Hate Capitalism?

Column for week of September 8, 2014

     Many attack and vilify capitalism.  Others praise and
defend capitalism,  Why?

     Imagine two people battling over the virtues of Pat
Smith.  One despises and hates Pat.  The other sees virtue
worthy of sainthood.  Which one is right?  Could they both be
right?  Yes, they could.  There are two Pat Smiths.  One is a
51-years old male pedophile and mass murder.  The other is a
23-years old female who devotes her life to rescuing orphans.

     Until the disputants recognize that there are two very
different people called Pat Smith, they are unlikely to resolve
their differences.  Add a half dozen more Pat Smiths and we will
have something similar to the endless battles over capitalism. 
Most of the people battling over capitalism never bother to
compare their definitions of capitalism.  Many don't even have a
definition in mind.

     What, then, is capitalism?  Even more basic, what is
capital?  Our ultimate goal of production is consumer goods,
things that people can use.  Capital is the resources, both natural
and man made, that are useful in the production of consumer
goods.  Capital includes iron ore, mines, steel mills and auto
factories.  It also includes tractors, fertilizer and herbicides.  Add
to those schools, roads, offices, stores and a million other things.

     Without capital we can't produce anything.  All we would
have is whatever consumer goods nature provided.  In other
words, everyone alive would be a hunter gatherer living hand to
mouth.

     It is hard to believe that those demeaning capitalism want
to put an end to capital.  It must be the "ism" that they hate. 
Every economic system on earth is founded on capital. 
Socialists, fascists, communists, mercantilists, crony capitalists,
free market capitalists, and all combinations of the forgoing can
fairly be called capitalists.  All of these systems attempt to
accumulate capital to use in the production of consumer goods. 
They strongly disagree on how to accumulate capital.

     One writer defined capitalism as "a system of voluntary
economic exchanges between parties without government interest
or intervention."  That is a nice definition.  It doesn't describe
capital or even mention it.  What he has described is free
markets.  Why on earth call it capitalism?  "Free markets" is a
much more descriptive name, and far less confusing.  The term
"free markets" also distinguishes this system from all of the
other economic systems, all of which are far from free.

     Some people who defend capitalism do define what they
defend as free markets.  That definition is lost when they refer
only to capitalism.   The main thing called capitalism today is
the economies similar to the US economy.

     The US economy is predominately crony capitalism
where government uses force to reward the rich and powerful
special interests at the expense of the general interests of just
about everyone else.  If you believe we have freedom in the
marketplace,  try starting a business while ignoring government. 
See how far you get before a special interest sends government
to shut you down.

     In New England a woman started a food boat selling food
to boaters.  The customers thought it was great.  A newspaper
ran an article about the food boat.  The next day government
shut the food boat down.

     Our economy is immersed in crony capitalism.  The
average person can be forgiven for believing that capitalism
means crony capitalism rather than free markets.  I hate the term
capitalism.  It is misleading and confusing.  Defend freedom in
the marketplace under its own name, free markets.

     Those who can't tear themselves free from the word
capitalism should at least include a first name.  Defend free
market capitalism.  Condemn crony capitalism.

     The Occupy Wall Street crowd was almost right.  Wall
Street is mostly crony capitalism.  The core problem isn't Wall
Street.  The core of the problem is the government that
empowers Wall Street.  Those who  believe that government will
save us from Wall Street probably hire foxes to guard their
chickens.

aldmccallum@gmail.com
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Copyright 2014
Albert D. McCallum