A couple of days ago, I (sort of) applauded Senator Bernie Sanders. Not for his views, which are based on primitive redistributionism, but because he challenged Republicans to state whether they support capitalism.
And I think it would be very revealing to see which GOPers were willing to openly embrace free markets, hopefully for both moral and economic reasons.
But not let’s look at this issue from another perspective. Why do some folks on the left oppose capitalism?
I suppose there are several answers. Old-fashioned communists and socialists actually thought capitalism was inferior and they wanted the government to directly plan the economy, run the factories, and allocate resources.
Most leftists today admit that central planning doesn’t work and you need a market-based price system, so their arguments against capitalism usually are based on two other factors.
- The rich somehow exploit the poor and wind up with too big a slice of the economic pie. The solution is high tax rates and redistribution.
- Capitalism is inherently unstable, causing painful recessions. The solution is to have lots of regulations to somehow prevent bad things.
I think both those arguments are misguided since the first is based on the inaccurate presumption that the economy is a fixed pie and the second overlooks the fact that government intervention almost always deserves the blame for downturns and panics.
Today, though, I want to focus on a new argument against capitalism. Some guy named Matt Bruenig recently argued in the Washington Post that capitalism is coercive.
I’m not joking. This wasn’t parody. He really is serious that a system based on voluntary exchange is anti-freedom.
Here are some excerpts from his column.
Capitalism is a coercive economic system that creates persistent patterns of economic deprivation. …it is well established that capitalism is fundamentally built upon threats of force. …When the physical resources necessary for production are privately held in the hands of very few, as in the United States, the majority of the population is forced to submit itself to well-financed employers in order to live.
And how does he propose to deal with the supposedly coercive nature of capitalism?
Simple, the government should give everybody money so they don’t have to work
To secure freedom and prosperity for all, it may ultimately be necessary to supplement the welfare state with a universal basic income — a program that would provide all citizens with a basic level of financial support, regardless of whether they’re employed. …no amount of labor regulation can ever undo the fact that workers are confronted daily with the choice between obeying a supervisor or losing all their income. The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that working-age adults, at least, have some way to support themselves whether they work or not.
Wow.
I don’t suppose Mr. Bruenig has thought through what happens if too many people decide to stop working so they can live off the “universal basic income.”
Call me crazy, but I suspect the number of people riding in the wagon would exponentially expand while an ever-growing share people pulling the wagon would decide to “go Galt.”
Of course, some leftists are smart enough to realize that somebody has to produce before the government can redistribute.
But anybody capable of writing these sentences obviously isn’t moored to reality.
True freedom requires freedom from destitution and freedom from the demands of the employer. Capitalism ensures neither, but a universal basic income, if successful, could provide both.
While he’s at it, why doesn’t he wave his magic wand so every little boy can play major league baseball and every little girl can have a pet unicorn?
I’ve previously expressed skepticism about the notion of a government-guaranteed income. The fact that Mr. Bruenig thinks it’s a good idea is confirmation that this idea should be rejected.
P.S. I have a Moocher Hall of Fame to celebrate disreputable deadbeats and a Bureaucrat Hall of Fame to highlight overpaid and underworked civil servants. Maybe it’s time to have some sort of Hall of Fame for statists who say make really bizarre arguments. Mr. Bruenig could join Mr. Murphy, Ms. vanden Heuvel, and Mr. Yglesias as charter members.
[…] puzzled by those who criticize capitalism (“it’s unfair!” and “it’s coercive!”) and urge its overthrow or […]
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Reblogged this on kommonsentsjane and commented:
Reblogged on kommonsentsjane/blogkommonsents.
For your information
kommonsentsjane
[…] because it is bizarre. But it’s not new. It’s the crazy idea of “positive liberty” that was the basis […]
[…] puzzled by those who criticize capitalism (“it’s unfair!” and “it’s coercive!”) and urge its overthrow or […]
[…] puzzled by those who criticize capitalism (“it’s unfair!” and “it’s coercive!”) and urge its overthrow or […]
[…] because it is bizarre. But it’s not new. It’s the crazy idea of “positive liberty” that was the basis of FDR’s […]
[…] it is bizarre. But it’s not new. It’s the crazy idea of “positive liberty” that was the […]
[…] the policy wonk who claimed that capitalism is actually coercion, even though free markets are based on voluntary exchange. Or […]
[…] the policy wonk who claimed that capitalism is actually coercion, even though free markets are based on voluntary exchange. Or […]
[…] the leftist policy wonk who claimed that capitalism is actually coercion, even though free markets are based on voluntary exchange. Or […]
[…] the leftist policy wonk who claimed that capitalism is actually coercion, even though free markets are based on voluntary exchange. Or […]
Why 100%?
That can be funded without increasing current expenditures if you include current tax deductions as an expense, which is appropriate since the guaranteed income will replace tax deductions for that portion of the population earning income.
Less than 100%, would require that the federal government would have to retain some level of welfare support and the attendant bureaucracy.
Progressivity – above
Currently, according to a CATO study, many states offer +200% of the poverty line in nanny benefits. I think we can agree that that creates a disincentive to work.
The purist libertarian approach of no redistribution would leave many destitute, since government involvement has wiped out many of the charitable support groups that existed around 1900 and the mindset of those with money has changed regarding charitable contributions.
So the question left to us is whether we stick with the current means-tested support systems, with its 700,000 in federal support staff, all the disincentives, and our horrible tax code; or we move to a flat tax and a guaranteed income set at 100% of the poverty line.
Granted, those are two extremes, but you cannot move to a flat tax without addressing welfare and progressively in the effective tax rate for lower incomes. Current proposals to “simplify” the existing tax code or to modify welfare are a waste of time.
Regarding the “Capitalism is inherently unstable” comment by libs: The world is inherently unstable. Capitalism and the pricing system are stabilizing counter-forces. If supplies are scarce prices go up and capitalists step in to find new sources or alternatives. If in surplus, prices go down and new uses are found for the surplus.
“If I don’t like my job, I can quit. Maybe I’ll have to struggle to pay the bills until I can get another job, but the boss can’t send men with guns to throw me in jail and seize my property if I complain about the job.”
A corporation can do something equivalent in terms of results. It can close a factory and lay off thousands of workers, many of whom will eventually lose their property because they can’t pay their mortgage. Some of them might resort to criminal activities to feed their families and will end up in jail. It can have a devastating impact on a community but corporate power is not accountable to the community, it’s only accountable to shareholders. That’s why in countries that are commonly called democratic, like the US for example, corporate power is more coercive than state power which is at least theoretically accountable to the public .
And in those countries, corporate power and state power mostly work hand in hand, the former using the latter to implement policies which serve its interests at the expense of the majority of the public. It’s hypocritical to ignore that and then scream coercion when state power is used to implement policies which benefit the majority of the public.
Can you address the claim about infinite growth being unsustainable on a finite planet?
“What if I tell the government that I don’t want to pay these taxes or obey their rules? Do they just say “oh, okay then”?”
Ever notice that’s how “private” property works? If you drive off in my car without my permission, the STATE sends men with guns to force you to give it back. Private property is publicly enforced. That’s why taxes in the first place.
Oh, I get it. You want the State’s protection of your private property but you don’t want to pay for it. Moocher. You want to drink all the wine and leave the hangover for somebody else to endure.
It’s a slippery slope, you know. Once you accept the principle of state coercion to enforce private property and the principle of paying for that coercion through taxes you can’t turn around and say that taxation is coercion EXCEPT when it is taxation to pay for coercion that benefits you. Moocher.
I’m sure that under such system everybody will work with enough enthusiasm to outcompete the remaining seven billion of this planet … and thus keep the American middle class in the world’s top three-five percent.
And where will the money come from to provide this universal basic income? I presume through taxes or something that he calls by another name but that is still taxes. And how will the taxes be collected? What if I tell the government that I don’t want to pay these taxes or obey their rules? Do they just say “oh, okay then”? Or do they send men with guns to force me to pay the taxes and obey the rules. And at that point, which system is more coercive? If I don’t like my job, I can quit. Maybe I’ll have to struggle to pay the bills until I can get another job, but the boss can’t send men with guns to throw me in jail and seize my property if I complain about the job. The government can and does do exactly that.
“We have to stop them before they completely destroy us.”
Love the satire! Intentional or unintentional?
I suggest you read “Coercion and Distribution in a Supposedly Non-Coercive State,” by Robert L. Hale, Political Science Quarterly, Vol. 38, No. 3 (Sep., 1923), pp. 470-494.
Not that you will. Just thought I’d mention it.
[…] « Profound Thoughts from the Left: Up Is Down, Night Is Day, and Capitalism Is Coercion […]
These people will not be happy until all small business owners are hanging from trees. They do not care about the facts. They are so bitter and filled with envy and hatred you cannot reach them. We have to stop them before they completely destroy us.
What an incredible luck have those Americans had over the last couple of centuries!
Having elevated the American Middle class into the world’s top three, five percent, while following the worst capitalist policies all along! Amazing luck indeed!
With such incredible luck, imagine where Americans would be had they embraced more socialism / coercive collectivism.
There is a strong probability we will find out, since a growth trendline that is half the world average quickly compounds a country into the middle income nation group on the world stage.
America’s middle class stagnant prosperity level (which becomes all the more glaring against the backdrop of a world average rising at four percent) is exactly this process of decline, this process of being absorbed into the world average, which Americans are living through in our current age.
As Americans reject capitalism and revert to a more average world mentality, it is inevitable that their prosperity levels will follow the same fate: Converge to the world average. With a growth advantage of two percent every year, the rest of the world will quickly catch up to Americans. The once leaders, whose old capitalist tendencies made them once grow at double the world average for over a century, will have been absorbed into mediocrity.
This transformation is all inextricably connected to the flatter effort-reward curves that are the main theme of HopNChange. There is no exit from this path.
It’s hard to tell which is the chicken and which is the egg. Is it the voter-lemming instinctively seeking HopNChange, or is it HopNChange transforming the voter into a lemming? It’s largely irrelevant. The two are proceeding in tandem into decline. Into being absorbed into the world average. Of course, Americans will be neither the first, nor the last nation to raise the flags of coercive collectivism and squander past advantage in such a spectacular way.
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