MUST READ EDITORIAL FOR ALL SCIENTISTS

Trurll at ix.netcom.com Trurll at ix.netcom.com
Wed May 20 12:21:19 EST 1998


Jeffrey Haber wrote:
> 


> You cannot have capitalism without a free market; it is implicit in the
> definition of capitalism that the government is not regulating the
> economy.
> 

So anyway - there is nothing in the definition of Capitalism that
depends upon the existance of a free market.  Microsoft may make itself
the sole producer of software in the country and prevent any other
software from being marketed.  It is still Capitalism, but not a free
market. 


> 
> Who are these "Capitalist interests"?  What exactly are they doing, and
> is it consistent with the principle of non-initiation of force?
> 

Capitalist interests, as I use the term, are any individuals or
institutions that work to impliment a Capitalist economy, with or
without a free market and with or without democracy.  The Federal
Reserve probably qualifies.  The IMF certainly qualifies.

I don't believe that what they are doing is consistent with the
principle of non-initiation of force, if I understand the term
correctly.  Indonesia I think is a prime example of the direct
application of economic power by the IMF.  Suharto originally favored a
rogue economist (whose name escapes me), but the IMF objected to his
policies and threatened economic sanctions unless Suharto toed their
economic line.  Suharto ahd no choice but to give in.  He objected to
raising the price of fuel, but the IMF insisted.  The Federal Reserve
has a slightly different power which it wields, since it can make money
and control prime rates.  At some point it does become difficult to
differentiate between what constitutes 'force' and what does not. 
Generally speaking, if one is penalized for acting in the manner he sees
fit, or for not acting in some specific manner it is fair to refer to
him as 'forced'.  If, under the same conditions he does not want to act
in the way that would get him penalized, or wants to act in some
specified manner, he is not.  Is mandatory auto insurance an example of
forcing the public to purchase insurance?  Surely it's chief proponents
were the insurance companies, using their ability to lobby to help make
the policy law.

...

> We're talking around each other; we're using the same words, different
> definitions.
> 
> Capitalism is not the same as "business interests", though it is in the
> businessman's interest to live under capitalism.

In part I agree.  Capitalism is not the same as 'business interests' as
you say.  Since I accept that Capitalism and free markets are distinct
and arguably independent entities - meaning in this case that I believe
that when Capitalism eliminates free markets, Capital becomes moot and
the system effectively transforms into another economic form.  I
entertain the idea that such an economic form has not yet been
adequately characterized or defined (!).

But in accord with my understanding of the terms, business interests may
be free market, while Capitalist interests may not.  I think free
markets are attractive to small businesses which are looking for
protection and support, while large established businesses prefer a
monopolistic form of Capitalism.


>  Under capitalism the
> government has nothing at all to do with the economy, it's only function
> would be to have a military (to protect against invasion), police, and
> courts (period).

Again, nowhere in the definition of Capitalism can I find a reference to
government, nor in government a specific requirement that it impose a
Capitalist system.  I propose that the two are distinct:  Capitalism is
a system of economic, Government is a system of governing.

But your assertion brings us back to an earlier issue.  Government has
no choice but to influence the economy.  By its absence, the public de
facto has no representation whatsoever.  There are no regulations or
constraints upon the use of capital, hence those who control Capital may
act in any way they desire.  When you being to establish laws to protect
the public from the actions of those who control capital, you establish
regulations.  If you do not, then there is no control over those who
control capital, and they may do what they wish.  For myself, I don't
think that allowing those who control capital to, for example, take my
house because it is a very desirable, i.e. valuable, piece of land.  If
I have a choice between working at factory A or being unemployed - since
even if competition exists they may not need another employee - is it
desirable, for example, to be regularly exposed to nitric acid fumes?  I
wouldn't think so, but my when my choices are that or unemployment...? 
The choice of walking out the door is often not a choice.


>  Businesses would have no interest in trying to
> manipulate the government since the government would have no interest in
> manipulating them.

It seems certain that if competition exists among several businesses,
the businesses would take steps to cut their costs in order to obtain a
pricing advantage.  One step may be to hire only children under the age
of twelve.  Advertising, for example, consisting of happy children
proud of their job, testimonials from parents, and other forms of
advertising would probably offset any public outcry.  The companies
would all work to obtain the same productivity with lower wages, and in
fact this was a propaganda mantra being repeated around the workplace as
recently as 1995-1996.  Since the population is large, finding low wage
workers would likely not be a problem.

Two of the businesses may merge to force out the third - in fact this is
happening now - reducing competition and lowering the number of
available jobs, creating further downward pressure on wages.  The other
businesses, finding themselves in desperate straits, may take more
desperate measures - perhaps mandatory wage cuts, perhaps benefits
cuts.  Promises of high returns only postponed until business is better
could be used to quiet concerned employees, as was done at a Montana
Aluminum plant some years ago.  The number of possibilities is rather
dizzying, and this is only in areas where competition exists.

But far less advanced societies than ours set up the means to regulate
businesses.  These regulations, in fact, where usually set up by the
businesses to protect themselves.  Guilds, for example, often prevented
individuals from opening businesses, and if they did they had to meet
the requirements of the guild.  These were not unions, but the
businesses themselves found them expedient to establish.  Thus
businesses themselves interfered with the free market.  Today, there is
a strong trend for businesses to become involved in the educational
system, and there have been statements to the effect that education
should have the sole purpose of providing training in response to
business demand.  The implications of this policy, if it becomes
implimented, are clear.


>  Since the IMF is funded by taxes, stolen wealth, it
> is inconsistent with a capitalist government.  (In a capitalist society,
> the government would be funded by voluntary donations, perhaps with a
> fee for service element like requiring contracts to have a stamp in
> order for them to be valid in court.)

The IMF is funded only indirectly by taxes, since it is not itself a
taxing body.  It also charges interest on its loans.  It is, however, a
tool desired by Capitalists and established by Capitalists.  It will
only disappear when laws and governments change sufficiently that
another banking entity can perform the same functions.

Again, the definition of Capitalism does not contain any reference to
government that I know of.  Capitalism is an economic system, and
distinct, in principle, from government.  The existance of a capitalist
society does not require that government be funded by voluntary
donations, and if such were the only funding available the government
would likely either be wholly ineffective or cease to exist.

> 
> For the capitalist viewpoint on what capitalism really is, not what
> you've heard from pragmatic advocates of the mixed economy who were
> taught by Marxist intellectuals in the universities, but from real
> radicals who support it, I recommend Ayn Rand's anthology Capitalism:
> the Unknown Ideal.

I recommend, strictly as a n.b. that you not presume to state where I
learned about the economy or about government.  I would also suggest
that you learn to distinguish between and among economic systems and
government systems before making too many accusations regarding 'mixed'
economies.

M


> 
>         Jeffrey Haber
>         http://www.sb.fsu.edu/~haber



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