Sunday, September 11, 2005

How it's Seen in Phoenix - by one person at least

In an (short) article: “Capitalism v. Socialism” ( 10 September 2005, a writer ‘sundex” opines:

“Pure capitalism assumes no limitations or restrictions on the economic forces of commerce. This state of affairs is unachievable except in the untamed minds of the uneducated.”

Comment: OK. Acceptable observation.

“As history will tell us, when the limitations on commerce are relaxed, there is a corresponding increase of commercial attempts to control the market to the benefit of the commercial stakeholder.”

Comment: Very good in general; all depends, of course, on which ‘limitations’ are relaxed. But it broadly agrees with Adam Smith that ‘merchants and manufacturers’ tend to be against competition and the best remedy for that is not to pass laws or regulations assisting in limiting competition. Beyond that it is down to cases.

“We saw this in early America, with robber barons reeking havoc on competitors, property owners, and anyone else who got in the way. We also saw this in pre-Marxist European society, when business interests shamelessly employed entire families at subsistence wages for the sake of profitable enterprise.”

Comment: Fair enough as an observation; bit concerned at the designation of “pre-Marxist European society”. To what exactly does this refer? Which countries is ‘sundex’ including? Is it reflecting that peculiar political view, found in North America (I’ve heard it said as far north as Toronto) that Europe is ‘socialist’ and only in North America (exceptions are sometimes insisted upon to exclude Canada) do we find ‘capitalism’?

More to the point: the exploitation of workers and their families was not confined to capitalist ‘business interests’; the communist states continued the exploitation of workers and their families and used the ‘surpluses’ (a.k.a profits) for the benefit of the communist apparatchiks and their families.

“The absolute, natural effects of the unseen hand of Adam Smith cannot possibly occur.”

Comment: This is the most inappropriate sentence in the article. For a start, Smith never said anthing about capitalism. I presume ‘sundex’ is referring to the usual guff about the ‘invisible hand’ and its extended meaning found in US academe, and passed on through the generations. That is a set of meanings given to it and not representative of Adam Smith’s views at all (see several posting on this Blog for last week for the actual history of Smith’s use of Shakespeare’s metaphor from Macbeth (3:2 – ‘thy bloody and invisible hand’). Ultra briefly: it had nothing to do with markets.

A paragraph or so after this wrong statement, ‘sundex’ ends his article with the briefest of sentences about socialism and a blast at ‘inherited wealth’, so we cannot follow up on what socialism means, of why we should be afraid of inherited wealth, or who should get that wealth instead (hopefully, not the State).


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