Whenever something significant occurs in financial markets, or even a major industrial event, people invariably start asking about whether capitalism is doomed. I remember after the BP oil spill in the gulf, one of my old highschool buddies (who’s a great guy, but his ultra-liberal ideals give us some good debating topics) put a thread on Facebook saying “Capitalism must end” or something to that effect. Since he lives in California and he’s one of those artsy types, there were all kinds of high-fives and people railing against America and how Cuba got it right and all this nonsense. I weighed in with how preposterous this notion was and how ironic that he and his hippy friends were venting on none other than…FACEBOOK – a venture that exists purely because of lure of riches that has expanded to its current state by American conventions – an American student at an American university, computer programming, at-risk capital, the internet, mobile technology and all kinds of other contributing factors that exist SOLELY BECAUSE OF CAPITALISM. The irony was lost on these people of course. By simple virtue of being born in America, they’ve already started off life on 3rd base yet they curse the opportunistic environment they find themselves in.
Well, following the recent debt debate, the S&P downgrade leaving 4 AAA Companies with a higher credit rating than the US, the recent market slides and an imploding Euro region, Nouriel Roubini penned a piece asking whether Capitalism is Doomed. While the headline and his mention of Marx being “partly right” drew plenty of controversy last week, his thesis remains pretty much aligned with his usual message – we need to deleverage, divert stimulus to infrastructure, enact more progressive taxation measures and regulate more effectively.
While progressives and “revolutionaries” rejoice at the spectre of crumbling capitalistic support, it’s silly to “blame” capitalism for problems in the world or their current circumstances. Capitalism is here to stay. It is the ONLY way to live and the only way societies will have it once they’ve had a taste. Why?
1) History – Primarily, no democratic society with imbedded capitalistic ideals has ever forsaken it. Sure, there have been coups and wars that have altered the financial models of various countries throughout history, but those were not democratically adopted ideals. Short of China coming in and wiping out our defenses and colonizing America, there’s no way Americans would forsake what made us great. Especially when…
2) The World is Flat -The romantic notion of a Utopian society whereby we can all work a little, live a lot, have everything we need all provided by the government? Well, that’s a pipe dream when there are millions of determined and educated people ready to eat your lunch. They want what you have and they will have it if you don’t make yourself relevant and stay one step ahead of being replaced by a virtual clone for 15% of the cost. While this notion may make unskilled workers nervous, at the same time, it pushes Americans to continue to innovate, educate themselves, work harder, make themselves more valuable, and in the process, continue to foster the capitalistic process. Anyone completely giving up is relegated to the ranks of the welfare state and that picture is looking grim…
3) Welfare States are Crumbling -It is true that people the world wide want to come to America and often, Europe, not just for the opportunities to earn money, but also to enjoy a much improved welfare lifestyle than what exists back home. Well, after decades of both nationals and immigrants increasingly living off the public teet, the Western world is finally coming to terms with its debt issues and unfunded entitlements. It can’t continue. Bond vigilantes will see to it. Once they are done routing Europe, America is next. This in turn, will make it less likely or attractive to live a comfortable life off the state, as opposed to the continued attraction we’d seen since the middle of the last century.
4) Information Age – One of the most effective and popular means to maintain control of a society and impose the will of the despots in charge is through control of information. This was quite easy for centuries until just the past few years. China fears the internet so much, they have an entire army of manual snoops ensuring nothing “damaging” (the truth) is being searched for or shared over the internet. Google has left and yet, internet companies are still thriving, as long as they play along with the state. However, just witness the Arab Spring very much facilitated by social media, mobile devices and an idea. The entire region is being transformed (witness Libya this week) by the ability to access information in real time. Once it exists, it is difficult to extinguish. Americans are used to and relish their freedom, ability to share and devour information, and in recent years, earn a living or extra money online. As long as the internet continues to function, capitalism will continue to flourish. It is a mathematical and behavioral certainty.
There are numerous other theses to support the same argument. I am not threatened by the notion that capitalism is dead because it is so naive to believe so. Capitalism is the only true way to financial freedom whereas all other philosophies make you a slave of the state. While radicals continue to attend rallies, take to Facebook with their complaints or try to convince others that their problems stem from capitalism, I’ll spend my time and efforts making thousands per month blogging, starting up an AutoCAD outsourcing venture, investing in rental real estate, and love life.
What Say You?
Is Capitalism Dead?
{ 17 comments… read them below or add one }
Capitalism is alive and well within every one of us and we are free to pursue it. We have the freedom to do much more than we realize or most of us will do.
I’m annoyed by the antics of our leadership, but loving the opportunities I continue to find. Can’t have it all I suppose…
Krantcents touches on the very heart and soul of capitalism, namely freedom. It is longed for in every human being. Capitalism is simply the economic system that springs out of freedom. The Arab spring demonstrates that the desire for freedom, self governance and determining one’s own destiny is alive and well.
A lot of Americans feel we don’t even have capitalism here, that it’s a pure kleptocracy. Too cynical for me.
“While radicals continue to attend rallies, take to Facebook with their complaints or try to convince others that their problems stem from capitalism,”
The problem is this group of people that believe capitalism is the problem. So what they do is add more regulations, a more socialistic environment, and more crony capitalism. They then shake their finger and say see it’s it’s capitalism’s fault when things fail and then proceed to make capitalism less effective. It’s a vicious cycle.
For those who are in favor of socialism, or communism more than likely has never lived in that environment. Anyone who has knows truly how bad it is.
It cracks me up that none of these whacks would ever live in a Communist country; just live here and criticize it.
The only system I know actually works! Sure, may not be perfect but till someone shows me a better system, I’ll stick to Capitalism!
Agreed; Michael Moore’s documentaries don’t have me convinced.
One word sums up most of Michael Moores documentaries…
Attention
He has characteristics similar to that of a charlaten.
I did enjoy his work with the Indy Movies though.
Ah…I knew it. Spell check helps before the post…
Charlatan
“Yeah, that looks right.”
See? My success and lessons handed to me in capitalism have given me confidence! 🙂
The shame is that people associate capitalism with what we have right now–corporatism. There’s a difference, a very big one, and politicians love to frame the debate around the here and now being pure capitalism, when it really is nothing of the sort.
Hippies forget that it’s a dog eat dog world and generally the bigger nastier dog wins.
We should all just love each other and the government will take care of everyone. Peace. 🙂
I’ve read something similar on The Burning Platform. 😉
I’ve learned much from both my travels and from reading Mises, both the site and the works of the man.
Capitalism and Socialism are terms often misused, and what is called “Capitalism” is what I prefer to call “Crony Capitalism”.
Capitalism as the Austrians define it is the driving force of prosperity and the massive rise in the standard of living in recent times. It’s about voluntary exchange and economic cooperation, and this is what has led to the end of widespread disease, child labour, and famine.
Socialism as it is defined by proponents is meant to rise up the most disadvantaged people without hurting anyone else; to create something where nothing was there before. It is based on Santa Claus economics.
However, in reality, socialism often ends up something far more worse than this. It is directly responsible for the deaths of tens of millions in the 20th century and for the misery of hundreds of millions more. It starts off as a war by the elite against the rest of society, with the rest of society often complicit in their own downfall (see: Stockholm Syndrome). Taken to its logical conclusion, it becomes something far worse: the complete destruction of society and a return to biological competition, or a war of all against all.
We are currently somewhere in between. The specialization of labour, capital surplus, and the spirit of free enterprise and free trade are being destroyed by protectionism, class warfare, corruption, barriers to mobility and trade, and government-sponsored monopolization. When men and women cannot improve their lives by voluntary trade and exchange, the only alternative is warfare.
In the market economy, two people trading become better off. In the force economy, there is always one loser. If we go far enough down this path, we end up back in the animal kingdom, where only the strong and the well-connected survive and the weak die early and miserable deaths. However, even the strong in such a world suffer by far compared to how well their lives could be in a rich market economy.
Hey, a Burning Platform reader, nice! Jim is actually my neighbor interestingly; he lets me post an excerpt and link back now and then, very nice of him!
Anyway, I agree we’re not where we’d want to be on the continuum, but in trying to think of a country that gets it right, I’m coming up blank. Perhaps in a democratic society where the constituents continue to elect politicians that promise them crap, this is the best we get.
Good and timely article, Darwin.
I went and read Roubini’s article (thanks for posting the link), and it suffers from the usual techno-left intellectual vanity of thinking that if just the right smart people were in charge, we’d have just the correct amount of infrastructure spending, perfectly justified private-public partnerships, and laser-targeted stimulus “investments” in nifty technologies of the future (ethanol, anyone?). As JT correctly points out, that kind of magical thinking just devolves into rank corporatism, or, as it was fashionably admired in the 1920’s and 30’s, Italian-style fascism. “Tutto nello Stato, niente al di fuori dello Stato”… (all within the State, nothing outside the State)
That’s pretty neat that you guys are neighbours, it’s actually through a post you wrote on this blog at some point that I learned about Burning Platform, so I have you to thank for introducing me to (another) cool blog 🙂
Whether he said it or not, Winston Churchill was right about democracy being the best of the worst… which means we have a lot of room to improve. Those guys on Mises and elsewhere have some ideas. Maybe allowing more voting by feet via smaller geographical areas would be a start…
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