Why capitalism is worth conserving (and its new populist critics on the right are wrong)

Very good article. The virtue/individual freedom correlation is extremely important. Free virtuous individuals are the best thing for a flourishing society. In a wicked culture such as ours freedoms can sometimes be abused. The problem is not the freedom however and restricting it only makes things worse. This is something that I believe conservatives have largely lost sight of. They are so focused on the outcome that they fail to make consistent and principled policy. The Road to Serfdom should be required reading.

The problem is, right now, most of the wealth in the US is held by people with little concern for “virtue.” Capitalism in the US is sick because the wealthy are not virtuous. They get themselves richer while arguing over paying an employee another $0.15 an hour. They sell out to foreign companies. They move plants overseas. They raid retirement funds. They scream about paying a fair tax rate. On and on.

Capitalism has worked for a good long while in the US because, on balance, there was virtue. I suspect that has gone away.

[Mark_Smith]

The problem is, right now, most of the wealth in the US is held by people with little concern for “virtue.” Capitalism in the US is sick because the wealthy are not virtuous. They get themselves richer while arguing over paying an employee another $0.15 an hour. They sell out to foreign companies. They move plants overseas. They raid retirement funds. They scream about paying a fair tax rate. On and on.

Capitalism has worked for a good long while in the US because, on balance, there was virtue. I suspect that has gone away.

A lot there but most of the problem with capitalism is crony-capitalism. Also, some of what you mention I have no problem with personally.

I have been thinking about writing a couple papers on the Biblical imperative of capitalism. To me it’s explicit in passages like the Ten Commandments and Amos. Contrary to how it has been famously used, the “righteous and justice” that Amos compared with water are capitalism.

[Dan Miller]

I have been thinking about writing a couple papers on the Biblical imperative of capitalism. To me it’s explicit in passages like the Ten Commandments and Amos. Contrary to how it has been famously used, the “righteous and justice” that Amos compared with water are capitalism.

There are many sides and implications to capitalism. Our present situation is fairly sick, imho. And by that I am not referring to the pressure of socialism from the left. The reason that pressure is working is due to the selfishness of business “leaders.”

Certainly capitalism can be sick. And selfishness is at it’s core, because humans are. I’m not sure you can blame it on the leaders, though.

eg, my wife’s old MacBook Air broke (it doesn’t like a glass of water poured into the keyboard!). So I want an enclosure for it’s hard drive and a Torx-5 screwdriver to disassemble it. Last night I went to Best Buy. They only have the proper enclosures by order and the only T-5 they had was in a overpriced multi-tip set ($65), which duplicates a bunch of what I already have. So instead of supporting my local store (never mind that this was a national chain, not a true local store) I’ll order online. We all order online because it’s cheaper.

This is certainly a problem of capitalism in the digital age. The ability to oversee a HUGE amount of work (eg, Amazon delivers an incredible amount of merchandise) is made possible by computers. This allows the oversight of greater numbers of workers. The result is a reduction in the ratio of overseers:workers. There will not be as many owners/bosses.

On this basis, one could make the argument that communism is practically more suited to the digital age. And China may be offer some evidence that at least the digital age makes communism work better than it did in the last century. But it still causes and depends upon human suffering.

I’m not as interested in the practical as in what is Biblical.

[Mark_Smith]

There are many sides and implications to capitalism. Our present situation is fairly sick, imho. And by that I am not referring to the pressure of socialism from the left. The reason that pressure is working is due to the selfishness of business “leaders.”

Seeing as any system is limited by the sinfulness of man, I’m reminded of an old joke/saying that goes like this:

“In capitalism, man exploits man. In communism, it’s the other way around.”

If you are basing your judgment of a system on its whether it can be abused by man, you will likely come to the wrong conclusion as to its relative merits. The selfishness of leaders will exist in any system, so it’s not really all that useful to use that as your main criteria, especially for Christians who understand the sinfulness of man. Everyone looking with longing at other systems always thinks that socialism and/or communism are only seen as bad because “they haven’t been done right yet.” I’d argue that the weaknesses inherent in those systems make it nearly impossible to “do them right.”

We have at times in history seen capitalism work well, with less exploitation of the helpless than seen in other systems, since they can, in many cases, use the system to work themselves out of their condition. While capitalism can certainly also be abused by corruption like any man-made system, it’s also easier to mitigate or sometimes even fix some of the weaknesses than it would be in the others.

I won’t try to argue that American capitalism always gets it right. I would argue that an American version of socialism or communism would be worse, and in most cases, dramatically so.

I won’t try to argue that American capitalism always gets it right. I would argue that an American version of socialism or communism would will be worse, and in most cases, dramatically so.

Sadly…

[Dan Miller]

I won’t try to argue that American capitalism always gets it right. I would argue that an American version of socialism or communism would will be worse, and in most cases, dramatically so.

Sadly…

I don’t really disagree with you. I only said “would” instead of “will” because at this point I don’t think America completely switching to socialism/communism is inevitable, even though our system is not pure capitalism and already has some elements of the others. Maybe I’m not quite cynical enough yet…

https://en.wikipedia.org/wiki/Loss_aversion

The idea is that if people are given something they will view it as moderately nice. So, government health care. People who previously didn’t have access to health care are pretty happy that there is Obamacare. When it came, they didn’t know it was going to be, so the reaction is, “Well, how good is it gonna be?…This is okaaay, but it really could be better…” However, if it were to be taken away, or even suggested to be taken away, those who would propose to take it away would basically be the devil.

So, we can go back and forth between electing liberal (big government) and conservative (smaller government), but even if they have equal time in office, because of loss aversion the conservatives will never be able to undo as much as the liberals do. And the more that happens, the more people become dependent on government and liberals gain voters. And so it might be two steps ‘forward’, one step back, but the country is inexorably marching towards either revolt or socialism/communism.

[Dan Miller]

And so it might be two steps ‘forward’, one step back, but the country is inexorably marching towards either revolt or socialism/communism.

I hope you are wrong, but perhaps January 6th was a preliminary indicator of what a “revolt” might start to look like.

is that the average adult has the exact same buying power today he had 30 years ago, and actually a little less. He has benefited in no way from all the increased productivity. The “bosses” took the profit for themselves. The employees work longer and harder for less of the piece of the pie. That is sustainable for only so long. Eventually someone will decide they don’t like it and revolt one way or the other.

It is absurd that a person can work 40 hours a week and not make enough to live in many places due to high rent/housing costs, and high healthcare costs.

It is absurd that in many areas house ownership is unachievable even for working married couples.

The cost of healthcare is absurd.

It is ridiculous that many employees never get raises, they only get COLAs.

None of this will continue to work for the long term. There is a flash point.

“In capitalism, man exploits man. In communism, it’s the other way around.”

Cute and often quoted, but not really true. As has been pointed out, capitalism requires you to produce something that someone is willing to part with their money over. It is virtually the only way to get money. If you can’t produce that product, you work for someone who does. So there is an inherent outward focus as well. A capitalist has to serve his fellowman by providing something that said fellow man considers valuable enough to give him money for. For the most part, it’s not exploitation because it is voluntary.

is that the average adult has the exact same buying power today he had 30 years ago

Try buying a smart phone 30 years ago. Or getting high speed internet. Or a flat screen TV. Or any number of other things. The truth is that the buying power is greater because what you can buy with the same amount of money is better stuff. 30 years ago, a good laptop computer was available. It was expensive. It was large. And it wasn’t very good.

So this type of nostalgia is a bit misleading because we aren’t buying the same things.

The economy is complex. Thinking it can be explained in a few short paragraphs is a symptom of the lightness of our age.

The problem is the disconnect between consumer and seller. It has driven health care costs up, and it is the reason for the housing bubble collapse from 13 years ago. I could go on and on about health care (I’m a surgeon). When I started practice I joined a honest, burned out, great surgeon who set his own prices reasonably. His fees for surgery were lower than all the competitors. Why? He set them there. My other partner and I raised them (just as every other surgeon has done). Why? Because some insurance companies had higher pay for those same surgeries. Each insurance company and each doctor sets their “fee schedule.” And when you submit to the insurance company, they pay the lower of your fee and their fee. So why not? In all of this (this is the key) the patient does not care at all about whether the fee is high or low.

And Larry,

As has been pointed out,
…capitalism requires you to produce something that someone is willing to part
with their money over. It is virtually the only way to get money.

But also, caveat emptor. The other way to get money is to trick people into thinking your product or service is more valuable than it is. The gullibility of people is sometimes unbelievable. For instance, if you said to me, come up with the most ridiculous “health care” product you can and let’s see if people believe in it enough to pay for it. I would say Let’s do massage without touching - I’m gonna wave my hands over people and tell them that they’re going to get better. Well, guess what - it exists!