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A Capital Idea: an “-ism” for Freedom

By Mike Cronin

Last week, I offered the view that adopting socialism is a recipe for disaster. Most of the political “-isms” (socialism, communism, fascism, imperialism, etc.)  “-chies” and “-cracies” (monarchy, anarchy, theocracy, democracy, plutocracy, oligarchy, etc.) sound different on paper, but they all have two things in common: the rule of one human or few humans over the rest, and the absence of individual freedom.

There is an alternative.  Our founders gave us a Constitutional republic which enshrined the rule of law and individual liberty.  The essential element of freedom is property rights, including self-ownership.  The political-economic system that arises where freedom reigns is called capitalism.  It has never been fully embraced by any country.  Our own country perhaps came the closest, which greatly contributed to the vast economic achievements and ever-increasing prosperity we came to expect as Americans.

Yet our failure to fully adopt it has had a profound effect on our history. The institution of slavery was a direct affront to the concept of freedom, and it convulsed our country from its beginnings through the Civil War and beyond. I’ve written elsewhere of slavery and unjust war as two of the four major dysfunctions that have afflicted our country.

Want some examples of how capitalism is better than socialism?

The Ukraine is a geographic bread basket, similar in productive potential to the US Midwest; yet the Union of Soviet Socialist Republics (of which Ukraine was once one of the socialist republics) had to import grain from us during the height of the cold war. Why couldn’t they produce and distribute enough to feed themselves?

Virtually every labor saving and communications device and other technological advancement since the Dark Ages was invented or perfected in the US or another semi-capitalistic country. (E.g. the electric light bulb, the car, the airplane, the microwave oven, the TV, VCR, and DVD, the laser, vaccines, etc.). Have you ever considered buying a car designed and manufactured by an Iranian or North Korean company?  Does such a thing even exist? Why aren’t such things invented in dictatorships and socialist utopias?

In most cases, landlocked nations are doomed to economic mediocrity or worse. (Examples: Afghanistan, Mongolia, and Bolivia). But a few, such as Switzerland and Lichtenstein, are incredibly well off.  What separates them? The ones that are well off have a much higher degree of individual freedom and capitalism than the others.

China was once every bit the communist leviathan that the Soviet Union was.  Why didn’t China go the same way the USSR did? Conversely, why is the US going through a decline?

China is ascending to the same degree it has adopted limited capitalistic market reforms. Our country is declining to the same degree we adopt the socialist dysfunctions that destroyed the Soviets and continues to hamper the Chinese. Imagine the productive energy that could be unleashed if 1.4 billion people enjoyed a fully free existence!

Despite the vast body of historical evidence that capitalism works and socialism doesn’t, capitalism has been given a bad name.  Individual freedom requires individual responsibility for one’s own actions and living with the consequences of one’s choices.  For that reason, capitalism will always be a hard sell compared to the free goodies and cradle-to-grave care promised by the heralds of the other “-isms.” On top of that, where capitalism has some influence, prosperity follows. Prosperous people are easy for envy-baiters to blame in order to gain an audience…and power. In virtually every human system of organization other than capitalism, anyone with wealth could only attain it by taking a bigger share of “the pie” than everyone else. Capitalism is unprecedented – it allows the productive to enlarge the pie!  But the envy mongers can’t or won’t see that.  They say capitalism fosters greed.  There’s no denying that greedy people exist,  and some of them advance quite far under semi-capitalistic economies, but socialism is absolutely powered by greed and envy!

It is easy for the prophets of utopia to blame capitalism for the sins of the other systems. The latest example is the appellation “crony” capitalism.  The proper term for companies using influence, connections, and campaign donations to get laws passed that stifle their competition is “corporatism.”  Using the coercive power of government to stifle your competition when you can’t win competitively through offering better value is not capitalism at all, though it has some capitalistic trappings (namely the privately-owned nature of the corporation).

The really ironic thing about the other “-isms?”  They need the productivity of capitalism.  A greedy socialist can’t “redistribute” wealth from the productive to the parasitic if there isn’t any wealth to start with.  He must decry capitalism even as he robs the capitalistic in order to buy votes from those he has bamboozled.

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The Minimum Wage Makes Minimum Sense

Cartoon from: http://tunnelwall.blogspot.com/2014/03/political-populism-not-economics-behind.html
Cartoon from: http://tunnelwall.blogspot.com/2014/03/political-populism-not-economics-behind.html

 

By Mike Cronin

Minimum wage laws, which are meant to reduce poverty, actually cause dysfunction and increase poverty and criminality. The political architects of such laws know this, or remain purposely blind to it, so that they can make promises, get votes, and gain or remain in office.

So how does a mandated minimum wage increase poverty?  While the person who has a minimum-wage job may or may not be defined as poor, it is the person who can’t get a job that suffers the worst effects of minimum wage laws. Since there is no corresponding minimum revenue laws, minimum wage laws dis-incentivize job creation.  Business owners, especially small business owners, have to make a certain amount of money in order to break even, that is, just to pay for their business loans, employees, suppliers, landlords, taxes, and whatnot. Yet there is no law forcing anyone to buy the offerings of a given business.  If a business doesn’t earn enough revenue, they can’t afford to pay even the minimum wage to their employees, so they either have to hire less people than they otherwise might have, they have let people go, or they have to go out of business. In any of those cases, jobs were either lost or not created, which makes it harder for unskilled people to find work, which leads to increased unemployment and poverty.

For example:  If you are old enough, you might remember the days when movie theaters had ushers.  It’s an extremely low-skill job; you could teach it to a high-school kid in an hour or two – and pay him or her correspondingly low wages. There was a match between worker skill level, worker responsibility level, and worker pay.  These days, no one is going to pay a kid $8.00 or $10.00 an hour just to usher, so the usher’s duties got blended into other jobs (assistant manager?) and the job all but disappeared.

Similar entry-level jobs are hard to find anywhere, which makes it harder for high school kids to find work and establish an employment track record.  Instead, such kids either remain with their parents longer, causing the parents to have to support a child longer than they had planned, reducing the parents’ own wealth; or the kid lives on the streets, greatly increasing the likelihood he or she will resort to criminal conduct to survive.

There is a another way some employers skirt the minimum wage laws and pay cheap rates for low-skill labor: They pay illegal immigrants illegally low wages in cash under the table.  This incentivizes illegal immigration, which, in effect, imports more poverty. The illegal immigration “infrastructure” is an underworld, and it attracts other crime: tax evasion, prostitution and other forms of human trafficking, narcotics, gunrunning, gambling (esp. on illegal dog and cock fights), ID forgery, and so on.

To be sure, the minimum wage laws aren’t solely responsible for poverty, illegal immigration, and vice.  Rather, they are a large and obvious contributor to those maladies, even as they fail to produce the promised positive effect.  But they sure sound good.

Posted on by mikecronin2013

Four Branches of Dysfunction in US Government, Part II

War

By Mike Cronin

“What’s the point of having this superb military that you’re always talking about if we can’t use it?” Secretary of State Madeleine K. Albright in 1993, to then Chairman of the Joints Chiefs of Staff Gen. Colin Powell, in reference to Bosnia

In Part I, I opined that slavery was the first of four major branches of dysfunction that plague our government, and that slavery led us to the worst instance of the second: the Civil War. George Washington once compared government to fire: “Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.” Government attracts the power hungry, and war is the most attractive method for the power hungry to exercise their power. War negates reason, and provides a fertile field for yet more power to accrue to the government.  It changes the balance of power in the relationship between people and government – war gives unjust power to the government, powers NOT derived from the consent of the governed.

It is to America’s credit, and to the genius of the founders, that for the most part our government’s powers have retracted somewhat after our wars, but it is to our detriment that that power has never ebbed to the level it was at before each war.  In other words, our government assumes new and greater powers with each war, and then sheds some measure of the accrued power after the war, but never all of it. Hence, with each succeeding war, our government grows and become more intrusive.

Certainly, some wars are more just than others, and our nation must be prepared to them. I felt strongly enough about that to serve in the military, but not blindly. Which wars are just?  Smashing Al-Qaeda was (and remains) a national defense imperative. Going after Saddam Hussein was just, but appears to have also been unwise. Was the Spanish-American war just and wise? It put America on map as a great power, but was it necessary to the defense of the nation?  We weren’t attacked or threatened by Spain.  Historians have alleged that President Roosevelt pressured and goaded the Japanese in to attacking us in order to get us into WW II. We probably would have been drug into the war at some point, regardless, but, if true, was it just and wise to encourage and hasten it? If the Spanish-American War put us on the map as a great power, WW II left us (briefly) as the only superpower, and the Cold War left us alone on the superpower stage. It may be good to be the king, but is it wise to be the largest target in a hostile world?

Slavery and war have exposed us to several virulent strains of hypocrisy: Our founders held that all men were created equal…unless one didn’t count as a man. We abolished the chattel slavery of Africans and their descendants in the south, but periodically enslaved men of all colors and creeds through conscription until the 1970s.  We want to bring peace and freedom and prosperity to the world, but we have allowed (or engineered) ourselves to engage in the biggest wars in history, and suffered internal paroxysms as a result.  If there can be such a thing as a national psyche, these dichotomies are not conducive to its health.

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Four Branches of Dysfunction in US Government, Part I

civilwar

By Mike Cronin

Ronald Reagan once said that government is not the solution to our problems, government is the problem. What did he mean by that? After all, he was president at the time; surely he must have felt that at least some government is good and necessary. As I have expressed in previous posts, our government has become dysfunctional. Just as cancers are flawed cells that grow uncontrollably, consume resources, and displace healthy tissue, dysfunctional government supplants healthy government.  This is what Reagan was referring to.  How is our government dysfunctional? In my opinion, there are four major, interlocking branches of dysfunction: Slavery, war, confiscatory taxes, and currency debasement. In turn, these branches of dysfunction are fueled by ignorance and ambition to power.

Our government was established to protect our rights to life, liberty, and the pursuit of happiness, but dysfunction was present right from the start. The founders articulated the notion that all men are created equal – but they didn’t recognize slaves as wholly men. Slaves counted only as 3/5ths of a person. Our nation began its life trying to cope with a terrible cognitive dissonance and human injustice – one that would cause arguably the greatest existential crisis it has yet faced: the Civil War.

You might argue that the Civil War was about states’ rights, not slavery. Well, there was one “state right” in particular that the South’s economy relied on: slavery. The Southern States seceded in order to hang on to the institution of slavery, but President Lincoln would not tolerate the dissolution of the union, so the first dysfunction led to the second: war. While Lincoln is widely hailed as the Great Emancipator and one of our best presidents, he assumed virtually dictatorial powers during the war, and expressly violated the Constitution and the Bill of Rights, thus setting precedent to his successors that might wish to do the same. One example: Lincoln ordered two newspapers critical of him to be shut down and had their owners and editors arrested for disloyalty.

While the aftermath of the Civil War may have seen the restoration of the country and the abolition of one form of slavery, it did not absolve us of the original dissonance slavery caused. It took another hundred years before the law and most of the nation accepted the full humanity of blacks, but vestiges of racism still haunt us, and our presidents still exercise more power than the Constitution allots them.