Foolish support of Capitalism

What follows is an expression of frustration resulting from my instinctual convictions related to capitalism. Which is to say I’m getting a little unnerved about all these smarty-pants who have declared with great Government & Academic Certainty that capitalism is a cancer on our American free enterprise. This certainty is so broadly accepted that only a fool would consider false the declaration.

Today, I am that fool. (Not that today should be different from any other day.)

Befriending capitalism nowadays is like being the last person in a family who continues to support the alcoholic Uncle who can’t/won’t hold a job, drove Grandpa’s truck into a tree when running from child-support collectors, and showed up at the Christmas dinner with his meth-addled girlfriend who was later whisked away by police during the prayer over the meal because she removed her house-arrest ankle bracelet. But dang if she didn’t first pass out head down in the sweet potato casserole when the cops busted through the door, smashing the Jesus statue Grandma used as a door stop.

But capitalism is not a liquored-up, out-of-control system destined to ruin your Christmas or your casserole. To borrow and retool a Churchill quote, capitalism is the worst form of a market system except for all the others. Which is a boneheaded opinion for me to hold, according to the smart kids in the class.

The Boston Globe recently posted a story introducing us peasants to the concept of the “Minsky meltdown” — a theory by Hyman Minsky who said “Instability is an inherent and inescapable flaw of capitalism.” The Boston Globe article further noted that Minsky believed capitalism is a system “that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.”

Expanded federal regulation of the marketplace is the only way to keep capitalism from failing us in the future is the underlying theme of the article written by Stephen Mihm, a history professor at the University of Georgia and author of “A Nation of Counterfeiters.”

It is incredibly puzzling that the smart folks at the highest levels of government and academia fail to incorporate any effect of government regulation/manipulation/interference of our market. In our modern economy, there are essentially three parties at the table of exchange: consumers/participants (you and me), business/capitalism (you and me) and government (bureaucrats, politicians, lobbyists, you and me).

Yet it’s capitalism alone that has screwed the pooch. Decades of government manipulation, well-meaning and otherwise, requested by the special pleading of you and me remains above reproach. Indeed, government is so pure and without fail that its always efficient and well-considered legislation is where we seek redress for the evils foisted upon us by the capitalist pigs on Wall Street who, from the comfortable perch of their corporate jets, manipulated millions of us to buy homes we couldn’t afford.

Also puzzling to my small brain is how Mihm and others in the media/Obama Administration conveniently ignore the numerous economic theories (see, for examples, Carl Menger, Henry Hazlitt, Frederic Bastiat, Milton Friedman) which suggest collapse is a necessary component of a mature and productive market. Collapse is the hangover from bingeing on the capitalist hooch, and our societal livers need to be reminded from time to time why moderation is preferable.

A friend once noted, in a moment of insightful irreverence, that “the Good Lord giveth and the Good Lord taketh away, and if that ain’t a square deal, I’ll kiss your ass.” And so it is with capitalism. A greedy schmuck can manipulate the system only so long before the system bites back. Hazlitt said the moral hazard associated with being a greedy schmuck is negated when government bailouts and other federal safety nets are engaged to protect people from the consequences of the aforementioned bingeing.

Hazlitt also noted that economists/government officials are too often focused on the present to understand the big picture; and the focus is often even more narrow because government is keen to aid one particular group (banks, auto industry, railroads, defense contractors) within an economy. Hazlitt said: “The art of economics consists in looking not merely at the immediate but at the larger effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

We are spoiled and arrogant. Not only do we think government should protect us from our collective bad decisions, we think we are smart enough to inject so-called social justice into a marketplace built upon individual liberties that result in millions of points of daily commercial exchange. Obama, for example, has appointed a “pay czar” to determine appropriate salaries and benefits for execs in the financial sector. Expect the same with hospitals, doctors and drug and insurance companies if the government takes full(er) control of the health care sector.

And therein lies the uncomfortable burr underneath my capitalist convictions: To tinker with the system under the guise of protecting us from ourselves requires reducing individual liberties of economic choice.

The documents creating this country — considered silly and antiquated by some —were intended to protect us from government efforts to protect us from us. The gentlemen who penned those documents believed in such odd concepts as personal responsibility, self accountability, minding your own business and pursuing happiness sans the oversight of a pay czar. They knew that a government limiting risks also limits rewards.

If it’s all the same to y’all, I’d rather take my chances with the self-imposed Karma of Capitalism than the collectively-imposed Good-Intentions of Government.

And what’s more, that casserole was never any good anyways.

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(By way of reminder, we’re still looking for a new Peter.)