Chatting with Obama by Bill O’Reilly
I really wish people understood capitalism. Capitalism requires regulation. It was known to all the economist in Adam Smith’s time that the government must regulate or powerful forces that would not allow the free market to function as it should – which destroys the potential of capitalism. This is not some minor point, it is absolutely essential to the theory of how capitalism provides value to society.
The ignorance that equates allowing manipulation of the market by powerful forces undermining capitalism (which is supported by those that claim to support capitalism – “regulation distorting free markets”) with disrupting the free market annoys me. I know I should accept that ignorance is just rampant but sometimes I can’t get over it. I truly support capitalism and seeing it abused by so many ignorant pundits and politicians is distressing.
And when those with influence constantly reinforce ideas based on ignorance then many, that can’t think for themselves, accept idiotic ideas like “free markets” should allow oligopolies to consolidate reducing the benefits of capitalism, that polluters should be allowed to push negative externalities onto the public, that allowing trust fund babies to receive massive inheritances is good (capitalism is meant to reward those that contribute, not reward those who were related to someone useful) and that the inheritance tax is bad (it is the BEST tax that exists, arguably along with taxes on negative externalities) and on and on.
The idiotic idea that government regulation of markets is interference is equivalent to saying police interfere with freedom by enforcing laws against violent crime. Yes the watchmen must be watched. You can have bad policing and bad regulation; but the idea that policing the free market, in itself is wrong, is so ignorant we have to stop accepting such claims as if they were anything but ravings of radicals or ignorant people (or people that are both).
By the way I am using ignorant with the sense of “lacking knowledge or comprehension of the thing specified.” Sometimes the word is used to claim the other person’s opinion is wrong, which is not an accurate way to use the word. It is my opinion that those espousing crazy ideas like, free markets are those without regulation, don’t understand capitalism is based upon the idea of perfect competition. If they do, but have decided that fundamental aspect (along with negative externalities, rewards based on who your parents are instead of what you produce…) of capitalism is wrong, but they have a new theory that somehow updates capitalism I am waiting to hear about it. I am basing my guess of their ignorance on their statement seeming to be completely disconnected with capitalist theory.
If they actually understand capitalism and believe capitalism really needs to focus on creating large companies that distort the free markets because allowing huge companies to distort the market creates benefits to society that will be greater then I will disagree with their opinion. But in that case it will be that opinion I disagree with, not the spouting of ignorant ideas. Then I would disagree with the opinions they draw from their understanding of how economies work. But now most seem to think the mantra that “those with the gold make the rules” is a capitalist idea instead of understanding it is not. I don’t think the pundits or politicians have an understanding of what capitalism entails – they are truly ignorant.
Some that appose capitalism actually understand it and appose it. I think most appose what the pundits and politicians have convinced them capitalism is. I know to most this doesn’t matter. But I believe capitalism is the best chance to provide economic wealth to those around the world. And while it is easy to say wealth is not important when you are wealthy there are over a billion people that are close to starving. They can be helped if capitalism can flourish.
We already have greatly stretched capitalist theory by allow such large forces that can influence markets directly (not perfect competition or even remotely close to it). So it seems pretty obvious to me, you have to acknowledge this and acknowledge therefore regulation is even more important today. Or you have to explain how the abandoning of perfect competition still leaves free markets a viable way to achieve results for society.
Related: Copywrong – Not Understanding Capitalism – Washington Paying Out Money it Doesn’t Have – Why Pay Taxes or be Honest – Private Equity Finds Paying Politicians Cheaper Than Paying Taxes – China and the Sugar Industry Tax Consumers