Implementing capitalism Options

[Ribald]

Hi everyone. I'm having hard time defending pure capitalism on my classes. The idea of economy free from government interventions seems strange to everyone. I want you to help me by answering these two questions. (Sorry for any grammar mistakes, English is not my native language)

1.It is known that a company without government help will lose in long term with company benefiting from taxpayers money. In short term there could be some brilliant ideas that would nivelate the difference, but in long term there would be higher costs of production leading to higher price of a product. So the country government can say:"We would gladly implement pure capitalism, but we don't want to leave our businessmen alone. We are helping because other countries are helping too." What would happen to the companies if we would forbid government to help them in any way? Would they fall in competition with boosted foreign enterprises? Is the solution to this problem simultaneously stop helping by all near countries?

2.From what sector or issue would you start implementing rules of pure capitalism in a partly-capitalism country (for example in France)? Why from this?

[rtg24]

1. Evidence is against this. For example, Brazil and Taiwan both tried to dominate the electronics industry. Brazil's approach was mass subsidies to all computer companies and tariffs and barriers to "protect" them from the outsiders, Taiwan's was to completely deregulate, and de-tax anything to do with computers. Nowadays even Apple makes their stuff in Taiwan. Nobody has heard of a Brazilian computer company. Government intervention kills companies. A somewhat lightly related, but amusing anecdote: a friend has just come back from the training programme of a large US bank that didn't need the government money they were forced to accept. The new graduates were staying in a not so great 2* hotel an hour's commute from the training centre. This is a bulge bracket place. I think you can guess the name. On the other hand, another bulge bracket place that did need, and greeted with open arms government money, housed all their interns in a 5* hotel on Time Square and held the training on the suite at the top floor of the hotel. One is a business, the other a looter. I'll let you guess which stock I'd rather buy and hold. I'll also let you guess which one has over 1000 applications per place, and has such a strong culture that people turn down competitors' offers of three times the salary and much bigger risk allocation.

More on Taiwan and Brazil: http://www.ccsindia.org/people_rw_freetrade.asp

2. Sarkozy's approach was to lower the tax ceiling down to 50%, and to implement massive tax cuts for anybody investing in small businesses. The first, because aside from the obvious discouragement of home talent (by assuming people work selflessly) he realised that most talented French citizens went abroad as soon as they could. If you go on a City of London trading floor, you'll see that a very large proportion of the best traders are from France, usually having been trained at one of the government-funded elite Grandes Ecoles (Polytechnique's options professor is the most recognized world expert in exotic derivatives, if I remember well). I also keep meeting Silicon Valley French entrepreneurs. There's even a French Grandes Ecoles association in New York to help the recent brain-drain immigrants to settle in US business life (what a shame they don't count Cambridge, I wouldn't mind using THAT network!).

If you would like to know a step-by-step approach to deregulation, you should look at Thatcher's turning around of Britain, or read Dan Hannan's book "The Plan" which explains how to do it with today's Britain. I'm afraid the US intellectuals are less worried about practical matters these days, but Hayek, Friedman, etc. at least highlight the physical origins of the problem (Ayn Rand deals mostly with high-level ideals, except in Atlas and to some extent in Capitalism: The Unknown Ideal).

[Betsy Speicher]

Hi everyone. I'm having hard time defending pure capitalism on my classes. The idea of economy free from government interventions seems strange to everyone.

You can save yourself a lot of useless argumentation if you begin by asking, "If I could show that pure capitalism leads to greater prosperity than a mixed economy, would you become an advocate of pure capitalism?" Don't be surprised if they say no.

That is because they regard capitalism as IMMORAL. Practical arguments will not sway them. If they did, the obvious wealth and success of freer countries would have won them over.

[Abaco]

This is a hijack of the thread to some degree. Sorry about that. But, it reminds me of a conversation I had with a coworker just this morning. He is originally from Iran and went back there to spend a month traveling and visiting family and friends. His first day back at work is today. He and I often chat about economics and the stock market. So, I was interested to hear him say that his family members back in Iran are enjoying much more prosperity that we seem to be and that the US dollar isn't worth much there. This change in the dollar's value is fairly recent, from what I understand. My friend's brother runs an import/export business and, according to my friend, has a net worth several times over what my friend (an engineer here in the US) does.

These are just one man's observations and perhaps not well-established but I find them very interesting and my immediate reaction was to wonder whether or not our government is relatively more oppressive against business. My friend, after taking this recent trip, seems to think that the US government is more oppressive against its businesses.

[RayK]

Abaco, in a certain context productivity is the basis of wealth, the more productivity a person or country is the wealthier they should be. But when a country prints more money than there is productivity to back it they will cause inflation and hence a lowering in the value of their money.

[Abaco]

Abaco, in a certain context productivity is the basis of wealth, the more productivity a person or country is the wealthier they should be. But when a country prints more money than there is productivity to back it they will cause inflation and hence a lowering in the value of their money.

Certainly! I just saw the latest economic data on the United States that showed an increase in productivity that coincided with a drop in earnings (certainly not taking inflation into account). "Productivity" is a nice way to say that people are working harder for their money. I was surprised by my friend's impression of the disparity in lifestyles.

A while back he told me the story of how his parents sent him here at 19, alone, with some cash. They wanted him to have a better life than he would have in Iran. This would be around 1983. He came, moved into a hotel in downtown LA, learned the language, worked hard, and was successful. Now, it looks like he'll be moving back for a better life in 2 years (after he gets his kids into college here).

[MichaelJ]

2.From what sector or issue would you start implementing rules of pure capitalism in a partly-capitalism country (for example in France)? Why from this?

If I used America as an example, and I become elected president after Obamas term, I would most likely be running on a platform of reducing government waste to cut the governments burden on the nation.

One aspect about what we are facing, is that it is not just a political battle we are facing, but an ideological battle.
So while I speculate that others will focus on deregulation or tax cuts as their main priorities, in recognition of the fact that I will have only limited political capital, my main priorities will just be limited to 3 areas.

1) Eliminate all government funding for art and all its derivatives. If socialists want their vomit on a canvas, they will have to pay for it themselves out of their own pockets. Since art can illustrate so well what things could be like, it is important to remove the government support for this area, to return art fully to the marketplace of ideas, where each idea survives on its merits and supporters, not by government looting.
2) Eliminate the Department of Education. Remove the federal government completely from educating students in any way or form. This includes universities. This won't have any major benefits right away, because most states will probably step in to fill the role that the Federal government used to have. But now people in New Hampshire for example can experiment with entirely private education, without worrying about some federal government slamming their state hard, or having to worry about the opinions of lets say California.
3) Eliminate the FCC, privatise the airwaves to the stations / businesses that currently use them.

I think that after these 3 actions, I will be deeply unpopular with the left fired up and in uproar, and will most likely be a 1 term president, probably forgotten after a period of time as a minor president.

But with those 3 things completed, I would leave office proud because in my judgement, I would have done the cause of reason a huge victory by getting the government out of the marketplace of ideas and art entirely.

It will be up to future philosophers to capitalise on that by fighting fiercely for the cause of reason, but at least now they will only be fighting other private philosophers to convince others based on the merit of their ideas. They will no longer have to argue against people with unlimited resources.

[Auric]

You can save yourself a lot of useless argumentation if you begin by asking, "If I could show that pure capitalism leads to greater prosperity than a mixed economy, would you become an advocate of pure capitalism?" Don't be surprised if they say no.

That is because they regard capitalism as IMMORAL. Practical arguments will not sway them. If they did, the obvious wealth and success of freer countries would have won them over.

I feel a taboo in resurrecting old threads for some reason (anyone ever felt that?), but couldn't not reply to this. I think it's interesting to consider turning this idea on its head in order to let it sink in. If someone else said to me: "If I could show that socialism leads to greater prosperity for everyone than capitalism, would you advocate it?" -- I would say "no", as well -- for the same reason: because I regard socialism as IMMORAL. Practical arguments wouldn't sway me (if any could be made).

[JeffT]

You can save yourself a lot of useless argumentation if you begin by asking, "If I could show that pure capitalism leads to greater prosperity than a mixed economy, would you become an advocate of pure capitalism?" Don't be surprised if they say no.

That is because they regard capitalism as IMMORAL. Practical arguments will not sway them. If they did, the obvious wealth and success of freer countries would have won them over.

I feel a taboo in resurrecting old threads for some reason (anyone ever felt that?), but couldn't not reply to this. I think it's interesting to consider turning this idea on its head in order to let it sink in. If someone else said to me: "If I could show that socialism leads to greater prosperity for everyone than capitalism, would you advocate it?" -- I would say "no", as well -- for the same reason: because I regard socialism as IMMORAL. Practical arguments wouldn't sway me (if any could be made).

If there were a history, with tens or hundreds of examples, of socialism leading to vastly greater prosperity than capitalism, than would you check your premises about socialism? To not do so, would be rationalism. Of course, the example is somewhat absurd, because there is of course no history showing socialism leading to greater prosperity than capitalism, because it doesn't. (And, such an example is not merely hypothetical, but unimaginable, as it rests on a contradiction.)

Do you think that a person, initially unfamiliar with Objectivism, but who is motivated to spend time studying the Objectivist ethics because they are faced with a series of examples in politics where capitalist policies are beneficial and policies redistributing wealth cause misery, to have engaged in an invalid reasoning process? If so, then what ought to motivate somebody to study Objectivism?

In fact, it's the examination of the endless history of the effects of capitalism vs. socialism, and the integration of many such facts, that would help one discover rationality, independence, and the other virtues in the Objectivist ethics.

[Auric]

You can save yourself a lot of useless argumentation if you begin by asking, "If I could show that pure capitalism leads to greater prosperity than a mixed economy, would you become an advocate of pure capitalism?" Don't be surprised if they say no.

That is because they regard capitalism as IMMORAL. Practical arguments will not sway them. If they did, the obvious wealth and success of freer countries would have won them over.

I feel a taboo in resurrecting old threads for some reason (anyone ever felt that?), but couldn't not reply to this. I think it's interesting to consider turning this idea on its head in order to let it sink in. If someone else said to me: "If I could show that socialism leads to greater prosperity for everyone than capitalism, would you advocate it?" -- I would say "no", as well -- for the same reason: because I regard socialism as IMMORAL. Practical arguments wouldn't sway me (if any could be made).

If there were a history, with tens or hundreds of examples, of socialism leading to vastly greater prosperity than capitalism, than would you check your premises about socialism

Long before that.

[JeffT]

If there were a history, with tens or hundreds of examples, of socialism leading to vastly greater prosperity than capitalism, than would you check your premises about socialism

Long before that.

I'm not sure how that fits with your previous post. You said:

If someone else said to me: "If I could show that socialism leads to greater prosperity for everyone than capitalism, would you advocate it?" -- I would say "no", as well -- for the same reason: because I regard socialism as IMMORAL. Practical arguments wouldn't sway me (if any could be made).

But now in your latest post you are saying "practical" effects would sway you? Or are you saying they would not convince you alone, but then you (in this admittedly artificial example) would consider the moral aspects anew?

[MichaelJ]

There is one simple truth about Capitalisms freedom, which the implications of, I find quite interesting.

Even if theoretically for the sake of argument, some revolutionary new breakthrough in economics results in command and control economys becoming superior, there is no reason why a corporation can not be founded in a Capitalist system in which people all are paid the same, the land is collectively shared and all the other stuff that socialists want. If their theory is correct, they can live in their socialist 'utopia' in that corporation, without interference.

The only thing they can't do under Capitalism, is force others to live under their socialist utopia. They can only lead by example and inspire others by their success and standard of living under that corporation, to join them.

So if they are still against pure capitalism in which their socialist corporation would have 100% property rights over its land, and be subject to no outside taxes(basically full freedom for that corporation to run itself however way they want to), it indicates to me that they are not interested in implementing their socialist economy for themselves, but more interested in controlling and looting other people.

[MichaelJ]

There is one simple truth about Capitalisms freedom, which the implications of, I find quite interesting.

Even if theoretically for the sake of argument, some revolutionary new breakthrough in economics results in command and control economys becoming superior, there is no reason why a corporation can not be founded in a Capitalist system in which people all are paid the same, the land is collectively shared and all the other stuff that socialists want. If their theory is correct, they can live in their socialist 'utopia' in that corporation, without interference.

The only thing they can't do under Capitalism, is force others to live under their socialist utopia. They can only lead by example and inspire others by their success and standard of living under that corporation, to join them.

So if they are still against pure capitalism in which their socialist corporation would have 100% property rights over its land, and be subject to no outside taxes(basically full freedom for that corporation to run itself however way they want to), it indicates to me that they are not interested in implementing their socialist economy for themselves, but more interested in controlling and looting other people.

One thing I would like to add, that is why fundamentally, it is not a problem of economics, people under capitalism will in their own self interest, form corporations or economic structures that are the most advantageous to themselves. You got the freedom to live the way you want.

It is fundamentally an ethical debate that must be won for capitalism to be implemented and for it to spread, with the fundamental ethical question that must be resolved being "Is it right to force other people to do things against their will, just because you want it?"

[Betsy Speicher]

Do you think that a person, initially unfamiliar with Objectivism, but who is motivated to spend time studying the Objectivist ethics because they are faced with a series of examples in politics where capitalist policies are beneficial and policies redistributing wealth cause misery, to have engaged in an invalid reasoning process? If so, then what ought to motivate somebody to study Objectivism?

That is one thing that might motivate someone to study Objectivism, but as someone who has motivated dozens of people to study Objectivism, I don't think that is likely.

The only way to motivate anyone to do anything rational is to appeal to their self-interest. I look for an important personal value that a person may have and show them how Ayn Rand's ideas will help them get, keep, or defend that value.

In my experience, if a person's most important values are political rather than ethical, it is not a good sign. Ethics is personal and is about a person choosing and acting correctly while politics is about the proper actions of others. I have found that when a person's main concern is politics, they are usually motivated by a desire to control others. Controlling people sometimes glom onto Objectivism, but not usually for good reasons.

[JeffT]

Do you think that a person, initially unfamiliar with Objectivism, but who is motivated to spend time studying the Objectivist ethics because they are faced with a series of examples in politics where capitalist policies are beneficial and policies redistributing wealth cause misery, to have engaged in an invalid reasoning process? If so, then what ought to motivate somebody to study Objectivism?

That is one thing that might motivate someone to study Objectivism, but as someone who has motivated dozens of people to study Objectivism, I don't think that is likely.

The only way to motivate anyone to do anything rational is to appeal to their self-interest. I look for an important personal value that a person may have and show them how Ayn Rand's ideas will help them get, keep, or defend that value.

In my experience, if a person's most important values are political rather than ethical, it is not a good sign. Ethics is personal and is about a person choosing and acting correctly while politics is about the proper actions of others. I have found that when a person's main concern is politics, they are usually motivated by a desire to control others. Controlling people sometimes glom onto Objectivism, but not usually for good reasons.

When I wrote that post I didn't literally think politics was the only way to be motivated to study Objectivism. But perhaps I am overestimating it--possibly because personally, that was my path into Objectivism--first having learned about and become greatly attracted to the Libertarian position, then discovering Objectivism directly via my research into that.

But my primary purpose in that post was to illustrate that ethics and politics can't be separated; the principles of ethics properly govern politics, so one can't ignore ethics when making political decisions--but that even if one has less than full understanding of Objectivism--or even none at all--one can be properly attracted to a political system (capitalism) because of its proven track record in creating wealth. That is not sufficient to defend capitalism, but it's a motivating factor.