censorship, now capitalism



Alan McKendree amck at thenetdr.com
Fri Jul 23 17:18:37 CDT 2004


>Date: Fri, 23 Jul 2004 06:01:55 +0000
>From: "L. Bird" <pkeets at hotmail.com>
>
>>Under capitalism, the only market share a company can acquire is that
>>which it earns by the choice of its customers.
>
>Well, no.  There are other means.  Notice Walmart's strategy, which is to
>move into a community with low prices that drive local stores out of
>business.  Once the mom and pop business have failed, then they raise their
>prices.

The immediate flaw in that allegation is that Wal-mart is nationally 
known for its low prices, and has built a huge and loyal customer 
base by delivering on that reputation.  Further, in my area, which I 
believe is typical, that customer base is known for being in, say, 
the lower half of the income spectrum.  Therefore Wal-mart can't be 
raising their prices by very much, if at all.  The deeper flaw in 
your accusation is that if  Wal-mart raises their prices too much 
(say, back to what the smaller stores were charging) the small 
independents will come right back.  There's simply too much 
investment capital available to sit idle when the opportunity for a 
better-than-average return is present.  Conversely, if Wal-mart 
lowers its prices too much it will actually lose money.  That's a 
sure way to bankruptcy if followed as a business plan.  The fact that 
Wal-mart is flourishing proves nothing more than that it's not losing 
money but is pricing its goods according to the economies of scale. 
Which is promptly voted for by the very customers you are trying to 
paint as harmed by Wal-mart.  You HAVE noticed that the parking lots 
are usually jammed, right?

>I believe Microsoft was busted for its contracts that required
>buyers of its software to use Explorer.

Microsoft has the right to put any conditions it wants on the 
purchase of its products.  You have a right not to buy them if you 
don't like those conditions.  Microsoft was busted by competitors who 
were using immoral anti-trust laws to gain market share that they 
couldn't gain by selling their own products.

>I think you guys may be confusing Capitalism with a Free Market Economy.

Thanks to Kevin for the following: "Capitalism: a form of economic 
system in which the market process and the price mechanism are left 
free to work out the answers to the three basic economic questions. 
'Pure capitalism' would operate with no government interference". 
Regardless of terminology, there should be a term for an economic 
system that respects the individual rights to life, liberty, and 
property.  If capitalism can be reclaimed in the popular parlance to 
denote that, so much the better, but it may not be possible.  Note 
that it's in the government's own interest to spread the idea (not 
least, in government-run public schools) that such a system would 
lead to horrors from which only the government can save us.

>There is no problem in a Capitalist economy with the government 
>awarding monopoly status,

Taking what you say at face value, there certainly IS a problem with 
this in an economic system which respects individual rights, because 
a monopoly can only be granted by making it ILLEGAL to compete, a la 
the Post Office.  Try as they will Microsoft cannot have its 
competitors jailed simply for producing an alternate operating 
systems.

And just to avoid having to write it out every time, I'm using 
"capitalism" to denote a system in which the rights to life, liberty, 
and property are preserved.

>A Free Market Economy, on the other hand, uses consumer choice to allocate
>resources.  Characteristics include private owership of property, free
>competition,

With the caveat that "free competition" means the right to compete, 
not the non-existent "right" to succeed.

>I notice that some folks on TV also confuse Democracy with Capitalism.

You won't catch me doing that.  Democracy too often violates 
individual rights in the name of the greater good of society.

>Free Market Economy.  Under Capitalism, the rich get richer and the poor get
>poorer because the owners of capital are not required to share.  It is to
>their benefit to have a large number of the poor seeking work.

That's a common knock against Free Market Economy, too.  I'm 
surprised you didn't mention it.  But in any case, it's not 
true..."owners of capital" have to "share" their capital every time 
they write a paycheck.  In this society, everyone but some rare 
pathological outliers have capital to some degree or other in the 
form of money, knowledge, physical skills, etc..  It's a real red 
herring to try to oppose "owners of capital" against "the poor" when 
"the poor" have capital as well.

>Notice how
>manufacturing has moved out of the US and into Asia?

The "outsourcing" flap.  I went to a panel on this recently, 
including one James Galbraith whose grandfather might be familiar to 
you.  They told us that the total jobs lost to outsourcing are about 
half a million, or two months' worth of created jobs in a healthy 
economy.  In other words, it's an election-year issue good for many 
votes from the uninformed, but not a real problem.

>Labor is organized here, and it's protected by unions that insist on 
>a share of the pie.

Or so the unions would love to have you believe.  I don't have 
anything against labor unions.  What I do oppose is the use of 
government to force new hires to join unions and employers to deal 
with them -- the infamous "closed-shop" laws.  Again, using 
government to force that which you can't achieve on your own is NOT 
capitalism.  And as a sidenote, I believe unions have jacked up the 
costs of American labor to the point where it (American labor) may 
not be competitive in a world market.  Lots of very smart programmers 
in India.

>Capitalism prefers sweat shops.

Very Dickensian, but not quite the case.  What you call a sweatshop 
from the comfort of your air-conditioned keyboard, an impoverished 
man on the streets of Cambodia calls the best job available and maybe 
a way out of the only life he had before foreign businesses arrived. 
See
http://shorterlink.com/?9RROO7

>This is a Free Market Economy you're describing.  Under Capitalism, the rich
>owners of capital make private deals with their buddies in the government
>for a bigger share of pork contracts.

Again the inevitable but incorrect pairing of "rich" with "owners of 
capital".  And once again, let me make it clear that back-room deals 
between government and businesses are NOT what I'm defending, nor are 
they part of (laissez-faire) capitalism.  This is not to say that 
governments shouldn't ever deal with business -- they, too, need 
office supplies, building repairs, etc.

>  >Government is the problem, masquerading as the solution --
>e.g., instituting huge (60%) tariffs on imported goods in 1929, then
>blaming the resultant epic crash known as the Depression on "the
>excesses of capitalism".  Readers interested in learning more should
>see _Antitrust: The Case for Repeal_ by Dominick Armentano, and
>_Capitalism: The Unknown Ideal_ by Ayn Rand.
>
>I don't know anything about Armentano, but Rand is an Objectivist (reason,
>individualism, freedom, and achievement)

Exactly so.  Which of these do you oppose?

>rather than an Economist.

She was a philosopher, and in so being identified basic principles on 
which Economics operates, whether they are recognized or not.  For 
example, the principle that government should exist to guard 
individual rights, and when it acts to violate them in an economic 
system, the result is a weaker economy...which means the result is 
decreased human well-being.

>   Have a
>look at Adam Smith, David Recardo and Karl Marx.

I have.  That's "Ricardo", BTW.  Adam Smith produced the famous 
identification that individuals working in their own self-interest 
act to improve the welfare of the society, as a side-effect.  Marx, 
of course, saturates the (untrue) characterization of labor relations 
as a life-and-death struggle from which only government can save us.

>Besides that, here's an interesting reference about the new "Gangster
>Capitalism" that has emerged in recent years.
>
>http://www.zmag.org/content/showarticle.cfm?SectionID=13&ItemID=1549

Read it.  It's rife with references to non-existent rights, such as 
human rights, environmental rights, corporate rights, profit-making 
rights, rights to clean water, social rights, political rights, ad 
nauseum, as well as an overweening hatred for anything that could be 
characterized by the word "corporation".  I'm not real impressed with 
a writer who doesn't know the difference between a right, a 
privilege, and an entitlement, but here's a hint:  If "rights" are 
properly defined, there is no conflict between any individuals' 
rights, and 2) no one has a right to anything produced by any other 
person (business, corporation, etc.).

I do share McQuaig's dislike of the World Bank and the IMF, at 
least...in a free-market economy, government would be stripped of the 
ability to control the money supply and we would be on an honest 
monetary standard, probably gold.

Cheers,
-- 
Alan
"the average Texan...carries not just a gun but a SHOTGUN."
     --Pete Townshend, 1967




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