Monday, August 29, 2011

Capitalism: A Love Story

Lambasting a film by Michael Moore is the simplest task an apologist for conservatism could ever be assigned. His films are so ripe with puerile absurdities and vulgar rubbish that they function as the perfect foil for a conservative critic. And while I would love to be the one to pen the definitive death knell for this film, I imagine a better conservative writer -- more intelligent and thorough than myself -- has long since beat me to the punch (though I haven't read [or searched for] any such reviews). However, having just seen the film, I would like to highlight some of the finer points that stuck in my craw.

One of the overarching problems with the film is that it fails to delineate what capitalism is, or when free markets are actually in play. Thus, in response to many of the film's supposed critiques of capitalism, one need only ask rhetorically "And what does this have to do with capitalism?" Very often the answer is: nothing at all.

For example, Moore spends some time on the issue of the housing market collapse and subsequent financial market bailouts, but never makes any salient connection between those events and capitalism. In fact, completely oblivious to what his own argument is, he details the events as if he's demonstrating the stupidity of capitalism -- aggressive re-financing of mortgages, people using the equity in their homes as banks, sub-prime loans etc. -- when he's actually merely demonstrating the stupidity of people within capitalism, as well as the stupidity of government interventions in the market (i.e. artificially low interest rates for decades, CRA, Freddie and Fannie's existence, political pushing for increases in home ownership, TARP/bailouts, etc). The latter being largely responsible for the former. In the matter of the people within the system making poor financial decisions -- setting aside the fact that such decisions were motivated, encouraged, underwritten and insured by the government -- what of it? No one ever claimed that the existence of capitalism ensures people will make sound financial decisions, or that they won't have to pay the consequences of poor ones. Yes, there are winners and losers in a capitalist system, and there are market fluctuations. Defenders of free-market capitalism only ever claimed that it's the most just system and that it's the most efficient at creating wealth and higher standards of living across the board. None of the facts surrounding the housing market collapse or the subsequent bailouts mitigates against this claim.

Speaking of the bailouts, Moore correctly points out that TARP was passed by stirring up fear and claiming that it was a financial emergency -- when it was not -- and that the bill was passed without Congress even having read it. This is, of course, pure insanity. What Moore seems oblivious to is that only a hard-line conservative, a pro-capitalist, can rationally oppose the taxpayer funded bailouts. The bailouts are Keynesian madness at work; the antidote is conservative sanity. Moore acts as if it's an egregious offense, and it is, but once again, what does this have to do with capitalism? What's the alternative, not bailing out the banks? Allowing them to fail? Of course this is the only alternative, and what of it? It's precisely this opposition to the bailouts that all true defenders of the free-market would (and did) advocate on principle. Yet Moore interviews a couple of Democrat congresspeople about the madness, as if it was anything other than a liberal policy that was put into place.

One might respond to this by stating "Well, yes, by shifting the burden to the taxpayers they are effectively socializing their losses, but they're privatizing their gains!" Keeping in mind that the gains are supposed to be private in a capitalist system, people did certainly make money when the housing market was booming, but the people who made bad investments would have paid for it if the market was allowed to run its natural course. So the problem with "socializing the losses and 'privatizing the gains'" is the first half of the equation. Keep both private and let the market work. Let the banks and financial tycoons take their lumps when the market corrects itself. Let those who didn't make bad investments, who smartly rented when they knew they couldn't afford to buy, who didn't write bad loans, come in and reap the rewards. The gall of Moore to attempt to co-opt this contempt for fiscal irresponsibility and taxpayer bailouts on behalf of the left is appalling nonsense.

To make the absurdity more pronounced, Moore affectionately depicts groups of neighborhood people  protesting someone in their neighborhood getting evicted. Moore and these neighborhood people apparently think you should be allowed to own things that you can't afford and haven't paid for. Why? To his credit, he doesn't even attempt the farce of a logical argument here; it's a pure, unadulterated emotional appeal that is transparently hollow.

It isn't always obvious to me whether Moore's propaganda piece is being intentionally deceptive, or whether the filmmaker is simply oblivious to the massive holes in his own argument. For instance, he brings to the viewer's attention the case of a bread company, somewhere in the Midwest, that runs its operations in a quasi-socialist fashion. They make decisions democratically, management and factory workers get paid the same amount, everyone owns part of the company, and it is claimed that they are quite successful. In this case the question isn't "what does this have to do with capitalism" but "how is this not capitalism at work?" This company competes in the marketplace, it has an innovative internal structure that works, and it profits at the expense of its competitors who have inferior business models; the owners simply choose to generously distribute the profits more equitably than most companies. So what? How is this antithetical to any capitalist principle? How is this anything other than owners voluntarily being charitable with workers, using money supplied by a capitalist system? Which is precisely a principle at the heart of conservative, free-market orthodoxy; charity should be private and not public.

Moore speaks about the widening wealth gap and the shrinking middle-class, which are partially just myths, but to the extent that they are true, or that they may be true, is a widening wealth gap an inherently negative thing? Moore and the rest of the left speak as if this is self-evident, but it plainly is not the case. Consider the following hypothetical graphs:

I've shown 'Wealth' on the Y-axis, though a better indicator might be 'Standard of Living', as that is what really matters, though the two are obviously closely related. In any case, if both of the scenarios depicted in the graph are possible -- and they are -- then a widening wealth gap can be a fine thing indeed for everyone, and a narrowing wealth gap can be a terrible thing for everyone. So speaking about the 'wealth gap' outside of the all-important economic context is a misleading and disingenuous misuse of language. A widening wealth gap could be something to rejoice over, if indeed the "rising tide lifts all boats", as has been the case throughout history where free markets operate unimpeded. Yet the left's propaganda machine has convinced many that a 'widening wealth gap' is inherently bad, which is demonstrably false.

The last point I'll touch on is Moore's claim that being a Christian is somehow incompatible with being a proponent of capitalism. How does he go about demonstrating the truth of this contentious claim? He interviews three priests who all have a low view of capitalism. Well, that should pretty well prove it! Flimsy, irrelevant, anecdotal evidence of this sort is, of course, par for the course for Moore, but the absolute void of content in his interviews of the priests is astounding. One priest positively loathes capitalism, and claims Jesus (if you'll recall, a demonstrably apolitical Messiah, with very little concern for economic systems or the specifics of worldly governance, one way or another) would have shared his disdain. Oh, really, he would have agreed with you, you say? Please, tell me more!

The priest obliges: "Capitalism is a sin!"

"Father, I confess I capitalism'ed this past weekend."

"That'll be 10 Hail Marys and 20 Our Fathers, my son."

Of course, the assertion that capitalism is a sin is even more absurd than the claim that capitalism is an inherent good. As I've written elsewhere, capitalism is a blank slate; an economic space within which to operate that is the most free of violence and coercion. It is neither good nor evil inherently, it's simply free whereas other economic spaces are less so. The idea of collective sins -- which capitalism would have to be if it was any kind of sin -- is also antithetical to the Bible which teaches that only humans can sin. Abstractions can not.

I could go on. I haven't even mentioned Moore's demagoguery or hectoring tone. I haven't really broached the issue of the lack of supporting data for his claims. I haven't fully illustrated just how imprecise and vacuous the 'arguments' presented are. But I think you get the idea.

Capitalism -- though imperfect -- is the best, most just economic system yet devised by man which, whenever truly unleashed, radically improves the conditions of those living under the system, and every relevant piece of historical data attests to this fact.

1 comment:

  1. eToro is the ultimate forex trading platform for beginning and advanced traders.