Sometimes I wonder if “force” is the underlying motive behind everything?
I know we preach the NAP and that “voluntary association” between people who trade goods and services is the key to humanities success.
But then i wonder what keeps everyone honest in that system?
And it’s not just the capitalist system or the free market system. Every system, even those that lack structure; like cavemen who kill and loot. Is the use (or the threat) of force a fundamental part of life and the universe?
I really don’t have an answer or a theory or even an idea in either direction. I’m just thinking out-loud and expanding on tiny ideas. Maybe i’ll expand more on this later.
One of the reasons I got sorely disillusioned with capitalism is the fact that many capitalists I do know will argue about things like maquiladoras or outsourced factories, saying that they’re great for impoverished people because now they have jobs.
So people n the third world are supposed to be happy putting together your flat screen T.V.s, working menial, repetitive, and sometimes dangerous jobs because it’s better than starving?
Last time I checked, true freedom wasn’t working a laborious job for 30 bucks a week thanks to the generosity of some American capitalist. It was the power and means to seek a full and happy life at any means necessary, and the economic flexibility to find a niche for yourself.
Plus the argument reeks of Western superiority.
Outsourcing factories increases the productivity of labour in the country because it has more capital to work with, increasing the marginal revenue product of labour, and therefore increase the wage rate. Nobody has ever suggested that making TVs in factories constitutes “true freedom” (whatever that’s supposed to mean) except inasmuch as it allows people in those countries to achieve their short and long term goals. Foreign investment is an important stepping stone on the road to prosperity.
If there’s anything that reeks of “Western superiority” it’s people who live comfortable lives condemning the very mechanisms that the world’s poor have of increasing their wellbeing, because those mechanisms don’t adhere to some moronic hippie standard of freedom that only wealthy Westerners can indulge in.
The reason “poor” countries are poor is because they lack the resources, skills, labor force and knowledge (or a combination of those items) that it takes to produce “wealth”. Wealth is the best available goods and services in any particular industry.
Poor countries are poor because they lack two things: #1 they can’t build or produce the top notch goods and services that first world countries can. And #2, they lack the ability to exchange for those goods and services.
What does this mean? It means that if you’re country A and you don’t have any oil, let’s say, but you have computer chip manufacturing, you can exchange and have the best of both worlds. Or if you’re country B and you have oil and computer chips, you’re self-sufficient and can remain a first world country.
3rd world countries need help to either #1 produce these goods and services or #2 find ways to leverage what they can produce to exchange for those goods and services.
Stepping out of an agrarian society (farming) and into an industrial society and eventually into a first world society doesn’t happen overnight. It happens through evolution and education of both a society’s/country’s people and their resources/production methods.
People aren’t going to be born with the ability to code computers or build complex production machines or to be top notch doctors. All of these things take education and effort and input and all of those things take time, money or both (usually both). So that process is slow. It’s hard to leapfrog from one position to the other. It is possible and growth can occur fast, but it can not be instantaneous.
For example, I’m working with a company in the Philippines. the Philippines isn’t the poorest but they aren’t rich, either. They don’t produce their own medical equipment (top notch machines like MRI’s PET/CTs and Gamma Knives) in the Philippines. They don’t know how to, they lack the education and industries to do so. So they have to purchase from other countries like the US or Germany or France. They sometimes buy brand new equipment but usually they buy used, older equipment. Relative to the entire planet, they have decent medical equipment but they don’t have a lot of first world level equipment. However, what they have today is worlds better than what they had a decade or two ago. Today, they are about 5 years behind in cancer medicine, 5 years ago they were a decade behind and 10 years ago they were, more or less, ignorant of cancer technology. They are currently limited by one thing, currency exchange rates. The goods and services that they can produce are still limited in quality and quantity so it’s harder for them to buy better equipment than it is for a place like, say, Chicago, USA.
But they slowly invest the income that they do make from their goods/services and they invest that in resources, infrastructure and in education and they now have Filipinos who are capable of installing, repairing and running the equipment, where as before, they had to bring in foreigners to do all of that work and pay a premium for that labor.
in another decade or so, they’ll perhaps have the ability to manufacture that equipment within their own country and they will no longer need to trade for it. When they achieve this, they will be closer to being on par with the rest of the planet.
This is just one sector of one industry, but this is how all emergent markets grow and come to par with the leaders of the world. They need the education, the application of such knowledge and the resources in order to do so and all of those things come with growth, which takes time.
If you don’t believe me, look at China. What was just a few short decades ago an agrarian land of poor farmers is steadily putting more people into the “middle class” than any other country, and that transformation happens through the industrialization and education of the country. No way around that.
I think my biggest problem with left libertarians or leftists on the economic spectrum in general is that they have a very defined vision of what the future would look like in a “freed market”.
Even if you were to remove government from the economy, leftists seem to assume that everyone all of a sudden becomes an extremely self-driven individual who works independently or with a small group of people. While I definitely think entrepreneurship would increase drastically due to the large number of barriers to entry that exist in the market today people have huge differences in the amount of risk that they’re willing to subject themselves to.
A lot of people enjoy job security and all of the benefits that come with it. Unless it’s your specific job, you don’t have to worry about finding customers. You don’t have to worry about marketing. You don’t have to worry about scaling your business. You don’t have to worry about pricing your product or services. You have one specific task or set of tasks that you’re responsible for on a much larger team. The burden of risk and responsibility you carry is much smaller and that’s extremely appealing to a lot of people. To others, not so much.
Some people love the hustle of starting a business or working for themselves. It’s extremely fulfilling to them and is always keeping them busy. They don’t want to be told what to do. They’re willing to take risks, put their ass on the line, and make decisions that could make or break their venture. One day they’re doing sales, the next day they’re marketing, and the next day they’re doing customer service.
But some people are really passionate about one thing and just want to do that one thing. Graphic design, programming, accounting, whatever. They don’t mind that someone else is giving them their work as long as they’re doing what they love and they get the paycheck at the end of the week.
So yeah, those are my thoughts on leftist economic views and their claims that “selling your labor as a commodity” is “selling your freedom” and the employee-employer relationship is exploitation.
I’d just like to add to this that most people do the “hustle” just so they can get to the point of achieving critical mass and hiring others to take on some of the work load.
Not very many people want to be self-employed just so they can handle all aspects of their business. Most people, while they might be micro-managers, don’t actually have the goal of being a micro-manager.
Most people who set out to start a business (small, mid-cap, large, etc) are usually looking to find people who either believe in their vision or in their products and take it from there. Most of the time, it’s hard to pierce the market and achieve your goals without help. And that help comes via hiring the right people.
I remember that this was actually proven completely false, and someone had the numbers for it. Please advise.
The reality is that “capitalism” works best when people live. Dead people are not very good participators in the marketplace.
As such, it’s in everyone’s best interest to keep as many people alive and capable of making money to spend. It’s also in everyone’s best interest that people keep creating things and the more people and the better the “information” that’s available to people, the better we can produce and the better off we’ll all be.
tl;dr - Dead people can’t buy things. Capitalists like to keep people alive.
Ludwig von Mises
Check out this awesome article from Values and Capitalism: “People-vs-Profits” is a False Dichotomy.
I wished business schools would remind themselves of this. I think b-schools students should be taught Austrian Econ, as a prerequisite
Personally, I’d replace “profits” with “incentives”. People far to often think of profits as purely monetary gains. But some people believe in gains that are not necessarily monetary in nature, such as emotional gains.
There are those that engage in supplying consumers for some sort of emotional gain and that, to them, is the incentive of doing business.
This is where the theories of economics start to diverge with the theories of ethics and philosophy; specifically with the ethics of altruism of David Hume.
Maybe it’s just me, but if we started talking about “income” and “profits” as things that go beyond just monetary gains, maybe we’d attract more individuals to the ideas of capitalism and anarcho-capitalism.
Anonymous asked: I know you're what Americans call "libertarian," so when I see you promote wealth of nations, I am confused... you realize Smith was a Libertarian Socialist, right? He condemns free markets left and right in "Wealth of Nations," and I'm guessing you've never read it?
I guess you can call me a libertarian. I’m a market anarchist or an AnCap or an anarchist or a marketist or a voluntaryist or whatever. To make it easy on you, I don’t believe in the justification of government force.
Why did I post a link “promoting” Wealth of Nations? Because it’s a profound piece of writing, not just for economics, but for government, politics and society as a whole. Even if I completely disagreed with it, I’d still link people to it so that they can read it.
I have copies of Marx and Upton Sinclair in my personal library, not because I’m a communist or a socialist or even because I believe there is some merit to those theories, because I think they are complete bunk. But I’ve read them because it’s important to read them and understand them if I’m going to discredit them and promote my own theories. What point is there in limiting yourself to only reading and studying those works which align with your theories. Confirmation bias much?
Yes, I’ve read Wealth of Nations (Ironically, it wasn’t a voluntary decision at the time) and, no, he does no condemn free markets. If that was your takeaway from The Wealth of Nations, I strongly encourage you to reread it (or actually read it for the first time).
As for Adam Smith being a “socialist”, I’m guessing you derived that idea from reading ‘The Theory of Moral Sentiments’? Or did you come to that conclusion because Smith talked about how earners should pay back to society (which I think many people misunderstand this to mean pay more taxes).
And if you’re as confused and as misguided as this message makes you out to be and as lazy as I suspect you are, you can bypass the 1,000 pages of reading and have P.J. O’Rourke read the book for you:
Part I: http://youtu.be/TWu_1qrwf3E
Part II: http://youtu.be/e7fG6XdDFDU
Thanks for playing,
America is the richest nation in the world. Our GDP was $15.09 trillion in 2012. That is enough money to eliminate extreme poverty worldwide 276 times over. Yet 146 million American’s (half of our population) live in poverty or are ‘near poor’.
#1, I don’t you understand how GDP works and what it actually measures.
#2, American “poverty”. The poorest American lives like a king in comparison to a significant portion of the world.
#3, You’re assuming that simply taking money from people and giving it to others is a way to eliminate “poverty”.
Some of you guys should just stay away (very, very far away) from economics.
Politicians should be required to wear the logo’s of the companies they accept interest money from, like NASCAR drivers.
I can get with this.
Contempt for Capitalism. How A Lack of Understanding Sparked Hatred
This is a prime example of how limited the people are in their knowledge of how wealth is created and how that process is beneficial to all.
What anti-capitalists don’t understand about the advancement and progress of technology, industry and markets is that overtime what once seemed unattainable and luxurious eventually becomes the norm and even sub-par.
People are fairly clued up on how products come to market and we all can see how innovations eventually become cheaper. Your entire analysis misses is the point of the capitalist mode of production and why anti-capitalists have a problem with it.
Why don’t you enlighten us.
Contempt for Capitalism. How A Lack of Understanding Sparked Hatred
A new theme I’ve seen gain popularity among the youth, both in America and in Europe, is a spurning of capitalism that stems from the notion that successful people owning rare or high-priced goods is evil. This is the idea that a select few should not have possessions that the masses don’t also have access to. This is a prime example of how limited the people are in their knowledge of how wealth is created and how that process is beneficial to all.
What anti-capitalists don’t understand about the advancement and progress of technology, industry and markets is that overtime what once seemed unattainable and luxurious eventually becomes the norm and even sub-par. This process is how
People are so blinded by their present-day greed or envy or even disgust that they don’t realize that someday, in the future, what you have a demand for, yet see as unattainable today will eventually become a common good or even an obsolete good.
It’s these volunteer ‘beta testers”, if you will, who put up their own money to buy high-priced yet typically unrefined goods that pave the way and open up markets for more competition, more supply and more efficiency in production (costs, time and price).
Let’s look at some examples:
Automobiles: Only the rich had cars. Then, because the rich actually spent money and smart people entered the industry, cars became affordable and the masses could have cars. We’ve become so accustomed and spoiled by this becoming the norm that some people are embarrassed of their lower-quality cars. 50 years ago, you’d drive around in a beat up Carola like you were a Rockefeller.
Let’s look at something even simpler than a car.
Running hot water: Today, almost everyone in America has running hot water and we’re getting tot he point that almost everyone on the planet has the same. Sure, in other parts of the world, it’s more rare, but let’s focus on America. 100 to 200 years ago, you’d shower once a week, if lucky, in reused, lukewarm water. Today, we take daily is not multiple showers a day.
Thanks to progress, these things have become the norm, yet we don’t appreciate it. And some people, the anti-capitalist crowd, are to stupid to even realize to be taught.
Look at every industry. Look how Airbags and ABS went from only a Mercedes feature, most couldn’t afford. Today, the worst car has 6 airbags and giant breaks. Look at medical advancements. A 100 years ago, the common cold would kill you. But with the advancement and investment by those vilified rich, those that could afford the emergent, cutting edge treatment, today we have tech available for people how have no money that would seem like science fiction for our great grandparents.
Accumulation of funds and the investment of those funds bring about progress. When people who have brilliant ideas and need the resources and the funding to develop them, that’s what advances humanity. That’s what brings progress. Without the ability of market interaction and voluntary investment, everyone would hoard their ideas and their resources and we’d never accumulate short-lived pools of ideas and funding to ever create new wealth for all to benefit from.
Appreciate what you have and understand that overtime, progress touches us all and we all benefit. Don’t hate those that benefit now due to their ability to afford it for themselves. Their high-priced investment today will help bring that product to the masses for cheap in the future, improving the daily lives of all of society’s members and paving the way for demand of newer and better technology. It’s a beautiful cycle that continues to grow and continues to give to all so long as we all appreciate it’s overall impact.
*This was a comment I had posted on another post, but I liked it too much to let it be lost as an obscure comment, so I made it a post.