The Great Connections Seminar

The Great Connections Seminar
Discussing ethics

Wednesday, March 4, 2009

"A Week of Revelation"

Washington Post columnist Michael Gerson hits the nail on the head about the Obama agenda:

"But governments do not "invest," they spend. Such spending can be justified or unjustified. It is wealthy individuals, however, who actually invest their capital in job creation. Most have much less capital than they used to. Under the Obama budget, they would have less still. This does not seem to matter in the economic worldview of the Obama budget. Equality is the goal instead of opportunity or economic mobility. And government, in this approach, is more capable of investing national wealth than America's discredited plutocrats -- meaning successful two-income families, entrepreneurs and professionals.

"This is not merely the rejection of "trickle-down economics," it is a weaening of the theoretical basis for capitalism -- that free individuals are generally more rational and efficient in making investment decisions than are government planners." (Emphasis added)

The putsch of egalitarianism.
Hat tip to John Enright.)


y-intercept said...

I am glad to see others catching on to this nasty trick used by Obama. He's pulled it in a large number of speeches.

He rarely uses the term "invest" in relation to individuals or businesses. He has the individual pegged in a stagnant role where they have jobs then borrow and spend their way through a tedious life.

Conversely, Obama routinely uses the term invest as a synonym for government spending.

I've heard others use the same rhetorical trick. The goal is to re-enforce the doctrine that government, not individuals, should own the means of production.

I guess these little tricks poll out as effective. I find them annoying. Of course, Universities are full of professors who are annoyed at the idea of free individuals owning the companies they build.

Marsha Familaro Enright said...

You're right, it's a nasty trick. Calling government spending "investment" reminds me of Newspeak in 1984.

y-intercept said...

I understand your definition. Reinvestment of capital, as explained by Adam Smith and others, elegantly explains why free societies thrive.

I also agree that the ability to own property and re-invest the fruits of one's labor is a fundamental freedom.

The problem is that the enemies of freedom hold a completely different definition of capitalism. With this definition, they are able to twist the debate and turn people en masse against the free market.

I believe in defending the definitions, but this is not the case of lefties twisting a term.

The term "capitalism" was coined by the enemies of the free market specifically to undermine the free market. The term "capitalism" was defined within a Marxian framework. This framework is a belief that intellectuals can scientifically predict the evolution of society.

The advocates of this theory will claim that a free market will quickly devolve into a socio-economic system with capital concentrated in a very small number of corrupt hands. The rest of society would languish until a revolutionary (or other change movement) would rise to overturn the dominion of the capitalists.

In this framework, capitalism is a transition state from a one socio-economic to another. Capitalism is a system where a corrupt minority oppresses the masses through ownership of capital.

Here is the catch: When Libertarians vigorously defend capitalism they are tricked into supporting the framework in which the term was defined.

Putting it another way. Capitalism is not unique to the free market. In a slave owning state, slaves are an accepted form of capital. A slave owner would borrow against slaves then strive to profit from the ownership of other people.

Successful slave owners would re-invest the produce of slaves and buy more slaves. Unsuccessful slave owners would be forced to sell off slaves and might become slaves themselves.

Capitalism can exist with no freedom.

Right now we have a system of crony capitalism. In this system companies invest heavily in their political connections then reap the rewards of government manna.

Fascism is a form of capitalism where an elite class of cronies and a corrupt government own everything. They use the power of reinvestment to further their power.

Obama's system where the government invests, and individual borrow and spend is a form of capitalism as well. When defending capitalism per se, Libertarians support all of these corrupt systems.

My observation was that Libertarians' vigorous support of capitalism was a driving factor in the creation of the bastardized financial system that just imploded.

I believe that if Libertarians were more focused on the freedom of the individual instead of credit as the lifeblood of society, then we could have avoided some of the boneheaded financial instruments like credit default swaps and government backed re-insurance that just blew up in our collective faces.

Definitions work within a framework. We can't just take terms like "capitalism" that were defined within the socialist framework and make them work within the classical liberal or Libertarian framework.

Capitalism makes capital the foundational bedrock of society. Capitalism can describe either a slave society or free society.

The free market makes the free individual the bedrock of society. Capital is reduced to a tool used by a free people. When one loses this distinction, they set themselves up to lose the argument.

A fundamental premise of the Hegelian world view is that every society lays the seeds of its own destruction. Planting the loaded term "capitalism" into the heart of our lexicon is an effort to plant a seed of destruction.