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Capitalism is the extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all. – John Maynard Keynes
An economic crisis looms. When the brown matter hits the proverbial fan, the blue-check commentariat will blame “capitalism.” So we have to remain vigilant.
In fact, they’ve already started.
I use scare quotes because so few clearly define what “capitalism” is, and fewer still know how it works. Particularly when they use the F word.
As with neoliberalism, “capitalism” is more or less a smear used by those who hate that which they neither understand nor have a hand in creating. Ignorance as a rhetorical strategy works mainly because the masses have become more credulous and ignorant with each passing year. Critics simply have to indicate some socio-economic phenomenon they don’t like and blame the c-word.
Intervention, the C Word, and the F Word
When I use capitalism I have a specific set of features in my mind, as we’ll see. Because capitalism is Marx’s term, we could use other less loaded words, such as entrepreneurial markets. But these can come across as esoteric or imprecise. Detractors frequently have something else in their minds, and there is no incentive to determine any common reference frame. Sometimes their very identity is caught up in being anti-capitalist. It’s one thing to challenge their positions. It’s quite another to challenge their identity.
What’s worse, the politically powerful actively destroy the ideal features of an entrepreneurial market system, often to compromise with anti-capitalists. They then blame capitalism for every failure of intervention. This process began long ago. Now, the best we can say is interventionism creates ideal conditions under which corporations and authorities may collude. And boy they do. The extent to which entrepreneurs ally with government officials is the extent to which the system becomes less capitalist, less liberal, and more corrupted by degree.
But what beast does this corruption spawn?
Intervention gives rise to either cronyism or fascism. The difference between cronyism and fascism lies only in the authorities’ objectives. Cronyism is designed to shore up the incumbency of individual politicians. Fascism is more about directing the interests of corporations to authority’s ends on behalf of the so-called national interest, and cronies benefit anyway.
Author David Boaz points out this inconvenient truth when he writes:
On May 7, 1933, just two months after the inauguration of Franklin Delano Roosevelt, the New York Times reporter Anne O’Hare McCormick wrote that the atmosphere in Washington was “strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan.… America today literally asks for orders.” The Roosevelt administration, she added, “envisages a federation of industry, labor and government after the fashion of the corporative State as it exists in Italy.”
Don’t today’s progressives envisage a federation of industry, labor, and government?
Ain’t it funny that those who are so quick to call others fascist are in full-throated support of authorities directing corporations to do the state’s bidding? Like Keynes, they justify this vaguely in terms of the “national interest” not the rights of the individual. And Mussolini agrees:
Anti-individualistic, the Fascist conception of life stresses the importance of the State and accepts the individual only in so far as his interests coincide with those of the State, which stands for the conscience and the universal, will of man as a historic entity. It is opposed to classical liberalism which arose as a reaction to absolutism and exhausted its historical function when the State became the expression of the conscience and will of the people. Liberalism denied the State in the name of the individual; Fascism reasserts The rights of the State as expressing the real essence of the individual. And if liberty is to he the attribute of living men and not of abstract dummies invented by individualistic liberalism, then Fascism stands for liberty, and for the only liberty worth having, the liberty of the State and of the individual within the State.
Whether that means threatening social media companies to silence dissent, mandating experimental vaccine products, or rewarding banks for their risky behavior, the real fascists get off scot-free.
If that weren’t enough:
Fascism entirely agrees with Mr. Maynard Keynes, despite the latter’s prominent position as a Liberal. In fact, Mr. Keynes’ excellent little book, The End of Laissez-Faire (1926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud.
Thus, we can no longer allow people to blame capitalism for fascism, particularly when unwitting fascists advocate for these policies. So when it comes to playing the blame game for the next major crisis, we have to call a spade a spade—courageously, consistently, and unrelentingly.
A More Perfect Capitalism
But first, we need to identify some of the main features of capitalism.
- Requires private ownership of the means of production, including extensive property rights in land, capital, and profits.
- Involves patterns of production and trade in which any collaborative venture (however organized) earns revenues in excess of costs due solely to customers’ willingness to pay.
- Includes legal agreements that allow founders, workers, and investors to cooperate in service of a mission. (Such agreements can include worker cooperatives.)
- Operates according to agreements between or among parties to exchanges.
- Includes arbitration systems based on the Common Law, in which parties settle disputes where injured parties can be made whole.
Capitalism also means a highly competitive system defined by the absence of state intervention.
- To the extent they exist at all, governments should function as referees neither subsidizing nor taxing organizations.
- To the extent they exist at all, governments leave individuals to pursue their associations freely, so long as those associations are peaceful.
- To the extent that government or private courts making rulings, their rulings should be restricted to adjudicating frictions between parties, identifying sources of injury or contract violation, and determining/enforcing fair recompense.
- To the extent state regulations exist, these become the product of impartial courts who make decisions based on evidence and case law, not statutes nor fiat regulations.
- To the extent state-sanctioned central banks exist, their role should be limited to ensuring sound and relatively stable money.
Some will argue that the above list is too Utopian–that is, it’s not politically feasible to discard the topheavy layers of our intrusive bureaucracies and their corporate supplicants. That might be true but that also means the system we have ain’t capitalist.
That’s Not Capitalism
Remember, interventionists will blame capitalism for the problems of interventionism, especially if the intervention involves corporations.
- When legislators shut down businesses for months based on COVID histrionics and then pass five pork-laden “emergency” spending bills with money the government doesn’t have, none of that has to do with capitalism.
- When Marxist professors blame capitalism for inflation, we have to remind them that money printing causes inflation, which is not a feature of capitalism per se. Instead, central banking is the government’s legal counterfeiting scheme that benefits the powerful.
- When Central Banks engage in quantitative easing, interest rate manipulations, capital controls, or yield curve inversions, that’s not capitalism. It’s been progressive technocracy since 1913.
- When a President first tightens the screws on domestic energy production – all while blaming our enemies for “price hikes” compounded by the economic sanctions he ordered – that’s not capitalism. (Note Putin’s invasion of Ukraine is not capitalism either.)
- When a President fails to reform a government sanctioned and subsidized student loan scheme, but forgives the debts of those adults who freely chose to avail themselves of that scheme (sending the rest of us the bill), that’s not capitalism.
The problems we must now face flow from politicians and central bankers trying to stick their (visible) hands into our economic ecosystems, which they refer to as interventionism—i.e.managing the mixed economy. (Keynesianism will also do.)
“These two systems, capitalism and collectivism,” writes economist Sandy Ikeda, “organized according to two diametrically opposite principles — spontaneous order and deliberate design — mix as well as oil and water.”
No wonder it’s hard for people to disentangle market failure from government failure.
“Trying to blend them,” adds Ikeda, “produces chaos because it’s impossible to combine two contradictory organizing principles into a coherent system.”
You can see how easy it is to blame the failures of the mixed economy on capitalism. Indeed, to the extent “neoliberalism” is the incoherent doctrine of the mixed economy, we might one day find common cause with those who bandy that term about unreflectively.
But I doubt it.
Most of what passes for commentary about economics today amounts to bleating from herds who think that the cure for every social ill is to tax more resources from the billionaires or the corporations. But as our friend, economist Antony Davies, reminds us,
The 550 U.S. billionaires together are worth $2.5 trillion. If we confiscated 100% of their wealth, we’d raise enough to run the federal government for less than eight months. (Updated figures might get you to nine months, says Politifact.)
Of course, if the state succeeded in such confiscation, it would be catastrophic.
Government Debt and Intervention
The problem isn’t capitalism. The problem isn’t greed per se–or maybe it is. Too many people want to live at others’ expense or charge the national credit card, which – at 138 percent of GDP plus unfunded liabilities – is maxed out.
So when it comes to laying blame, we have to start getting more specific. Yes, there are bad individual actors, bad corporate actors, and bad government actors. But instead of blaming entrepreneurial capitalism, which is just a system for people sustainably to serve each other, it’s time to blame those who keep intervening to “save capitalism” or those who keep trying to save us from capitalism. And it’s time to blame those whose failures of imagination always end up in one of interventionism’s ideological ditches: regulation or redistribution.
The trouble with interventionism is that you can’t have it in any form without bundling in some measure of fascism. That’s because these two ideologies are kissing cousins. Unless the people regulate the government and redistribute its power back to individuals, we will lurch from crisis to crisis that interventions cause. And our fascist/socialist enemies will just double down.
Article cross-posted from AIER.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
