An Economy Absent Of Force

Capitalism is quite misunderstood, starting with the fact that people actually think America still runs on a capitalist system. Crony capitalism is the current economic way, with the government set as arbiter between the free market and supposed equality. Of course in reality all of the ills of our country which free-market laissez-faire capitalism has been blamed for have actually been caused by government intrusion into capitalism: crony capitalism.

This is the Keynesian approach to economics, crony capitalism, which bails out, stimulates, regulates and subsidizes. The free market approach, true capitalism, is advocated by the Austrian perspective on economics, which has not existed in America for some time–or in it’s purest form, ever. Economists such as Ludwig Von Mises represent this perspective, and according to an article from the Ludwig Von Mises Institute:

…the nation’s economy is a system of regulated capitalism and welfare-state paternalism, not one of laissez-faire capitalism based on a natural-rights legal framework that respects the sovereignty of individuals and their right to engage in noncoercive action.

The word welfare does not just refer to food stamps and assistance to the poor, it is things like corporate welfare which the federal government turns over to private corporations to the tune of at least $100 Billion annually. How hard is it to turn a profit when the government gives you money? And this is what creates crony capitalism, the fact that businesses are not allowed to sink or swim on their own merit, but are allowed to exist merely because they are “too big to fail”. Of course smaller companies and family businesses are still left to their own devices to succeed or fail, as if in a free market system. The problem here being that they are competing against companies who are not in this free market system. Therefore a small company starting out cannot compete with large companies which receive money from the federal government, thus making the small company go out of business. At this point, most people say “see, look what capitalism gave us, big companies get bigger and small companies fail”. However what made the big company survive was government intervention, which was likewise what made the small company fail.

Take the government out of the equation, and the big company must change its business practices to compete with the smaller company. With no government help to pour billions into the big company, to make costly regulations which the small company cannot afford to comply with, and to use government agencies to harass or drag the smaller company through the mud, the big company would be at the mercy of the consumer. Government intrusion does happen however, which takes control away from the consumer, you and me, and places it in the hands of politicians and bureaucrats. Government intrusion=crony capitalism=the current state of our economy. Free-market=laissez-fair capitalism=an ever expanding economy. “Predatory” business practices can only exist in a system where government is allowed to put its hands into the economy. Companies cannot control you without the government as their tool. A private health insurance company cannot force you to buy their product, the government can, and now does.

If it is equality that people want we must advocate equality of opportunity, not equality of outcome. That is why the right to pursue happiness and the right to property are so important. These rights equate to the absence of force, we all have the right not to be forced, and to exercise that right must agree not to use force on others. Property is what we gain through our own effort, whether intellectual property through the effort of our minds, or physical property through the effort of our muscles. In a crony capitalist system the government uses force to take property from one person or group and give it to another person or group. Without the right to property, what we have labored for, our right to pursue happiness is null and void. An individual cannot do what he deems necessary for his own happiness if his brain, what he does with his brain, and what he gains from using his brain are not guaranteed to stay his, and not be taken away. Force needs to be eliminated from the equation.

In reality, the people blamed for the downturn of our society have been historically the only ones which advance it. According to the same article there are:

…three groups of individuals whose activities are the ultimate sources of prosperity. Those pioneers, as economist Ludwig von Mises called them, are savers who accumulate capital in an institutional framework in which capital accumulation is rendered safe by the principle of the private ownership of the means of production; entrepreneurs who employ capital made available by the savers for the most economical satisfaction of not-yet-satisfied wants of consumers; technologists who perfect methods of processing.[14] In a capitalist society, although everyone is free to join the ranks of these groups, most people do not; rather, they are beneficiaries of the activities of these three classes.

Where all major advances in our society are financed, someone first accumulated the wealth needed to finance the next advance. A saver as the article refers to them, is a person who did not have the products of their mind and labor taken away from them. They were able to accumulate what they worked for, since there was no force to take what they had gained. Later they turned this accumulated wealth into progress for society. First, the person had to use their mind productively. Then the person accumulated what he had worked for and gained because no one was allowed to use force, and take his property from him. With the help of the entrepreneur this man’s accumulated wealth will finance the next innovation which will be available to all of society.

The entrepreneur says, what do people in society want and need? If it is food, he uses the saver’s money to create a better means of attaining food; he then markets these means to society for the financial benefit of himself and the saver. Many would call this exploitation, ignoring the fact that more food is now available to society, at a lower price. Everyone has benefited from this process which has been absent of force, all because the saver was guaranteed not to be robbed. The goose will keep laying golden eggs, as long as society is not so greedy that it kills the goose in an attempt to get all the eggs at once.

The technologist comes into the equation when the entrepreneur and saver have done all they can to advance society. Suppose the saver provided the capital needed for the entrepreneur to breed horses, making transportation available to more people. Horses will only get our society so far, but the technologist uses what the saver has accumulated, and what the entrepreneur has found to be needed by society in order to advance us to the next level: the automobile. Now more goods can be carried further distances at quicker speeds, serving more people in less time. No one alive today invented the car, yet we are all still benefiting from it. Keep this in mind if you are jealous of the financial benefits to the saver, the entrepreneur, and the technologist. What they gained personally has long since ceased to matter, but what society has gained is still helping us every day.

This is why it is not in anyone’s best interest to demonize those who progress our society, and move it forward. We can start by criticizing the true culprits of our declining economy, the crony capitalists. Once force is removed from our economy, then we will again see the rise of the saver, the entrepreneur, and the technologist. Until then, these people are handicapped under a broken system. The saver will never exist to help us, if everything he has is taken from him.

Continue reading about capitalism here.

Click here to watch a couple of video’s which debate the benefits of opposing economic systems (in a very interesting, relatively humorous way).

7 thoughts on “An Economy Absent Of Force

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