Capitalism

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Introduction to Socialism vs Capitalism

January 21, 2010 in Capitalism by Greg | 5 comments

Part 1 of 1 in the series Socialism vs Capitalism

While this blog was being formulated, there seemed to be little debate over which type of political economy should be dominant in the United States. In fact, the economic policies of the major political candidates at that time seemed to differ from each other only by degree in terms of government intervention in the economic affairs of citizens.1 This eventually led to the series Notes on Socialism which explores that topic from a religious, social, economic and historical point of view.

Das KapitalOver time, however, it was pointed out that the U.S. economy had really undergone many changes and had passed through various stages of government intervention to what Charlotte Twight called a Participatory Fascism-type system. During this time, some have stumbled upon the site and wondered about the other side of the proverbial coin. For example, what, if anything, does capitalism have to offer?

This series of posts explores a similar set of issues related to capitalism. At first, it might not be apparent why there should be a series called Socialism vs. Capitalism. The question might be asked, Why not just discuss capitalism on its own terms? The short answer is that the term capitalist (Kapitalist) was popularized in the mid-19th century and was used frequently by Karl Marx and Friedrich Engels in some of their later writings.2

Over time, the term capitalist came to refer to someone with private ownership of capital and the means of production. Interestingly, some have noted that capitalism is really “a term of disparagement coined by socialists in the mid-nineteenth century, [and] is a misnomer for ‘economic individualism’, which Adam Smith earlier called ‘the obvious and simple system of natural liberty.’”3

From a Hegelian Dialectic point of view, capitalism is the thesis in which socialism is the antithesis. Based on this perspective, these two systems are at constant odds with each other and as proponents of each system seek preeminence, new syntheses4 are created as societies “supposedly” continue to evolve.

So it is within this dialectical context that both series – Notes on Socialism and Socialism vs. Capitalism – should be considered. Capitalism simply cannot be discussed without exploring socialism and vice versa. And although today’s political discourse seems to portray choices based primarily along these two seemingly competitive political economies, perhaps there is a third way – or better yet, other ways – that should be considered and become part of public debate.

Sources:

  1. For example, see Ekelund, Robert B. and Mark Thornton. “More Awful Truths About Republicans”. 4 Sep 20008. Ludwig von Mises Institute. 19 Jan 2010.↩
  2. For example, the phrases capitalist and capitalist mode of production appear more than 2,600 times in Das Kapital. See “Capitalism”. Wikipedia. 19 Jan 2010.↩
  3. Hessen, Robert. “Capitalism”. Library of Economics and Liberty. 19 Jan 2010.↩
  4. For example, the development of Market Socialism.↩

Federal Reserve and the Constitution

January 15, 2010 in Money by Greg | 1 comment

Part 2 of 1 in the series Paper Money

Congressman Ron Paul (R-Texas) wrote about the role of the Federal Reserve in relationship to the Constitution. After providing a brief U.S. history lesson of the debate over paper money, its attendant danger of inflation, and the role of a central bank in society, he wrote:

Federal Reserve global tentacles The lack of respect for the Constitution even in the nineteenth century set the stage for the Federal Reserve Act of 1913. Fear, misinformation, and ignorance allowed government to ram bad policies down the throat of the American people. This is not unlike giving the president authority to go to war and to bail out those least deserving help in an economic crisis. The rationalization that the state’s interest supersedes the interests and the rights of the people is embedded in the arguments as to why the American people had to go along with those who hate commodity money and love central banking.

The Fed was established as a result of the public and banking clamor for an elastic currency, and an elastic currency is nothing more than one that can be arbitrarily increased in volume at the discretion of the monetary managers. Sometimes they argue over who exactly will have the authority to do so, the central bank or Congress or private banks themselves. Increasing the supply of money and credit is the proper definition of inflation, meaning that when the demands were heard for an elastic currency, all they were looking for was a legal right to inflate the currency for the benefit of whatever special interests they were concerned for at the moment.

Noble intentions are always used to justify the inflation, but the real reasons are far more sinister. Those who get the control over the money are the beneficiaries, not the people as a whole.

Economist John Maynard Keynes, before he became the champion of inflation, wrote quite correctly of the grave danger of inflation. Like Greenspan, he changed his tune as the years moved on. Keynes stated in his book The Economic Consequences of the Peace:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.1

Federal Reserve and the Constitution »»

  1. John Maynard Keynes, The Economic Consequences of the Peace (New York: Harcourt, Brace, 1920), pp. 235-236.↩

Introduction to Notes on Socialism

January 10, 2010 in Socialism by Greg | 6 comments

Part 1 of 11 in the series Notes on Socialism

The following is an introduction to the series of notes on socialism. Its companion series is Socialism vs Capitalism and if possible, should be read together to get an understanding of these two competing political economic theories.

This series began as an investigation into the roots of modern socialism. Many trace its “origins in the French Revolution of 1789 and the changes brought about by the Industrial Revolution.”1 In fact, the term “socialism” is often “attributed to Pierre Leroux in 1834, who called socialism ‘the doctrine which would not give up any of the principles of Liberty, Equality, Fraternity of the French Revolution of 1789.’”2

The Law of Consecration and Socialism Compared

Zion’s Cooperative Mercantile Institution From a religious perspective, socialism is of interest to members of The Church of Jesus Christ of Latter-day Saints because it bears some similarities with various attempts by the Church to implement the “law of consecration”. For example,

The Lord revealed several purposes for the law of consecration: to bring the Church to stand independent of all other institutions (D&C 78:14); to strengthen Zion, adorning her in beautiful garments, as a bride prepared and worthy of the bridegroom (D&C 33:17; 58:11; 65:3; 82:14, 18; etc.); and to prepare the Saints for a place in the Celestial Kingdom (D&C 78:7).

Commenting on this subject, President John Taylor stated that consecration is a celestial law and, when observed, its adherents become a celestial people (JD 17:177-81). Thus, men and women today can become like as those of Enoch’s day, “of one heart and one mind,…with no poor among them” (Moses 7:18). Orson Pratt, an early apostle, observed that if the Lord’s people aspire to the Celestial Kingdom, they must begin to learn the order of life that is there (JD 2:102-103).3

Since Zion designates both a place of gathering4 and an ideal society where “the pure in heart” live in harmony5, it bears many resemblances to utopian societies – real and imagined – of the past.6

Continuing, John A. Widtsoe, an apostle, explained how the law of consecration was implemented in the early Church:

Introduction to Notes on Socialism »»

  1. “History of Socialism”. Wikipedia. 9 Jan 2009.↩
  2. “Socialism”. Wikipedia. 9 Jan 2009.↩
  3. Hirschi, Frank W. “Law of Consecration”. 1992. Encyclopedia of Mormonism. 9 Jan 2009.↩
  4. See the post the Redemption of Zion.↩
  5. Sorensen, A. Don. “Zion”. 1992. Encyclopedia of Mormonism. 9 Jan 2009.↩
  6. Nibley, Hugh W. “The Utopians.” Neal A. Maxwell Institute for Religious Scholarship. 9 Jan 2009.↩

Pravda on American Capitalism

June 11, 2009 in Capitalism by Greg | 6 comments

Thanks to Beetlebabeee at Beetle Blogger, I came across the article below in Pravda on the downfall of American capitalism.1. Here is a Russian’s perspective on America’s slide toward Marxism:

It must be said, that like the breaking of a great dam, the American decent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.

Dollar Sign Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.

First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas then the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a BurgerKing burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.

Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, but when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America.

The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America’s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Wiemar Republic and at worst Zimbabwe.

Read the rest of this entry »

  1. Beetlebabee. “Yes We Can Be – A Communist Nation”. 4 June 2009. Beetle Blogger. 11 June 2009.↩

General Motors Bankruptcy

June 3, 2009 in Business by Greg | 6 comments

General Motors Corp. filed for bankruptcy and became the second-largest bankruptcy in U.S. history. According to the Wall Street Journal:

President Obama defended his decision to take a majority stake in GM, saying it was unavoidable and temporary. “We are acting as reluctant shareholders,” he said in a televised address.1

2006 GM TEN Event - Stacy Keibler The story went on to state:

Some Republican lawmakers called the move another sign of the administration’s deepening incursion into the private sector. And the risk remains high that the administration or Congress could meddle in the company’s day-to-day affairs, an experience familiar to banks that took government bailout cash last fall.

Since it was reported that General Motors approached the government about a possible bailout2, this scenario reminded me of the following quote about how business leaders often seek government to intervene for the so-called “public good”:

Businessmen have done more than their full share to foster the active regulatory state from its very inception. Consider William Simon’s recent description of the relation of business and government as he witnessed it during his tenure as Secretary of the Treasury in the 1970’s:

“I watched with incredulity as businessmen ran to the government in every crisis, whining for handouts or protection from the very competition that has made this system so productive. I saw Texas ranchers, hit by drought, demanding government-guaranteed loans; giant milk cooperatives lobbying for higher price supports; major airlines fighting deregulation to preserve their monopoly status; giant companies like Lockheed seeking federal assistance to rescue them from sheer inefficiency; bankers, like David Rockefeller, demanding government bailouts to protect them from their ill-conceived investments; network executives, like William Paley of CBS, fighting to preserve regulatory restrictions and to block the emergence of competitive cable and pay TV. And always, such gentlemen proclaimed their devotion to free enterprise and their opposition to the arbitrary intervention into our economic life by the state. Except, of course, for their own case, which was always unique and which was justified by their immense concern for the public interest.”

One wonders whether anyone – with the possible exception of a few right-wing ideologues – any longer supports the free-market system as an inviolable desideratum; whether anyone is willing to bear its costs in order to preserve its benefits. Talk is cheap, and accordingly business people often talk as if they favor capitalism. But the blatant hypocrisy of their rhetoric suggest that it is either a political device, deliberately employed as part of a “public relations” strategy, or a mindless reflex inherited from the past and readily abandoned when it seems incompatible with short-run gain.3

What’s your view point?

Should the U.S. government continue to intervene in free-enterprise?

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Sources:

  1. King, Neil, Jr. and Sharon Terlep. “GM Collapses Into Government’s Arms”. 2 June 2009. The Wall Street Journal 3 June 2009.↩
  2. Rasmussen, Scott. “Americans Have Voted ‘No’ on GM Bailout From Day One.” 1 June 2009. Rasmussen Reports. 3 June 2009.↩
  3. Higgs, Robert. Crisis and Leviathan: Critical Episodes in the Growth of American Government. Oxford: Oxford University Press, 1987. 243.↩

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