I’m scratching my head over a libertarian-bashing post by PZ Myers. The current political environment in the U.S. is so strange to me: when I think about the recently health-care reform, I mostly think about how no one opposed publicly funded education and how Europeans and Canadians seem pretty happy with their system, even if I understand that there are theoretical arguments for mostly just having a negative income tax to help the poor.
On the other hand, it’s become expected that if you like the health care reform, then you ought to be the sort of person who can at least smile and nod when someone talks about how capitalism is evil. This is a mindset I can sort of understand; I used to sympathize with it. Then I learned about basic economics, and entered high school shortly thereafter. (This does not stop me from regularly telling Ayn Rand’s fans that I find her unreadable).
In the case of PZ’s post, the weirdest part is this paragraph:
The alternative to regulation of basic services by the government is privatizing them and giving more power to corporations — whose goal is to increase profits. Personally, I like to see the Invisible Hand shackled and restricted to doing useful work, rather than picking pockets.
The first bit is gibberish: privatization isn’t a an alternative to regulation, because private enterprise can be regulated. Does PZ want “basic services” to be private but regulated, or does he want them to be government run? I suspect he means the latter but wants to give the impression he’s only talking about the former, hence the incoherence.
Then we get an announcement that corporations are trying to make money, as if this is supposed to surprise us and make us realize that corporations are evil. This is of course nonsense. We all benefit constantly from people trying to make a buck off of us: I got up this morning (in a room in a house I’m renting from a guy who wants my money) and put on clothes (that I bought at capitalist clothing stores that were trying to make a buck) and read a book (bought from the corporation Amazon.com and written by a guy trying to make money) and then went down stairs to eat my lunch (food purchased at a grocery store trying to make a buck) and am now typing this blog post on my laptop (made by the capitalist Toshiba corporation). Tonight I plan on going out to a bar (whose owner is trying to make a buck of people like me) and perhaps meet a girl who will ask me how I keep my hair in such good condition, which will prompt me to say “with the cheapest stuff I can find” (cheapest, because some corporation wants me to give my money to them rather than to the guys with the next-most-expensive brand).
Also contra PZ, I’ve never heard of corporations organizing teams of pickpockets. Or burglars for that matter. Bad behavior by capitalists tends to top out at giving consumers something not as advertised, but I doubt PZ is trying to make an anti-anarchist point about the importance of having government for fraud protection. He pays lip service to Adam Smith, but doesn’t seem to get that in non-fraudulent free market exchanges, what ensures that some good comes out of the exchange is not shackles, but the fact that people can pass on deals that they don’t believe they will benefit from. They can even walk away from deals that would benefit them, if they think they could get a better deal elsewhere (this is much of the reason why Amazon.com, the sale I got my laptop at, and cheap generic hair products all exist).
Sure, it’s possible to get carried away in marketing hype, or impulse buy crap you don’t need. But the number of times that’s happened to me is far smaller than the number of times my life has been made easier because someone was trying to make money providing the most attractive product at the best price. Broader experience shows that this system tends to bring cheap and readily available goods, while command economies suffer from chronic shortages.
The essence of the weirdness of PZ’s post is that he both demonizes private industry while avoiding saying the government should take over even “basic services,” that he both implies profit is evil and goes through the motions of endorsing the “invisible hand.” This is the paradox of the rhetoric about capitalism that’s fashionable in self-identified “liberal” circles: it tends to amount to simultaneous insistence that capitalism is evil and that the speaker understands the merits of capitalism. This is never done Churchhill-esque ironic way.
So, underneath all the rhetoric, how many of the people spouting it really think socialism is a good idea?
Ahh… thanks for this. Sometimes it’s hard to remember after one of PZ’s anti-libertarian posts that there are people who really do get economics, and don’t turn it into a political issue.
I am glad to hear that you are such a rational individual Chris, but unfortunately the market doesn’t always work the way that economic theory says it should. We have an obesity epidemic because people make bad choices and corporations have an economic incentive to encourage and exploit those bad choices.
If corporations can make money by providing better products at a better price they will do so. If they can do it by exploiting ignorance and weakness, they will do that to. Capitalism is not evil. It is amoral.
The model in much of the financial services industry is exploitation of ignorance and weakness. The credit card companies make nothing on most of the cards they issue, but they clean up when they can jack up rates and fees on the people who handle credit badly. The banks make nothing on most checking accounts, but they clean up on fees for overdrafts that are allowed for the “convenience” of the customer.
Markets are very handy things for allocating resources, but they are absolutely terrible at planning. The economy is where it is today as a result of blind faith in free markets.
I get what you’re saying about the excesses of capitalism being mostly benign in today’s marketplace, but this is an illusion much like Christianity’s mildness next to radical Islam’s fanaticism. The only reason capitalism seems safe is that the government has pulled it’s teeth, just as secularism has neutered Christianity.
Remember, that the slave trade was one of the first ventures of modern capitalism, that the company store was a perfectly rational economic decision (from the POV of the mine owner), and the Pinkertons were perfectly willing to kill strikers to make an example. The reason our children don’t work 12 hour shifts at machine called The Mangler isn’t the profit motive or the invisible hand, it’s because the government step in and forced the companies to stop. The reason our food is safe and our drugs are something besides a mélange of heroin and mercury is socialized style government regulation.
Now capitalism is great and a necessary part of a successful society, but it can’t be the only part.
Duke
Vinny: Do you support laws to prevent people from eating unhealthy food? It’s harder to find a better example of people failing to act in their self-interest than that, but even then it’s not clear how more government would solve the problem. Also, you claim markets are terrible at planning, but is there a shred of evidence that government attempts to plan the economy work? From what I’ve seen, government attempts to run the economy tend to do a poor job of adjusting to present circumstances, much less planning for the future.
Duke of York: the “excesses of capitalism” you talk about are pretty well covered by laws against slavery, murder, and fraud (fraud is what calling heroin penicillin would be). I’m pretty sure this is not what the argument between self-described socialist PZ and libertarians is not about these issues.
The analogy between capitalism and religions is inapt, because religions like Christianity and Islam have fairly well-defined bodies of doctrine, creating a situation where it does make sense to look at what happened when those doctrines were taken seriously. But it’s impossible to see slavery as an outcome of some “capitalist doctrine,” and in any case the economic theory of markets is premised on voluntary exchange, which is destroyed by force and fraud.
I think that laws which discourage the consumption of unhealthy food would be a good idea. I like the idea of requiring prominent disclosure of nutritional information in fast food restaurants. I wouldn’t see anything wrong with taxing fast food. I wonder whether our trademark and copyright laws aren’t broader than they need to be to protect legitimate business interests thereby allowing corporations like McDonald’s to build levels of brand consciousness that serve no societal good.
I think that we should let markets do what markets do best, but I don’t think markets do a very good job of deciding who should have access to quality healthcare or who should have access to a good education. They also do a very poor job of protecting the environment.
I think the Chinese government has a lot of influence in its economy. Germany and Japan both have more active governments.
Vinny’s point on capitalism being amoral is spot on.
As to socialism, for it to work, you’d have to have better people first. There would have to be a rejection not necessarily of capitalism but of the supposed morality of capitalism. Material “success” cannot be the way we judge a person’s life.
I don’t think America can get there, however, the cultural hegemony of capitalism (and therefore of each individual focusing his life on what he can get) as “good” has won out. Eventually, we will spend ourselves to death leading to an upheaval. Who knows whether what comes next will be better or worse. Perhaps we’ll change our focus on becoming better human beings or perhaps we’ll just become bitter.