A little blog from an upstart theologian that will do its best to exemplify Christ while sharing a thing or two along the way.
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| Preachin's Blog A little blog from an upstart theologian that will do its best to exemplify Christ while sharing a thing or two along the way. |
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Tuesday, June 22, 2004 I'm a CapitalistSomeone today challenged my assertion that capitalism and free markets are the best ways to bring about prosperity and freedom for any people. This is my, lengthy, response. Happy reading: Alright this is going to be long and involved. All of my points are excellently put forward in the PBS documentary: Commanding Heights Capitalism and free markets are the only true economic situations which allow people to be completely free. This statement is my thesis and this statement is what I shall prove hereafter. My points are as follows:
1. Free markets have brought about worldwide change Throughout the last one hundred years our world has seen a revolution in how we go about daily life. Imagine that scene one hundred years ago in 1904 where transactions took place at a painstaking pace compared to our contemporary setting. If one was to write a letter to a friend living in London this correspondence would take weeks, if not months to ferry across the Atlantic and get a response. Now when first transatlantic cable was laid in 1858 this greatly improved communications and transactions, yet most Americans still did not have access to such services. Telephones were certainly around at the turn of the century and many American households would have these devices. Notice though, that it is through ventures related directly free enterprise whereby we have these two services. Today we have millions of transactions processed over a brief few seconds in time. Money is changing hands rapidly, consumers are finding goods and services, margins are swiftly changing, wealth is increasing, prosperity is being spread, overall we have seen a boom economically throughout the world which is unparalleled throughout all human history. What has been the major driver for this success? Free markets and capitalism. Through the private ventures of many we have seen small inventions come together to create great machines and products which have aided us to this point. We have seen tremendous advances in medical technology where 50 years ago we could never have saved a premature birth, we could have never performed a successful heart bypass. This is directly attributed to free markets. The competition to bring a better, faster, more inexpensive, quality good to the market brings out the best in all people. Through the competition allowed through free markets we have seen the greatest boon to our world ever. The worldwide change that has taken place over the last one hundred years has sped up over the last quarter century because of direct governmental actions to relieve the burden of central planning and government control of the private sector. The greatest threat to our prosperity and continued growth has been government interference in the process. Through the excesses of the Roosevelt administration and carrying through the early years of Nixon administration governmental planning in the United States restricted growth. Once those controls were relieved through other administrations and direct action on behalf of the American public there has been an unprecedented growth in the private sector which has made the quality of life for all Americans increase overall. This success has also aided the citizens of other nations as we have been able to work across national borders to bring free market prosperity and wealth creation to the doorsteps of even the most remote peoples. For all the plaudits many have wished to lavish on those accepting some sort of redistribution of wealth and the centralized planning and controls over the major drivers of an economy (transportation, utilities, defense, etc.) these controls have done nothing for the world except ushering in a devastating after-taste in the economy. For all the rosy talk about bringing all people to each other's level and making everyone equal, the barons of social redress have come and gone squandering the lives and economies they sought to better through their corrupt system. There is not a surviving socialism or communism which is a strong, vibrant economy. Rather the countries where this scourge existed have been left with the homeless many, the long unemployment lines, harsh inflation, severe depression, corrupt politicians, and a populous crying out for assistance. The track record for communism and socialism is bleak at best, and to be true is all a loss. 2. Historically and at a basic level people are capitalists This is a striking statement yet it is a statement that is true. Throughout the history of the world people have openly engaged in the free exchange of goods and services. It is the natural disposition of people to do so. Think of the most innocent among us, a small child. As the summer comes they will inevitably set up a lemonade stand to sell a ware for a price. This is capitalism and free markets at its most basic level. These children go out and do so not aware of or caring about government regulation of trade, rather they know the backbone of any economy is that very exchange between two people. Saturday mornings our suburban developments are chock full of signs advertising for yard sales. People browse through the wares being offered and through a simple economic transaction aid the economy. This is something rather normal for us here in the West. Even in the developing world people engage in free markets and capitalism without being told this is what they are doing. Coffee bean growers in Columbia have worked the fields their fathers' fathers worked continuing the tradition of cultivating and selling goods. There is no thought of the government coming in a redistributing their profits to any other group, for they know at the basic level that their profits are just that...theirs. No one else has title to those profits. Explore the sub-Sahara region of Africa and you will find tribes of remote, and forgotten people going and engaging in these transactions in a free market. Think of the large out door bazaars in the Middle East where everything from chickens, to assault rifles, to fruit is sold in a free and open market. People at their basic level engage in capitalistic activities before anything else. It is not natural for people to have to go through a great government bureaucracy to sell a computer. Allowing people the freedom to engage in free markets and capitalism allows them to continue striving for a competent and meaningful existence. Even in times when free markets and capitalism have been quashed by socialism or some tyrannical reign (i.e. feudalism) a small open market has existed underground. When the former Soviet Russia repealed the laws against private entrepreneurship by the next morning there were lines of people on the street buying and selling goods. Literally within hours of deregulating the commanding heights of the economy, the citizenry which had only known despotic socialism suddenly "learned" what capitalism was. Capitalism is natural and is the way of the world. (Note: to read more on this from a far superior author read Hernando de Soto's works: The Mystery of Capital and The Other Path. If you are not familiar with de Soto he is a beloved economist in the third world who says capitalism is the only way to securing freedom and equality. Read about him here) 3. Freedom and prosperity have been widely spread through free markets One of the great arguments against capitalism and free markets is that they have created grave injustices and harsh conditions for those impoverished many who do not have access to any corridor of economic justice. While it is true that for many years some have sought to bring under their foot the necks of the masses, they so in direct opposition to free markets and capitalism. It is not capitalism to chain a young boy to desk and force him to assemble shoes for mere pennies per day. It is not capitalism to threaten and cajole a young woman into sewing pieces of fabric together for a handful of dollars a week. It is not capitalism to enslave groups of people and demand their labors without justice or freedom. It is not capitalism to impose harsh environmental regulations that bestride emergent economies with such tremendous conversion and start-up costs that competition is not able be fostered. Throughout our world we have seen from the start of the twentieth century a time where many people were held back by great poverty and economic injustice to a time where we have seen countless tens of millions brought from these depths into a place of better economic standing. One of the great factors assisting in the economic betterment of these people has been globalization. Globalization, spurred on only by capitalism, has been a much discussed system where country borders virtually disappear and business is transacted globally in a way never before seen. Certainly globalization has its critics and some of their voices need to be heard, some have endured pain because of excesses from corrupt people, yet millions more people have been helped by globalization than have been hurt by it. More people are in a better place economically than ever before. A prime example of this is the growth of the Indian economy based on the outsourcing of American tech companies and their call centers. Many of us own computers that don’t work as well as they could and we have to call in to get tech support, obviously we have all encountered a heavily accented person attempting to help us. What we don’t realize is that person is living in India and has taken a call transferred across continents because of outsourcing. This resource has been saving American companies (like Dell, HP, etc.) billions of dollars and helped create new jobs in the US and India alike. The economy of India has been greatly bolstered by the call center creation and many are seeing a new way of life available to an upcoming generation in India. There have been cries in the US, primarily from unions, that we have lost hundreds of thousands of jobs to this global outsourcing. Yet this is simply not an adequate criticism nor is it well founded. Just as many jobs have been saved, and even more created because of the outsourcing. One of the major components of free markets and capitalism is the matter of competition, and it is a two way street. Just as employers/companies must be competitive to gain and keep business/employees the employees must be competitive to keep their jobs. Why should a multinational corporation like Dell be forced to requite a high paycheck to a sluggard American employee and destroy jobs in the process when they can get a better employee and still pay them a fair wage who lives in India or Africa? This ends up, in the long run and short run being a win-win for the world economy. Globalization and the factors incorporated therein are a brave wind of progress that will see our world grow stronger and more stable. New economies are being forged all around us and we have the unparalleled opportunity to gain access and help not only ourselves but the people within those economies. I need not say anything to you about the possibility that exists in East Asia. Through free markets and capitalism we can work to bring people in that region from a place of poverty and repression to a better life. Should free market participants be expected to act properly towards the dignity and basic human rights of their workers? Of course. Should sanctions be enforced against those who do not? Certainly. Have excesses occurred? Yes. Are we doing better about ridding the world of those excesses? Yes. 4. Socialism/communism leave people without freedom Perhaps the most hypocritical commentary against capitalism has been that it does not allow people freedom when the oligarchs or bourgeoisie (business owners) seek to oppress the proletariat (workers). To remedy this situation the socialist/communist has suggested some forced redistribution of the wealth and government control and planning over all the forces of a economy. To their disdain their system has both failed and proven to produce more injustice than any other system this world has seen. One need only look to North Korea to see the hypocrisy. To achieve true socialist utopia the government must plan all aspects of the economy. Now this presents a grave problem for in order to have this happen the government must enlist the services of many a pencil pushing bureaucrat who is inevitably unattached from the people he/she is planning for. An example is in order: One such person, we’ll call him Boris, is in charge of setting the wage and price controls for all the dairy farmers in his land of Oozilvania. Now Boris sits in his office in the capital of Oozilvania (New Spencer City), behind a steel desk, staring at taupe walls (because taupe is soothing) with a window that looks out onto an alley filled with trash. Boris has many a thick book of economic indicators he must check and has production reports constantly filtered to him. Today Boris is planning the prices and wages for all the citizens of the methane rich county of Preachinville, which is 2,894 miles away. He’s never visited the town. He then goes about his task of setting all the prices and wages without ever engaging any person in that town. He is forcing his will over these people. Today he sets the daily production of milk at 25,000 gallons and the price at $1.25 a gallon, yet he doesn’t realize that a tremendous winter storm has wrecked production facilities and the actual cost per gallon is more like $4 a gallon. Furthermore he is setting the wage for each worker, regardless of particular job, at $5.25/hour. Now the guy who shovels the cow crap and sleeps most the day makes just as much as the guy who regulates and maintains the delicate machine that takes the unpasteurized milk and makes its consumable. This guy had to go and get a master’s degree in engineering to maintain this delicate machinery and never gets a resting moment. What incentive does he have to make sure it produces just as well as others in other locales? Thus the system has allowed the will of Boris to supersede the rights and wills of the people he is planning for. He has become their feudal lord without ever having known them. In capitalism and free markets there is the ability to work with the market as it fluctuates and we can make corrections for various factors. This gives true freedom and maneuverability within the market for the worker. It also makes people equal insofar as if I put in a full days work I get out what I put in, if I slack off and am a bum I get my just deserts with a low wage. No government bureaucrat can tell me what I have to do and take away my right and freedom to charge $10 for a gallon of milk. Capitalism and free markets generate these two inalienable concepts and further promote personal worth, dignity, and worth of labor beyond any other system. The examples can be drawn out ad infinitum extending to issues of choice in education, vocation, residence, etc. 5. Free markets have the greatest potential for further benefit Because of the great ability to change as the markets change, and the increased race to produce better more efficient products through competition free markets and capitalism offer the greatest benefit to the continued growth and prosperity of the world economy. The markets are harsh. Due to the natural economic cycle of depression, growth, maturation, recession, etc. there are always a great many variables at play. As with farming, there are times to reap a great harvest and times of slim production throughout the world economy. The potential for travesty is increased as we become more integrated in the world economy. Thus acting rightly and doing justly is all the more important. (I will deny the urge to go into a long discussion of the place of the church in being the provider of charity, not the government.) When people act unrighteous and do unjust things in the world economy, or even their local economy, there must be repercussions. Thus the rule of law is to prevail, in the same sense that rule is not to hinder either. Private business and entrepreneurship have a greater access to wealth creating devices than any government entity. In pursuing the greatest measure of success these groups will provide better for the world and bring others out of terrible circumstances. In establishing an economy where the government plays a large role in the regulation of business and underwriting certain private citizens’ lifestyles due to the corruption and bureaucratic lethargy the access to the hyper-velocity of the markets is severely limited. Yet through private business and entrepreneurship ventures one will have more access into streams of success that will lead to a better life. This is not to say everyone will be, or should be, living in large houses dotting the shores of our most well maintained beaches. Rather that the quality of life and dignity of person will be increased. Also through this spirit of free markets private charities and ecumenical ventures have more force to act. In helping others who need help there is a motivation, particularly economic in one sense and humanitarianly in the other, to lend aid to bring up the best. Through economic incentives provided by the government and other private citizens (i.e. I won’t invest in a company that doesn’t have good track record of giving back to the community) businesses are motivate to do good and act rightly. Providing education initiatives will afford a company a great crop of recruits for their future prosperity and growth. Examples are certainly numerous. Now all that said to say this: though I believe (and hope to have shown) that capitalism and free markets are the best way to access freedom and prosperity available to us, I fully see and say it is a fallible system that is inherently problematic because sinful humanity is involved as its cogs, gears, and oils. Our job as Christians is to act rightly, do justly, love mercy, and give grace in whatever circumstances we find ourselves in. Christ is the absolute way to freedom. Realize Him today. Well that about wraps it up, for now. I’ll respond as I can to any comments, criticisms, and queries. Thanks for reading. posted by Preachin Jesus | 12:16 PM | |
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