I am frustrated that we have largely allowed those that don’t believe in capitalism to claim their beliefs are capitalist. I believe capitalism is the best system to provide economic gain to human society. When we allow non-capitalist to claim their ideas are capitalist we often lose by allowing bad policies to be adopted and failing to adopt more capitalist ideas.
Robber barons and their ilk are not capitalists. Those attacked today as capitalists are much more like European nobility that fought to let the nobility take most of the economic profit from everyone else.
Capitalism is a wonderful thing.
The foolish economic policies the politicians we have elected over and over again for decades are idiotic and not capitalist (they are somewhat capitalist but the things people are complaining about are not capitalism but the corruption of the system by those subverting capitalism). They are the result of favoring cronyism and bribery over capitalist regulated markets.
What we need to do is not throw out the capitalists. We need to actually throw out those that say their cronyistic policies are capitalist.
Capitalism is an economic system designed to achieve economic gain for a society. Adam Smith (and others) understood that if those with power to destroy the functioning of markets (for personal gain) were allowed to do so then the benefits capitalism can produce are reduced. And they definitely would try to (according to the believes fundamental to the capitalist model) so a capitalist system has to account for that.
“Free” markets are good. But in capitalism “free” markets means markets where no entity has “market” power – that is the ability to move the market. This is the idea of perfect competition. In the real world this doesn’t happen but capitalist understand the weakness of unfree markets and that has to be dealt with. Things start to get messy here. There is no perfect way to do this and I don’t know of anyone (that I don’t think is naive) that thinks this can be done in some way that avoid economic friction (loss to the society from what is possible in some ideal state).
Now those that like cronyism and letting whoever has the clout do whatever they want have tried to say capitalism means doing whatever you want to get as much capital as you want. It doesn’t. Capitalism isn’t about letting whoever has the gold get more. It is an economic system to provide gain to society by setting up rules that result in market forces brining benefit to society.
Those thinking about setting up the rules for a capitalist system understood that many people are going to try and get away with taking what isn’t theirs. So you have to enforce the rule of law. You have to prevent those that seek to destroy markets and take personal gains they should not be able to (due to being allowed to collude with other market players, collude with politicians to gain political concessions that destroy market functions…).
I happen to believe capitalism is the best economic system we have by far.
I happen to believe those that have increasingly turned out system into one where croynism is destroying markets to give gains to a few parties dominates are creating great damage. But the problem is not that these people show capitalism is bad. Instead these people show the dangers of not putting in the effort to retain capitalist ideas: your economy suffers and people suffer.
There can be debates about many aspects of how you best allow markets to function. But we have largely allowed those that don’t believe in capitalism to claim that their desire to setup rules that benefit a few connected players is capitalist. It isn’t.
For those that just say capitalism is bad I am not sure what they advocate (I know they will advocate many different things). Capitalism, to me, is a current best engineering solution for how to arrange an economic system for people. If we find something better, I am fine switching. There are some capitalists who think it is more like a religion – that Capitalsim is the end, Capitalism is what is good. I don’t believe that. I believe that the capitalism engineered solutions we have now have been corrupted greatly by those seeking to benefit small numbers of people for their own gain (plain and simple corruption with a health dose of ignorance to help them justify their actions and maybe simple stupidity also, it is hard to know how much is intellectual lameness and how much is corruption).
There is also an attempt to call a political idea capitalist; which is basically that government is evil. This also creates problems as you have people advocating what they call “capitalism” but it is actually just their political dislike of government. That political position is fine to argue just don’t equate that position with capitalism. It is true that capitalism believes in using market forces instead of government central planning for the economy but the anti-government arguments are mostly about non-capitalism issues.
My belief is, society will benefit if we stop allowing those seeking to destroy markets so they get personal gains. And if we seek to make the economic system more capitalist instead of the cronyist system we are moving toward.
We never had some great capitalist system – the “golden age.” I do think in the last 25 years we have become less capitalist and more cronyist. And have come to think of capitalism as something it isn’t – the political idea of government is bad.
From here we can advocate for different economic policies and aims. I believe we will be best served by moving away from cronyism and toward capitalism. Others what to move in another direction. There are those that want to become more cronyist (they are winning). There are those that just want to punish those that are winning at the cronyist game. While I also dislike that our system is rewarding those people I don’t think the aim should be to punish them. The aim should be to design a better system and let the gains go to those that create solutions that the market rewards: remove the distortions that allow cronyists to profit by their trampling on markets (avoiding competition).
The problem I have will those attacking the current system as capitalist is that in doing so the solutions that will follow are likely to reduce economic prosperity for the society. I agree with those that are frustrated with the current system favoring cronyism. I think society will benefit by trying to be more capitalist. If cronyist succeed in claiming what they offer is capitalist that takes away the best solution to the problem – which is to move toward capitalism. Then we are left with trying to find what non-capitalist solution beats the current somewhat capitalist and increasingly cronyist solution. Which is a mistake, I think. That is the choice it is a lose lose option, I think (unless someone has some new economic system that performs better than capitalism that I am ignorant of).
Imagine if people equated Microsoft in 1995 as “technology companies.” The behavior that Microsoft engaged in that was bad was not a problem with “technology companies.” Those were problems of Microsoft. I don’t think we should have gone in some anti-technology-company direction. We needed to address the issues with Microsoft. Today we need to address the cronyism problem.
This post is already too long, but what I call the “cronyism problem” does over-simplify reality tremendously.
This post puts together 2 of my posts on Reddit, see the discussion on Reddit.