by Rod D. Martin
May 18, 2013
Several commenters have replied to my piece concerning the Pope’s attack on capitalism. The strongest of these point out the tendency of some capitalist economies (particularly ours, of late) toward monopolies, government enterprises, and a general “bigness” that colludes with government.
My response is that all these things constitute a perversion of capitalism, not its essence. Capitalism is about every individual being able at any time, with a better idea and a whole lot of work, to completely disrupt the status quo. Sure, IBM may be big today, but an Apple or Microsoft can always knock it off tomorrow. The more free a particular market truly is, the more you see this: Facebook wiped out MySpace in a year. And you may be certain that none of those MySpace employees went into a breadline.
No, we are both Christian and capitalist, which means we are conservatives, not libertarians. The libertarians would have you believe in anarchy (Mises) and other such foolishness. Adam Smith and Adam Ferguson well understood that that is a recipe for fascism and/or feudalism (though they did not know the former term). And that’s what these critics are really decrying: the tendency of large enterprises to use their wealth and power to buy politicians and collude with government to obstruct the market, to block and destroy their competitors, and to centralize all power in a few hands.
This is no different from the mercantilism that Smith and Ferguson opposed and that was dominant in England at the time of our Revolution (and part of why America revolted). This is (as I said) feudalism in a sense — government chopping up its territory into fiefs run by one or another de facto or de jure public utility — and fascism in modern practice. It is, indeed, what Obama is doing to the auto industry and to health care, though he’s hardly the first to head us down that path.
None of that is what we properly call capitalism. All of that is a perversion of capitalism. And it’s relatively easy to solve, with a proper legal system that busts up monopolies and punishes conspiracies to restrain trade. But it’s very difficult to properly enforce those laws when government itself gets too big, because it necessarily begins dominating business and colluding on its own, and its sheer size attracts more corruption from without; and this was precisely what our Founders sought to avoid by creating a government of precise, limited, delegated powers.
It would be easy to criticize capitalism because of the ways people twist it. But I would strongly urge against that. It is the nature of fallen, sinful man to pervert all things whatsoever, so why should an economic system be any different? Do not decry the system: decry the perversion, and fix it. Every option other than that — as the Pope’s own Argentina demonstrates more than most places on Earth — guarantees failure; but the past two centuries show how very much success is possible, even when capitalism is imperfectly implemented. It is, as I wrote, the societal level application of the Golden Rule.