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Why Is Capitalism So Unpopular?

Politics / Economic Theory Sep 07, 2009 - 02:32 PM GMT

By: Art_Carden

Politics

Best Financial Markets Analysis ArticleHenry Hazlitt once said that good ideas have to be relearned every generation. Among the intellectuals of our time, capitalism is wildly unpopular. This in spite of the fact that it is the only social system that has permitted prosperity and flourishing.


Why they continue to oppose the free market in the face of such evidence is a matter of debate. Some have argued that intellectuals dislike capitalism because they feel it doesn't offer them just rewards for their labors. Indeed, academic books do not sell particularly well, and it is easy for the dedicated scholar to feel a degree of envy when he sees "lesser" minds like John Grisham or J.K. Rowling bringing in boatloads of money for writing relatively straightforward fiction. (And that is to say nothing of professional athletes or, those most foul of professional villains, corporate CEOs.)

I think there may be a more straightforward explanation that plays a role in their dismissal of capitalism. To a "man of system," to borrow Adam Smith's terminology, capitalism just isn't that exciting. Participants in the market economy are wholly beholden to consumer wants. The academics envision a grand world, where Great Men fight Great Wars, periodically inventing Great Things or developing Great Ideas. Instead, the market provides us with incremental processes, which expend enormous piles of resources, in a quest to make better Triscuits. It is hardly the stuff of high drama, to say nothing of Great History.

Under capitalism, the common man does not need an intellectual vanguard or a group of virtuous surrogates to make his decisions for him or to defend him against the rapacity of his fellows. He can do just fine without our help, thank you very much, and would be much obliged if we would go back to our ivory towers and leave him alone.

The idea that great statesmen are not needed — to say nothing about being wanted — can no doubt be galling to many who decry capitalism for its excesses. For the people who derive their self-worth from being paternalistic, this is a sorry state of affairs indeed.

According to the do-gooders whom Adam Smith called "men of system," the average person is like a piece on a chessboard, to be arranged at the whim of a supervirtuous planner. The planner, who ignores the fact that each of the pieces has (as Smith put it) its own "principles of motion," does his best to orchestrate a game according to his own rules. Dissenters are not tolerated.

Yet people are not chess pieces, to be moved around at will. They are living, breathing, acting, thinking, rational beings with rights and dignity. Respect for their humanity rules out interventions by do-gooders, no matter what their intentions. The result of denying people their fundamental freedoms can be terrible, as the horrors of humanity's 20th-century experiments with collectivism have shown.

The systemic failure of collectivist states demonstrates to us that the problem is not just that a Great Man with a Great Vision hasn't taken control. There is in fact a fundamental knowledge problem at stake. Here is Smith again:

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.[1]

The unfettered market does not have much to offer the grand social visionary. It shows that his schemes are quite literally impossible, because he has no specific faculty which clearly demonstrates that we should trust him "to direct private people in what manner they ought to employ their capitals." In the absence of market prices or supernatural insight, our surrogate statesman has no standards by which to evaluate which patterns of capitals will most effectively satisfy human wants.

Thomas Carlyle famously called economics a "dismal science" because of economists' opposition to racism and slavery. Many mistakenly believe that it was called a "dismal science" because of the implications of Thomas Malthus's model, which said that in the presence of a fixed factor of production, human reproduction would outstrip our ability to produce food. I submit that still others view economics as a dismal science because it gives the lie to the grand schemes of the men of system.

Those who plan grand schemes are wrong when they assume that, in the absence of such plans, chaos, disorder, and misery must set in. I agree with Walter Block, who often argues that the order produced by the unfettered market economy is indeed a thing of beauty. This order is not, however, a machine to be tinkered with or fine tuned. It is an array of social relationships, which are of a literally incomprehensible complexity. And yet, when free people are left to their own devices, order emerges.

The fundamental problem with government intervention is not that our leaders lack sufficient wisdom to guide the global economy. The fundamental problem is that such wisdom is impossible. The science of human action has very clear implications about what can, in fact, be known, and it therefore places very sharp limits on the potential wisdom of the man of system. Radical schemes aiming at creating utopia are doomed to failure — or worse — and this is indeed disheartening for the critical idealist.

Yes, some might look down upon capitalism because it is at its heart about the search for a better, cheaper Triscuit rather than "nobler things." But it delivers the goods, and it does so in abundance. Interventionist alternatives do not.

Art Carden is assistant professor of economics and business at Rhodes College in Memphis, Tennessee and an adjunct fellow with the Oakland, California–based Independent Institute. He was a summer research fellow at the Ludwig von Mises Institute in 2003 and a visiting research fellow at the American Institute for Economic Research in June, 2008. His research papers can be found on his Social Science Research Network author page. He is also a regular contributor to Division of Labour and The Beacon. Send him mail. See his article archives. Comment on the blog.

An MP3 audio file of this article, read by Floy Lilley, is available for download.

Notes

[1] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Edwin Cannan ed. (London: Methuen & Co., Ltd., 1904), Book. IV.2, cited on on www.divisionoflabour.com.


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Comments

Wingnut
08 Sep 09, 07:37
Pyramid Schemes Like Capitalism

Hi

Here we go yet again, huh? Leave it to marketoracle to try to blast the "yay capitalism" propaganda up everyone's butt, regularly.

Author, you DO see the pyramid scheme symbol on the back of the USA one dollar bill, right? You DO see the servitude infestation in capitalism, right? And do you see the "pay up or lose your wellbeing" Chicago mob-like felony extortion widespread within capitalism? Do you see the "join or starve" felony extortion done to the 18 year olds... by this ugly competer's church called capitalism? See how forcing competer's religions onto 18 year olds... kills membership in the cooperator's church (Christianity/socialism)?? Do you understand that AmWay (American Way) (New World Order) got "the exclusive" (legal tender) on the TYPE of survival coupons (money) accepted in supply depots (stores) and leverages 18 year olds into the organization via that felony activity as well? (It puts AmWay-coupon slaving requirements called price tags... on all the survival goods). Do you understand how farmyard pyramids work... from your childhood?? Remember?? Upper 1/3 are "heads in the clouds" while the kids on the bottom ALWAYS GET HURT from the weight of the world's knees in their backs? Still with me? Do you see anything illegal, immoral, or just plain sick... in any of this pyramid scheme's activities?

Us American Christian socialists are still patiently awaiting the natural fall of the pyramid-o-servitude, or the busting of the free marketeers felony... by the USA Dept of Justice. Us Christians are VERY CLOSE to issuing a cease and desist order until the servitude and inequality goes away... which means it turns into a commune. Commune is a word we LOVE when used in the word "community"... but its one the caps HATE when used in the term "commune-ism". Go fig. PROGRAMMED!!

Do a Google IMAGE SEARCH for 'pyramid of capitalist' to see a full color picture made way back in 1911, when capitalism was first discovered to be a con/sham instigated by the Free Masons/Illuminati. Folks sure bought into the thing... hook, line, and sinker just the same. The caps didn't even check if a string was attached! Now THAT'S easy fishing, eh?

Time to level the felony pyramid scheme called capitalism. Abolish economies and ownershipism worldwide, and hurry. Economies just cause rat-racing, and rat-racing causes felony pyramiding. BUST IT, America! Look to the USA military supply/survival system... (and the USA public library system) for socialism and morals done right. Equal, owner-less, money-less, bill-less, timecard-less, and concerned with growth of value-criteria OTHER THAN money-value. Quit doing monetary discrimination immediately, and make it illegal. There are MANY measurement criteria of "value"... not just dollars. Try morals, efficiency, discrimination-levels, repairability, etc etc. Economies are cancerous tumors, and to cheer for their growth... is just insane. Profiting causes inflation, so if caps LIKE inflation, and if they LIKE a terrible time in afterlife when they meet the planet's ORIGINAL OWNER before caps tried to squat it all with ownershipism, then keep it up with the felony pyramiding. I dare you. While us Christians are finally bulldozing that pyramid scheme back to level, lets make servitude and "join or starve" (get a job or die) illegal in the USA, and lets level the architecture seen in USA courtrooms, too. Right now, USA courtrooms are church simulators or "fear chambers", by special design. Sick.

Isn't that back-of-the-dollar pyramid... a Columbian freemason symbol? And WHERE is the USA gov located? District of Columbia? (Not even part of the USA!). How much more blatant can ya get? The "Fed" runs a pyramid scheme called the free marketeers. If you're using the "federal reserve note" certificates, or using no-other-living-thing-on-the-planet entitles of ownership, you're bought into a servitude/slavery con/sham... called capitalism. Pyramiding 101.

Larry "Wingnut" Wendlandt

MaStars - Mothers Against Stuff That Ain't Right

(anti-capitalism-ists)

Bessemer MI USA


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