you have to read the 2nd treatise
of government) has already taken place. Just as Locke
believed that liberty was characterized by the ability
to "disposse of your person and properties as you see
fit", Smith believes that capitalism should includes
the maintenance of this liberty. It is for this end
that Smith, like Locke, envisions the role of
government.
Capitalism then is not an anarchic state, by
unfettered free enterprise smith does not imply the
eventual victory of the wealthy, rather he explicitly
calls for the maintenance of competition. In present
day capitalist society this maintenance of competition
includes and is inextricable from civil liberties,
contracts and fair, efficient judiciaries to enforce
those contracts, fair and efficient property law, and
democracy- by which I mean representative democracy
with a system of check’s and balances.
Beyond these basic institutions which are inalienable
from capitalism, there are other faculties which the
state may exercise to maintain competition and social
mobility. Things which you may deem socialistic
(despite the fact that maintaining social mobility is
inherently unsocialistic as there are no classes in
socialism, right?), such as public education, labor
laws, minimum wages and even health care can be
reconciled with the governments responsibility to
maintain competition, or in a broader sense, to
maintain the individuals liberty to “dispose of their
person and possession as they see fit.” Many of these
supplementary functions of the state were outlined by
a man who many hail as the intellectual father of
libertarianism, J.S. Mill.
Beyond the pragmatic grounds for capitalism laid down by Locke, and beyond the benefits of capitalism
described by smith, there is the ethical argument for
capitalism as put forth by Mills. Like Smith (and
coincidentaly marx), Mill is ultimately concerned with
maximizing the welfare of society and not the
individual (funny how all these capitalists are
concerned with maximizing society’s welfare, makes you
think). He concludes that the best way to maximize
society’s welfare is not to handle society as a whole,
in the abstract, as Marx does, but to maximize each
individuals welfare. Furthermore Mill recognizes
something which hopefully no one here will challenge,
and that is that the individual knows what is best for
him/herself, so only the individual can determine
his/her wants, and here’s the big one, only the
individual can determine his/her needs. Therefore
Mill, in my rough version of his conclusion,
determines that there is no contradiction in the
apparently contradictory notion that maximizing the
individuals happiness and welfare will correspondingly
maximize society’s happiness and welfare.
To this end one must recognize that, just as you say
that communism has never existed before, a similar if
not more compelling case can be made that capitalism
only exists in certain parts of the world, notably the
West (defined as western europe and N. America) and
Japan. If capitalism is characterized by institutions
such as fair and efficient judiciaries then how can
africa or the third world in general have capitalism?
Even more revealing is the fact that capitalism is
defined by most modern capitalist thinkers as
including five basic freedoms:
1)the freedom of movement of labor
2)the freedom of movement of capital
3)the freedom of movement of information
4)the freedom of movement of technology
5)the freedom of movement of goods
How many third world nations have these freedoms? It
is irrational to say that capitalism and its boogeymen
are ruining the world, and particularly the third
world, when most of the third world suffers from a
dearth of foreign investment. Saying for instance
that capitalism is ruining africa is like saying that
the martians are ruining earth. Just as martians are
not active here on earth (unless you are privy to some
info to which I am not) capitalists are not active in
africa.
To this you will no doubt reply that I am simply
wrong, not only is capitalism active in africa, but it
is necessary in order for capitalism to survive that
africa and the rest of the third world remain as it
is. Well despite the facts which I’ve just presented
that, capitalists are hardly active in the third
world, let us present yet another argument. That is
that capitalism needs to be introduced at a faster
rate to the third world.
You will say that capitalism is built on the
exploitation of the working classes, “amerikkka’s”
wealth, you will say is a derivative of america’s
exploitation and that capitalism is inherently
exploitative. Yet you’d have an impossible struggle
ahead of you if you decided to scour history for any
other notion that has been so liberalizing.
Capitalism was neither based on slavery
or imperialism. The West did not invent slavery, every
other culture on this planet, every single one, has
had slavery. Similarly the west did not invent
colonialism or imperialism. The turks colonized the
arabs, the arabs likewise colonized the africans. The
zulu africans did so to the other sub saharan
africans, the chinese did so to the mongols, and the
mongols to the rest of the world. India the crown
jewel of the british empire was colonized four times
before the british got there. Every other culture had
slavery and imperialism, and you know what they didn’t
question the morality of these institutions. The first culture that questioned the morality of slavery was western civilization, and it did so as ideas like Locke’s, Smith’s and Mill’s became more popular. Western civilization was the first and only civilization in which a group of people who had every “legal” right to become slave owners not only decided that they didn’t want to be slave owners, but decided that they didn’t even want the right to be slave owners. The foundations of this notion arise from capitalism and the maximization of,
not rate of profits (anyone who’s read any serious
marx, like grundrisse, knows that marx believed that
capitalists were concerned with maximizing rate of
profits) but the maximization of total profits. That
the maximization of total profits can be found in the
abolishment of slavery and empire was recognized by
smith as early as 1776, and was used in his
justification for capitalism.
Let us take for instance the American civil war.
Popular belief holds that this war was fought to “free
the slaves”, but such an interpretation as most of you
marxists know is far too simple. Rather the war had
many economic causes, not least among them was the
northern industrial class (worker and owner) and their
interest in the abolition of slavery and the cheap
source of labor it provided for the southern
plantation owning class. The abolition of slavery desired by capitalists because it increased competition, northern republican industrialists were in favor of emancipation.
So imperialism and slavery are not notions that were
developed by capitalists, but it is the capitalists
that are doing away with these notions. But just who
are the capitalists. Many here hold to the notion
that the world is composed of two classes and never
the twain shall meet, but things are a lot more
complicated then that. The classes in a capitalists
system are not static, there is upward mobility and
downward mobility, being a first generation immigrant
I know this. Certainly capitalism has a rich and a
poor, there is no denying that, but within the
capitalist ethic there is no notion of material
entitlement. You are entitled by the capitalist ethic
to have liberty and a fair shot at success (the
institutions that I’ve mentioned above are intended
for this, but there are also more improvements that
are necessary even in the US) but you are not entitled
to have your needs met, that is something you have to
provide for yourself.
The notion of “from each according to their ability to
each according to their need is roundly rejected by
capitalist ethic, and why not, it is inherently
totalitarian. As Mill said, the only person who can
determine need is the individual, not the state, not
society and definitely not an economic system of
distribution as Marx proposes in the phrase above.
If this need is defined by the individual to be solely
material and beyond subsistance levels then that is
the individuals perogative. People in these forums
are always denouncing materialism as an evil that is
overwhelmingly american. Yet it is hypocritical to
lambast materialism as you type away on your keyboards in a web board that is obviously geared to a niche demographic within the market. What you guys have to realize is that, to paraphrase PJ o’rourke, the
average chiang, mobutu and juan want two or three
color tv’s, they want a jeep grand cherokee, they want
comfy reeboks and may god have mercy on the soul that stands in their way.
So capitalism, as a system founded on personal responsibility and private enterprise is ethical because it is the best way to maximize SOCIETY"S commomwealth.





If you were too lazy to read it can be summed up by statement that the commonwealth is benefited when the individual's welfare is benefited.

Point by point over your questions. I believe the first question was answered above, the welfare of the whole can only be maintained if the welfare of individuals is provided for, I support capitalism for the 'good of the people'.

question2
Certain industries beget natural monopolies, for example basic utilities like power, water, and phone companies .

question3
It would be a downright lie if I told you I believed one born to poverty had the same chance of success as one born to wealth. Obviously for every Horatio Alger story of hardwork paying off there are many people who work hard and don't get to buy a bmw and three storey home. Yet the communist outlook see's this disparity in wealth as problem to be remedied not by expanding opportunity for the poor man to be wealthier (i.e. free trade and market liberalizations) but by eliminating all wealth that could possibly be had (from asinine suggestions like eliminating currency, to frightening suggestions like collectivization,etc)

question 4
Do YOU believe in democracy? 'The people" have roundly rejected communism. Moreover while I can't help but believe in Democracy (it exists doesn't it?) I hold and the spirit of American Democracy holds certain beliefs above the 'will' of the people. This belief is the 'rule of law'. Constitutionalism trumps democracy in any case and is, when properly used, the most accurate and wisest demonstration of the democratic will.

question 5
for the sake of brevity...Think of a nation like the US as a massive free trade zone (believe it or not people argued against having this at one point). Internally the US, as a geographic entity is the worlds second largest, but richest, free trade zone. Within it its people enjoy unparralleled levels of wealth. All free trade does is export the liberties and privelages which americans have now adopted as rights to the rest of the world. The spirit of Free trade is one that believes all people's of the world should enjoy the same legal rights to their labor that people in the capitalist first world do. This will not eliminate poverty altogether, there is no utopian character to capitalism as there is to communism, but it will benefit both parties involved, first and third world.

[dailydivet]

Wow, I'm am very surprised that someone read that FAQ that wasn't a "cappie". I admire your willingness to do that, and feel like I wasn't wasting time when I read Communist Manifesto, now that I know people do check in on their enemies ;).

(Note: the answers to the following questions are assuming a Laissez-faire system, NOT a mixed economy like the U.S. has now)

"How will a laissez-faire system benefit you? If not, why do you advocate such a system? Obviously not for the good of the people since you are all individualists, correct?"


I am a very smart student, with enough intelligence to make it to a profession of medicine, physics, or law (I haven't decided). I look forward to the day when I will be able to choose my occupation and make enough wealth to start a nice family (or not) and have a nice home.

BTW, about "public good". Although I don't do things for the public good at the EXPENSE of myself (giving all my clothes to shelters) I do enjoy doing things for the "public good" when it also benefits me (if I were to invent something, it would be for the betterment of mankind and my paycheck; I also enjoy working for money, someone receives a burger, I receive a paycheck). Something is only for the "public good" if it is good for each and every member of the public (not counting criminals); since the smallest minority that ever existed is the individual.

"What to do with greedy monopolies which acheived their status "fairly" (without government assisnatce)"

See how much altruism has affected our world? People are so rooted in altruism that they ask "what" to be done instead of the question that should be asked first "should" something be done. And the answer to "Should anything be done about monopolies who reached their status fairly?" No. They obviously had the best product. Of course not many monopolies last for long. In the 70's NO ONE would have expected the demise of K-Mart, but it filed for bankruptcy a few months ago. 'Tis the mystery of the dynamic world of ideas and wealth. You have to constantly be the best to be on top.

"Do you consider a man born into poverty having the same chance to make it to wealth as a man born into wealth?"

Yes and no. Wealth comes from the mind, and the mind is not dependent on previous wealth. I'm growing up, not quite in the "slums" but with a single parent living in an apartment that is dwarfed by many of my peers' homes. Yet I'm still the top of my class. I know that I'm smart enough to go to college, get a job, and create wealth. Obviously someone who was born into wealth and who could have better schooling than I would have a better chance at college, but colleges go out of their way to provide funds for poorer families. I support colleges who help out because there is nothing wrong with charity, as long as it is private and not forced by the govt.

The no part is: no one is guaranteed success. I am guaranteed the right to own property if I've earned it and paid for it, but I'm not born with the "right" to propety somewhere. I am guaranteed to strive for success, and if I use my mind and my resources I will achieve it, but it doesn't say anywhere that I WILL achieve it. Humans, although not born with equal talents, abilities, families, handicaps, etc., will still be governed by the same laws.


"Do you believe in democracy?"

Yes and no. Pure democracy is a form of collectivism, where the majority (51%) can violate the rights of the minority (49%); this is not supported in Laissez-faire capitalism. Democracy should be allowed to the extent that it doesn't violate anyones' rights.

"Explain to me again, how laissez-faire capitalism is the only way to solve the problem of massive poverty."

I'm still researching and reading about this one as well, but what it says in the FAQ is pretty straightforward. Obviously, giving a man freedom will not make him wealthy overnight, and even giving a man freedom will not secure his wealth; freedom only guarantees that you will have the right to try and produce your own wealth. Observe the main areas of mass poverty in the world and what created them? Government restrictions, regulations, and infringements on man's rights cause poverty, not a corporation who opens it's doors to workers. Of course bringing a corporation to every poor country is also not the answer, there needs to be gradual change. Why gradual change? Because in Capitalism, labor is worth nothing if there is no demand for it. Unlike Communism, just because I am a laborer does not mean I have a right to wealth. There needs to be a need for my labor for me to create wealth. Just like a man who invents invisible clothing cannot demand wealth for his labors; he must recognize there is no demand, no need, for his product. Hence, gradual change is the only way to revive the poor. And they will only be revived if they want to.

To show an extreme example, I'm sure that the kids working in sweat shops are less poor than those kids in the same circumstances who decide not to work. It may be tough to live otherwise, but no one forces you to work.

I will continue reading in the hopes of becoming a better advocate of Laissez-faire and Objectivism, and would encourage any one who is interested to pick up a copy of Ayn Rand's "The Virtue of Selfishness" at a library.

(Edited by dailydivet at 11:50 pm on June 22, 2002)

[Ernest Everhard]

well i guess the responses were thorough enough for you guys.

[marxistdisciple]

"To show an extreme example, I'm sure that the kids working in sweat shops are less poor than those kids in the same circumstances who decide not to work. It may be tough to live otherwise, but no one forces you to work. "

Fear of death and poverty forces you to work. They don't really have so much of a wellfare state in those countries. The labour market sits outside the law anyway. (Or at least gets away with ignoring it)

"Should anything be done about monopolies who reached their status fairly?" No. They obviously had the best product. Of course not many monopolies last for long. In the 70's NO ONE would have expected the demise of K-Mart, but it filed for bankruptcy a few months ago. 'Tis the mystery of the dynamic world of ideas and wealth. You have to constantly be the best to be on top."

Companies go out of business when losing market share. In K-Mart's case they lost too much. Because the corparte world is ammorla, people see things like giant megers and monopolies as good for the economy. I see these things as jobs lost, and greater influence for corporations. Walmart has more influence on law and democracy than I could ever had. I state again, corporations are amoral. Capitalism only follows its own rules, cheaper and more efficient is better. Therefore, cheaper labour, less labour = more profit/cheaper goods = more market share = more of a monopoly = less pay. When you are the only company in a town you can pay people as little as you can get away with.
Small stores consistantly go out of business to larger ones, that makes business sense. Think of it socially. When small stores go, jobs are lost, there is less variety of rpoduct, and less choice for consumers, there is nothing good about these things. Oh, except = more profit. Profit is not moral, it doens't help people (except the shareholders and directors)


"I also enjoy working for money, (someone receives a burger, I receive a paycheck)."

Do you work at McDonalds? Do you think they have fair pay?

"I am a very smart student, with enough intelligence to make it to a profession of medicine, physics, or law (I haven't decided). I look forward to the day when I will be able to choose my occupation and make enough wealth to start a nice family (or not) and have a nice home."

Ahh the american dream, I wish you luck. Just don't expect too much.

"Obviously someone who was born into wealth and who could have better schooling than I would have a better chance at college, but colleges go out of their way to provide funds for poorer families."

Did you know you can buy business degrees now? Well it makes sense, business wise.

It costs about $40,000 a year to go to harvard, do you think poorer students have an equal chance of getting in? Say you are millionairre, and your son wants to go to harvard...do you think a large donation of a few million will affect the acceptance process slightly? In any case, you wouldn't need scollarships if your daddy is rich.

"s and no. Pure democracy is a form of collectivism, where the majority (51%) can violate the rights of the minority (49%); this is not supported in Laissez-faire capitalism. Democracy should be allowed to the extent that it doesn't violate anyones' rights. "

Under capitalism, a minority decide the laws for the majority. Is that somehow more fair than democracy?

"Observe the main areas of mass poverty in the world and what created them? Government restrictions, regulations, and infringements on man's rights cause poverty, not a corporation who opens it's doors to workers."

Thats a nieve view of corporate practice. Governments are happy to let corporations in. They believe it will benefit their country, but the low wages and civil rights violations are well documented. Would you accept a dollar a day over nothing? Of course you would. But if you were were making nike sneakers that sold for $100 a piece, wouldn't you be a bit angry about that? The exploitation is so obvious it is right in the companies faces. They do nothing about it, because it costs too much to check up on labour practices, and they simply pick the factories that are cheapest to produce their goods.
The problem with business is it makes people believe in money over morals (like the scandals with the recalls of those cars, gas tanks being dangerous.)
For another example, how about the case of microsoft. They contract out most of their workers to avoid paying things like benefits. It helps avoid any lawsuits too, if you employ lots of temps, they have few employment rights. It's easier to push responsiblity on someone else, that's why most clothing manufactured abroad is contracted. You don't have to watch out for labour rights, or fair rates of pay. If people break the laws - it's no longer nike's problem.