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Wednesday, October 28, 2009

Freedom Is Not a System. It's Freedom!

Small wonder that capitalism is taking a beating in the United States, when one of its chief exponents doesn't really understand it!

Earlier this month, I read online a Forbes column by Michael Maiello, entitled, "The Whole Point of Capitalism." Please note that Forbes is a bastion of conservative and capitalist thought, at least to the extent that such thought is business-friendly. So a Forbes editor such as Maiello is, in a sense, a quasi-official oracle and interpreter of capitalism. Maybe that's an overstatement, but at least we could safely conclude that he would tend to be a serious advocate of capitalism. Did I mention that the publication is Forbes, not The New Republic?

At the beginning, when Maiello mentions Michael Moore's latest cinematic attack on capitalism, I expected a rebuttal of Moore's distorted, frenzied views. But before I had finished reading the second paragraph, I was thinking to myself, Small wonder that capitalism is taking a beating in the United States, when one of its chief exponents doesn't really understand it!

Nothing in the rest of the column reassured me in the least.

Economic Isms

It may be an idealistic simplification, but communism, socialism, and fascism have a similar economic purpose: justice or fairness, in the sense of everyone having enough. No one should have too much or too little, and no one is allowed to oppress anyone in economic terms. Sometimes actual economic equality itself is the stated goal.

In any case, communism seeks this end by eliminating private property. Socialism more or less preserves private property, but redistributes wealth aggressively (after it is produced), so that the "haves" support the "have-nots." If socialism is a post-production phenomenon, seizing and redistributing what comes out of the pipeline, then one species of fascism (with apologies to the Obama regime) takes substantial control of the pipeline itself, taking some degree of ownership, often by outright seizure, but often preserving some semblance of private ownership, while aggressively controlling key industries with massive, intrusive regulation -- for the common good, of course.

These are different means to very similar ends. But what if you're a cynic like me, who sees economic and social justice (at the political level) as more of a marketing campaign than the genuine goal of such tyranny? Even if you suspect that the real motive of such systems' architects is to elevate themselves to political and economic power, we're still talking about different means to a given end.

So what is the aim of capitalism, the "whole point," as the headline to Maiello's column puts it? Maiello is glad you asked. He says that the "collective mission" of a competitive economy is "the elimination of poverty and scarcity for all humanity." In view of this, there is a certain logic in his explanation that Adam Smith (capitalist) and Karl Marx (communist) advocated wildly divergent means to the same goal: "They used the discipline of economic philosophy to try to create systems that would one day eliminate poverty and scarcity."

We capitalists, Maiello writes, are content with unequal outcomes as long as the playing field is more or less fair -- he won't say "level." At a minimum, we insist that "the game not be actively rigged against people." But there's a problem in the United States, he says. The laws "aren't applied equally or fairly."

America has recently been missing the point. Our current system isn't eliminating scarcity and poverty; it's causing scarcity for most people and delivering extreme prosperity to a powerful minority.

After discussing big corporations and bailouts and such, Maiello concludes with this sickly-sweet cream puff of populism:

If you want a system that encourages more plucky entrepreneurs like Michael Moore [!!] then you have to do some things that the big corporations won't like. We need access to higher education that doesn't depend on crushing student loan debt. We need, as Franklin Roosevelt suggested, to look at health care as a right not a perk provided by an employer or a service to be bought and sold. We need a strong enough social safety net so that the risk of failing in an entrepreneurial venture isn't life-crushing penury. Ultimately, we need to take all the love and care that we give to big corporations and transfer that to individuals.

We approached this recession by trying to preserve what we quaintly call institutions. I confess some sympathy for the tea party protesters who see trillions spent by the government [from] which they derive no benefit. The trillions spent on bailouts and stimuli have not reached the people. It's time for the government to stop investing in institutions and to start investing in individuals. Then, capitalism can work and maybe Moore will reconsider. (emphasis and bracketed exclamation points added)

Let's set aside Maiello's unhealthy psychological need to please Michael Moore, wrench our eyes away from the printed evidence of his soft socialism, and pass by even his bizarre fantasy that economic scarcity can be eliminated, which is a larger, technical question. Let's look directly at his "capitalism."

Capitalism: A Non-Ism

Maiello's fundamental error is thinking that capitalism has a purpose at all. It does not. For this reason, it shouldn't even be grouped with the other economic isms. It is not a system. It is not imposed by a government or a society. It is economic freedom. Free individuals choose their own goals and purposes. Think about it: if a ruling class or some abstract, impersonal system (if the latter is really possible) imposes some higher purpose on my "free" economic activity, it's not really free, is it? In that case, I am a servant of something or someone, not a free agent.

Capitalism -- I really do prefer the term economic freedom -- is by far the most efficient economic means yet discovered to allow the most people to achieve the greatest prosperity. But this is its effect, not its purpose. To choose economic freedom is to choose not to have a system, not to impose a collective purpose. If it makes sense to speak of economic freedom's purpose at all, then it purpose is . . .  economic freedom.

I choose what sorts of prosperity (economic or otherwise) to pursue, and in what manner and to what degree. Others may freely choose to buy my products (tangible or otherwise) in such quantities as to make me fabulously wealthy, or they may not. I may prefer to pursue massive wealth at the expense of all other pursuits, or I may be satisfied with enough to get by, while I devote great effort to pursuing other, non-economic aims, such as art, music, scholarship, or public or religious service. I may or may not succeed, but economic freedom itself does not choose my target or judge its worthiness or impose its own measure of my success or cause me to succeed or fail. Under economic freedom, no other person or entity can make my choices or judgments for me with any binding effect.

Only an ivory-tower theoretical anarchist or the most impractical libertarian believes that economic freedom (capitalism) should be absolute in the real world. For freedom to exist at all, there must be law to protect a people and organizations from theft, murder, fraud, extortion, and other impositions on economic freedom. This is self-evident. As a result, virtually no one believes in complete, lawless economic freedom, and it does not exist in the United States or anywhere else in the world, as far as I know. No one is arguing for it these days, but economic freedom's opponents opportunistically argue against it. If our only choice were as they paint it, to be either corporate oligarchy's victims or tyranny's subjects, we would be pathetic indeed.

Obviously, we must draw a regulatory line between lawless economic anarchy and the various species of totalitarianism. Where to draw it (or redraw it) is an important topic for continual debate among economic freedom's advocates. Move in either direction from the optimal point (wherever that is), and freedom is diminished, either immediately or eventually. The long run is usually the most troublesome; there are a thousand ways to damage freedom in the long run that look in the short run like ways to enhance or protect it.

In the capitalist's world view, our present economic troubles, for example, cannot be freedom's failure as a principle. Either they are government's failure, in meddling too much or protecting too little, doing long-term damage while pursuing short-term benefit, trading political gain for economic loss; or they are -- and this is a separate question -- individuals' failure to use freedom responsibly.

Reprise: Freedom Is Not a System

Michael Maiello's musings to the contrary notwithstanding, freedom is not a system, and it does not impose any supposedly higher purpose. It is own purpose and justification; the "whole point" of freedom is freedom. We cannot promote and preserve it by mustering the force of law and arms to transfer wealth or -- pardon me while I cringe -- to transfer the love Maiello mentions, or by conjuring up new things (like medical care) that the people have a right to demand from their government.

We promote economic freedom -- capitalism, if we must use that word -- by understanding it, protecting it with judicious laws, and defending it against both malevolent and benevolent forces that would diminish or destroy it. Alas, when freedom's prominent defenders fundamentally misunderstand it to the point that they embrace its opponents' arguments and goals, freedom itself is in dire peril.

Copyright 2009 by David Rodeback.
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