Has Capitalism failed and are the other ‘isms better?

Last updated on May 10th, 2018  

The young are increasingly leaning towards collectivism as a solution to their troubles. This is mostly an example of the grass is always greener on the other side of the fence or that which you know is worse than that which you don’t know.

You might ask yourself “Have you lived in a capitalist society?”

Those in the West often think they have but this is not true.

Capitalism, properly defined, is built upon free markets.

Free markets are the voluntary exchange of products and services between people.

Where in the West, or for that matter anywhere in the world, are you free to voluntarily exchange products or services on your own terms?

Nowhere. In the “so called” capitalist west there are an endless array of regulations which define what, how, and when you can exchange goods and services with others. You are also often required to pay percentages of the value of the exchange to the government.

In other words, there is little that is free or voluntary about exchange of services or products in the west or anywhere else.

A system in which the government is in charge of the process of exchange between people is called fascism, which means the state is in charge. The state makes the rules and takes a cut. Fascism, socialism, and collectivism are actually all pretty much the same. They differ a little in how big the cut is and who is making the decisions.

In fact all the ‘isms, including modern capitalism, come down to how much control the state has and how much of a percentage they take.

Some people call all these various isms ‘statism’ meaning the state is in charge.

Capitalism, in the West, has failed to the degree that it is no longer about free markets and the freedom to voluntarily exchange goods and services.

Capitalism, in it true definition, originally described how you, in a free market, would save up money (called capital) and use that money to finance your business or other businesses.

In other words, the money you saved, and generally saved in a bank or a safe, was called your “capital”. You would use it to run or expand your business or to help someone else start, run, or expand their business.

So capitalism was meant to describe free markets (free voluntary exchange) and the money you saved that you could invest in your business or others (capital).

“Capitalism” to describe the state of affairs in the West today is a misuse of the term capitalism and is meant to confuse you.

The United States of America rocketed to the most powerful and wealthy nation in the world due to its founding as a free market economic system.

The citizens were free to exchange goods and services unencumbered by the state.

The failings of the modern Western economic systems are two fold.

One, the state takes control and its percentage. Two, the state empowers particular companies to control the rest. It is this second effort which is particularly damaging. The state misdirects our attention such that we think that it is the big  evil companies that are causing the problems. The problems arise with the state. A  big evil company cannot force (coerce) you into doing business with it. If it was just a question of  big evil companies we could choose to stop doing business with them and they would cease to exist.

But the state can force us to do business with big evil companies.

The state does this by taxing us and giving the money to the big evil companies.

Now it is not really the “state” that is taxing us. It is our representatives.

The representatives sell us out to the big companies in exchange for a few things:

They sell us out in exchange for campaign contributions. They sell us out in exchange for jobs for or payments to their relatives (spouse, children, aunts & uncles, grandparents and so on).  They sell us out in exchange for future “employment”, that is after they are no longer “in office”.

If you randomly pick 5 congress people from among the House and Senate and study their families and sources of income, you will find that 98% of them are selling us out.

This is simply how Washington, DC works.

The only way to fix the problem is to make the state less responsible. That is to simply take away the states power of control over the economy. If congress people had little power, the companies would not spend their time bribing them.

So who is the bad one: The guy offering the bribe or the guy taking it?

It does not really matter, bribes are only offered to those with power. Take away the power and the bribes disappear.

In fact, it is really the concentration of power that leads to the problems. The more concentrated the power is the easier it is to focus the bribery on a small number of people.

When trying to influence the federal government there are 542 people at most that you need to focus your efforts on.

On the other hand, if the power was returned to the States (where it belongs, and where it originally was) the people offering the bribes would have to influence tens of thousands of people rather than just 542.

Of course, some states would be equally as corrupt as the federal government is now, but there would be a few states that were less corrupt. A few states that were more open to free markets, voluntary exchange, and minimal regulation. Because prosperity would be concentrated in these states people would move to them leaving the more corrupt states.

In fact, this is why there is a “United States”. The United States is an conglomeration of 50 (originally 13) independent and sovereign states, with their own laws. The federal government was meant to be a very small government with  a very small set of enumerated powers. Those powers being specifically defined in the US Constitution and this small federal government was intentionally designed to eliminate the kind of problems that we face today.

The founders of the United States understood the kinds of problem any large government faces and tried to eliminate the problem by guaranteeing that the federal government would be small with a severely  limited set of powers.

How we fumbled the ball and ended up with this giant federal government will be a subject of another post.

They key is to develop a clear understanding of what capitalism is today and what it once was so we are not confused by all the jargon that is being thrown around.

No one wants “capitalism” as it exists today, and that is why we find the young attracted to the other ‘isms. What we and they should want is a return to free markets and voluntary exchange.

Leave a Reply

Your email address will not be published. Required fields are marked *