Capitalism



Alan McKendree amck at thenetdr.com
Mon Jul 26 00:04:58 CDT 2004


> Date: Sat, 24 Jul 2004 07:13:05 +0000
> From: "L. Bird" <pkeets at hotmail.com>
>
> Because Walmart is such a huge corporation, it can afford to lose 
> money for a while to undercut other stores.

They (or any other business) could, but it would be a failure as a 
general policy.  I said why in my previous message.

> I know someone who works at Walmart and
> she tells me they've had staff meetings where they discussed 
> strategies on
> how to run competitors out of business.  This is fairly well 
> recognized.

I don't see why you think that's so nefarious.  It happens every day in 
every city in the world, including in the boardrooms of Wal-mart's 
competitors.  They might even have discussed, at your friend's meeting, 
the idea of cutting prices to the point of losing money.  All that 
means is that they discussed a bad idea.  The fact that Wal-mart 
continues to grow indicates that they have not adopted that strategy.

> There have been some communities that refused Walmart building permits 
> for this reason.

Protectionism is a losing strategy, for countries, states, and cities.  
If "communities" refuse to permit Wal-mart to build (using the power of 
government, you may notice, to prevent a voluntary transaction between 
Wal-mart and the land sellers) because they're afraid of the 
competition, they are hurting their own economies.

>> 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.
>
> Immoral?

Yes.  In their interference with property rights (hence the rights to 
liberty and, if pushed to the ultimate, life), anti-trust laws are 
immoral.

>> a monopoly can only be granted by making it ILLEGAL to compete, a la 
>> the Post Office.
>
> Governments used to do this under 1600s lassiez faire capitalism a.k.a 
> Colonialism.  The U.S. was opened up by trading companies who owned 
> monopoly rights.  This is what you want to go back to, right?

It's a little disturbing that you could possibly think I'm in favor of 
making it illegal to compete.  It's the polar opposite of my position.  
Once again, since apparently I must:  everyone should have the right to 
compete if they choose.  That does not mean they have the "right" to 
succeed.

> Are you an Objectivist, Alan?  I've sort of wondered before.

Yes.

>> With the caveat that "free competition" means the right to compete, 
>> not the
>> non-existent "right" to succeed.
>
> But you're expecting a level playing field.

Not at all.  In fact, I don't expect one.  I think it's silly for you 
or me to hang out a shingle overnight and expect to compete with Exxon 
in producing oil or Pfizer in producing drugs, or conversely, to demand 
that they be hampered or mandated to actually help their competition.  
That, again, is violating the property rights of Exxon or the other 
established companies.

> What if competition is restricted by cartels or by sole source 
> contracts like the government
> recently awarded to Halliburton?  Do you think you could start a new 
> business and compete against Halliburton?

Of course not.  I don't know anything at all about whatever it is 
Halliburton does.  Any economic/political system that would guarantee 
that I could declare myself an oil producer (?) like Halliburton could 
only deliver on that promise by violating Halliburton's rights 
outrageously.

> That's not capital.  That's wages.

OK.  My point is that it's arbitrary to make a distinction between 
$100,000 in a business owner's pocket, a $100,000 tractor, and $100,000 
in an employee's IRA.  Assets are assets, no matter what amount they're 
in or who own them.  In a free economy, an employee can become an 
employer relatively easily. If they choose their field wisely they can 
remain an employer, if they choose.

> Do you support the Reaganomics trickle down plan?

I don't remember what it was...sorry.

> Feeding huge amounts of money to the already rich hasn't improved the 
> position of the average worker very much.

Except that the worker now has products he couldn't have developed on 
his own, and which are made available to him by the rich, either by 
direct operation of factories, research, etc. or by investment, which 
in turn goes to fund such things through banks etc.  For example, by 
contrast to Reagan's time the average worker now enjoys the options of 
using the Internet in its glorious entirety, hi-def TV, cell phones, 
and DVDs...not to mention the constantly falling prices of previously 
pricey TVs, VCRs (originally $1,000), computers, etc.  Cars prices 
increase slowly but offer features that weren't available at ANY price 
15 years ago (Onstar, anyone?  XM radio?).  Looks to me like the 
average worker's position has increased vastly.

>> 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.
>
> Hmmm.  What capital do the poor have?

Possibly none, by your definition.  However, they do have the assets of 
at least some money (again, in all but rare cases) and physical and 
mental skills.  As a supervisor, I'll testify that simply showing up on 
time for work is a marketable skill.

>>> (reason, individualism, freedom, and achievement)
>
>> Exactly so.  Which of these do you oppose?
>
> None, but I'm also in favor of democracy.

Then you're in favor of contradictory things, and should rethink.  
Democracy, aka "mob rule", doesn't do enough to guarantee individual 
rights.  A republic is the best invention so far to do it...I'm always 
willing to consider alternatives.

>> government should exist to guard individual rights,
>
> But who is defining the rights?

John Locke.  Life, liberty, and property.  It took Rand to validate why 
these are the correct identifications, as Locke's argument was based on 
God.

> What if you found you've been using city water polluted by dioxin?  
> Any problems with this?  How would you handle toxic waste under 
> lassiez-faire capitalism?

Go to court and prove your damages.  Although for some reason, in your 
example it's the city government who's the villain.

>> 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.
>
> Hmmm.  I thought you were in favor of free markets.  You don't include 
> the currency market in this?

You or I are misunderstanding something here.  Stripping the 
governments of the ability to control the money supply IS freedom of 
currency.  Do you mean international markets?  Those can and should be 
handled by government doing the job of defining the national 
currency...as they all once did, in terms of gold.  One by one, all 
governments abandoned the responsibility of protecting their citizens' 
savings, by going off the gold standard and inflating the currency to 
their own benefit.

> How would you handle international exchange rates?

Once the definitions are made, (e.g., $20 = 1 oz of gold = £5) exchange 
is trivial.

I'm now done on this subject, on the list.  If anyone wants to continue 
the discussion offline, e-mail me privately.  My purpose in all this 
was simply to mention that there is a system of thought in which 
free-market capitalism is not considered evil -- just the opposite -- 
and rights do not conflict.

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





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