Sticks and Stones and All That

Vulgar Politics
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You can always count on The Huffington Post for ridiculous ideological one-upmanship. Latest case in point? A short piece on Tim Kaine:

DNC Chairman Tim Kaine took to the National Press Club on Wednesday to gloat about the showing of Democrats in primary contests the night before. In the process he offered the usual platitudes: the party was rewarded for offering solutions to the economic malaise; enthusiasm is up as evidence of turnout in the Kentucky Democratic primary; Republicans find themselves in an ideological civil war, with Tea Party candidates knocking out establishment candidates, and so on.

The most interesting (least spun) tidbit of wisdom, however, came when Kaine was asked to address the common conservative complaint that the Obama administration represents socialism in disguise. Had the label hurt the party or the president, a questioner wanted to know.

“People love to throw label around and I think for most thinking Americans, throwing that label around actually doesn’t hurt us,” Kaine replied. “It suggests an extremism and an ideological rigidity that isn’t where most Americans are. We are problem solvers.”

Most Americans are problem solvers, or are just the Democrats?

“A party that just relies on throwing labels around and refusing to cooperate, they might get a headline but they won’t get support of people,” he added. “We are going to promote smart solutions to these problems and If the other guys want to rely on labels rather than roll up their sleeves and actually help us govern a nation at a time when governance is needed — it is an abdication of responsibility but they are not going to help their case by doing that.”

Really? I mean, really? Is any of this credible?

Sure, “socialism” is an over-used taunt. The “we’re all in this together” intent of socialist doctrine is missing from the ultra-big-government “smart” solutions that Democrats push. It is more like what Democrats have long accused the Republicans, of supporting “free markets for the poor, but socialism for the rich” (a not-very accurate description of the services available for the poor, or the habits of many of the rich), only turned on its head: The socialism of the Democrats is a “socialism of the well-connected and the ‘too big to fail,’” leaving the rest of us with a hobbled market.

But, hey, I am on record as deprecating “socialism” in most modern cases for “dirigisme,” or what Mises called “interventionism.”

So I agree with Kaine, right?

Wrong.

…

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Capitalism, Socialism, and Libertarianism

Statism, The Basics
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There’s been a good deal of debate recently in libertarian circles about the word capitalism. Is it compatible with libertarianism? A synonym for it? Should we use it? For example:

As some of my posts linked above indicate, I find this debate extremely frustrating because the nature of the debate is rarely made clear. In that respect it is reminiscent of the interminable debates over gay marriage and thick v. thin libertarianism. On the gay marriage issue, it’s often the case that the arguments of gay marriage opponents boils down to opposition to the word marriage being used by the state in the caption in the statute, though they usually won’t come clean and admit it. In my view (not shared by all my co-bloggers at TLS), the thick-thin paradigm adds nothing of substance and is used to equivocate–engaging in non-rigorous argument about what “libertarianism” “is” semantically and then using this to argue for one’s particular substantive positions; it’s like trying to prove that marriage implies slavery or wife-ownership because the word “my” is used in “my wife.”

The libertarian opponents of “capitalism” often engage in equivocation, I believe. If challenged they say they are just opposed to the word, as if this is a semantic or maybe tactical/strategic issue. But because of confused leftist beliefs, many of them are actually opposed to aspects of the underlying social order that we anarcho-libertarians refer to as (non-corporatist) “capitalism”–the modern industrial free market. They oppose “absentee ownership” (see my post A Critique of Mutualist Occupancy), favor localism and self-sufficiency, are leery of the division and specialization of labor, buy into Marxian ideas about “alienation” and “labor”; they accuse standard libertarians of putting undue stress on “capital” while they do the same with “labor” and “the workers”; some flirt with crankish Georgist ideas, and so on. Some of the opponents of the word “capitalism” seem to have genuine strategical or even semantic concerns, such as Sheldon Richman, instead preferring the term “free market.” But some of them seem to oppose even this term–preferring instead the bizarre and annoying term “freed market,” or outright opposing the word “market” in the phrase “free market” (see Markets vs Free Markets). …

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Capitalism is the Greatest Achievement of Human History — Praise It

(Austrian) Economics
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I am grateful that we have capitalism to the extent that we in fact do have it — and although we certainly don’t have enough capitalism, I am grateful for how much we actually do have. Everything we have in the modern civilized world is only possible due to capitalism and the accumulation of capital. It is the natural expression of free markets whenever there is a sufficient level of civilization. The accumulation of capital is essential for the progress of civilization in all aspects. Technological progress alone is insufficient. While capital accumulation has occurred to various extents throughout history, the system of capitalism is a more recent development allowing for much more efficient capital accumulation and development.

It is actually quite incredible to think of how much prior civilization, technological progress, and accumulated capital are necessary to make something as simple as a screw. Even with the instructions and all relevant knowledge, primitive people wouldn’t be able to make them for at least decades, possibly centuries. When you think about the precise dimensions of something as simple as a screw, you realize it obviously required something very precise to make it (e.g., precise casting). And that thing required something precise to make it, and so-on and so-forth. It is a process of building up more and more sophisticated tools from simpler ones, which requires significant capital accumulation.

It is also doubtful that many people, if any, know the entire production process — from raw earth materials to finished product — for even something as simple as a screw. Its production requires the voluntarily cooperative interactions of numerous people. Furthermore, as my friend Juan Fernando Carpio has argued in a forthcoming paper, the human mind and body are both capital goods, which require development. The entirety of human knowledge, considered in the abstract, is akin to the accumulation of capital goods. To the extent that we have civilization, such is only possible because of the accumulation of different kinds of capital.

This is something ignored by socialists of every variety, be they anarchist or Statist socialists. (I would argue that an anarchist socialist will, when faced with the reality of how free people actually act, either have to at least tacitly endorse private property and capitalism, or will become a Statist). The various systems advocated by socialist anarchists all hinder or make impossible capital accumulation. For example, various flavors of anarchist socialism might attempt to ban — how can they do this while remaining anarchist? — absentee ownership or the separation of ownership and control (i.e., corporations). The banning of either would result in rising time-preferences and thus greatly decrease incentives for saving and capital accumulation.

Some Suggested Readings

Ludwig von Mises, 2008 [1956]. The Anti-Capitalistic Mentality. Ludwig von Mises Institute, Auburn, AL.
Reisman, George. 2002. “Some Fundamental Insights Into the Benevolent Nature of Capitalism“. Mises Daily. October 24.
Rothbard, Murray N. 2009. “Capitalism versus Statism“. Mises Daily. September 29.
Leonard E. Read, “I, Pencil,” The Freeman, December 1958.

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