Friday, August 23, 2019

Richard M. Ebeling: How Capitalism Could Save the World

In following the daily news events both in the United States and the rest of the world, it is easy to get lost in the detail and not step back and remind ourselves what the really important issues are. 

Under the anxiety of a possible nuclear war in Korea, actual terrorist attacks in the Middle East and by seemingly “lone wolves” in other countries, threats of trade wars, and polarizing trends in politics, the real underlying issue is, and remains, how should people live together?

Clearly people are not living as harmoniously and prosperously as they could. The question is, why? The sophisticates will say that life, politics, and local and global society are complex. It is just the way it is, and we have to just “muddle through” on a daily basis as best we can. The dreamers of various sorts will point to racism, class conflict, gender wars, the one true religion, or the transcendent ideological purpose. If only their brand of salvation was established, all the problems of the world would go away.

All of these conceptions of the solutions to our problems share one thing in common. They invariably involve someone in society imposing their vision and will on the rest of mankind. This is fairly obvious when we turn to the religious or ideological fanatic. Make the world follow my faith or my political utopia or my idea of a “socially just” society, and then peace and happiness will reign with an end to all the strife dividing humanity.

Elements of Coercion in Proposals to Make a Better World

However, listen to such people more carefully and you soon see the coercive aspect to their message. They will tell people how to live, how to work, how to interact with one another, and what shall be the social “just desserts” to be ladled out to everyone in terms of social and economic status in society. They have a hierarchy of values based upon their beliefs about the world, and if you put them in charge, they will arrange that world to fit that vision.

This necessarily requires all of the rest of us to conform to and be confined within their notion of the proper relationships and positions each of us should have in their better world. Since it is highly unlikely that, suddenly, everyone on the planet will hold the same values and beliefs, some will necessarily have to be coerced to live their lives as others think they should. The will and desires of some are to be imposed on many.

But we don’t need to think of this only in terms of the religious fanatic in, say, the Middle East or the gender and “anti-racist” warriors closer to home, who wish to make us live, interact, and think as they want us to. It also exists in the mainstream arena of everyday politics where the “grand vision” may not always be unfurled but takes the form of tax policy, regulatory rules, and talk about “making America great, again” through tariffs and other forms of trade restrictions.

Modern Democratic Politics and Coercive Policies
Politicians run for office telling us that our everyday problems will be solved if only they are put into elected office. They will give someone a subsidy, another a regulation that limits competitive opportunity, or some land-use rule that hampers how another person may or may not use his own property. They will implement some income redistribution through the tax code that makes one person a bit more wealthy and someone else less so. The bags of tricks of the modern interventionist-welfare state often seem endless.

But these, too, require political means of coercion.

Once politics enters into all this, political power becomes the most important and contentious item for possession. Having control over it enables you to influence the resulting outcomes. If you and those with whom you form political coalitions do not have control over the reins of power, then someone else will have it who will use it in ways that serve their ideological or material purposes, with others being the losers.

We see this with Trump’s trade wars: certain sectors of the American economy are to gain at the expense of many other consumers and producers at home and abroad. Or the tax code is used to benefit some people while at the same time disincentivizing and financially burdening others. Zoning and land-use regulations enable some property owners to make financial killings while others are straightjacketed in their use of what they honestly own and may see their property values stagnate or go down due to the regulatory power of government.

Coercing Government Is the Source of Social Conflict
The list could go on and on. Politics becomes a battleground for control. If you and your allies do not have that control, someone else will, and your fate is in their hands. At the same time, government becomes not only an arena in which cronyist groups of every type fight to use that government for their own ends, the institutions of government also become a source of power, privilege, and wealth for the politicians and bureaucrats who man the halls of government. Those in government have their own interests as well, which they advance by serving those interest groups who wish to eat at the political trough.

This is the nature of politics everywhere. Sometimes it is more tyrannical and deadly, where speaking your mind or criticizing those in power can lead to arrest, imprisonment, torture, and death. Resistance may bring about destructive civil wars.

In the West, where “democracy” prevails for the most part, it all seems so civilized. Representatives are elected to political office, and everything is done, or presented as being done, by the procedures to be followed under a “rule of law.” People may speak their mind for the most part, and write on almost any subject under the sun (within the increasingly tight constraints of ever-present “political correctness” police).

But regardless of the institutional form, either a political democracy or an authoritarian regime, in the modern world, everything revolves around gaining and using the power of government to take advantage of others in various ways. Is it that surprising that the more everyday life depends upon government action, the more society appears to be polarized?

Is this the only way people can and should live? By means of power, plunder, privilege, and political position? Is group conflict the only way the social and economic system can be arranged to serve humanity?

The answer is, no! There is a better way. But it requires thinking about man, society, and go
vernment in a radically different manner.

A Human Alternative: Liberty and Freedom of Association
A growing portion of humanity, including in the United States, seems to have lost sight of this alternative form of social existence. This alternative starts off by conceiving of human beings as individuals rather than as social, racial, or gender collectives. It is the philosophy of individualism that declares that every human being has a right to his own life, his own liberty, and his honestly acquired property. It declares that every individual owns himself. He is not the property of any social collective to which his owes his obedience and his sacrifice if an asserted higher good of the group requires or, indeed, demands it.

It also declares that all human relationships should be based on voluntary agreement and mutual consent. No one may be forced to interact with others against his will. Human cooperation is constructed on the basis of peaceful consent and personal choice. Every individual may have his own idea of a good life, a desirable hierarchy of values, what might bring about human happiness. But he may not impose it on others against their consent, and neither may any other person impose a different one on him.

Another way of expressing this is that the individual is an end in himself. He may associate with others and take advantage of the things they might do for him as means to his own desired ends, just as they may use him as means to their ends. But no one may be made a means to another’s end without a free choice between them, at agreed upon terms.

The social position and the relative income possessed and earned by each individual in such a setting of human liberty reflects how well each person has flourished by serving the ends of others as the means of advancing their own purposes and dreams.

Capitalism and the Freedom of the Marketplace

This political, economic, and social system goes under a variety of names: (classical) liberalism, the free market, or capitalism. These all connote this distinct way for living under which people may not coerce or compel their neighbors. Getting others to act differently than they currently are may only be attempted by reason, persuasion, and the example of one’s own life.

Part of this reasoning and persuading procedure are the interactions of people in the marketplace. If you want someone to supply a good or provide a service, as the “demander” of such things you can only get others to supply them through offering something in return and haggling over the terms under which it may be done. As the Scottish moral philosopher and economist Adam Smith explained nearly 250 years ago, one free person says to another, “If you do this for me, I will do this for you.”

Every exchange in such a “system of natural liberty,” as Adam Smith called it, harnesses the self-interest of every participant in the service of others as the institutional means to get others to serve him. Self-interest is directed into the betterment of the “common good,” understood as the conditions of the individual members of society, rather than some collective “social good” forcefully imposed on all, regardless of whether they share that belief.

It is poorly understood and appreciated by many people that this peculiar system of interpersonal liberty has been the source of innovation, industry, and the improvement of the human condition. Our standards of living, the quality of life, and the cultural opportunities and enjoyments of our world are all due to the extent to which this system of natural liberty has been implemented and allowed to function free from the compelling hand of government.

Equal Freedom for All, Privilege for None

The ideal and the social policy of the free-market, capitalist system is equal freedom for all and privilege and favors for none. Government protects each person’s life, liberty, and honestly acquired property rather than violating them through its legitimized use of force.

Equal individual rights before the law necessarily means that the social and material outcomes in society will not be equal. Each person has that honestly-earned financial position that reflects the extent to which others have valued their services and for which they have paid what that person’s services have seemed worth to them.

“Good causes,” as judged by some, certainly may be—and are—pursued in this free society. But those who see these as good causes must persuade others to join them in voluntary charitable efforts of time and money to try to achieve them. How much better, both ethically and pragmatically, when this very voluntarist aspect to the solving of “social problems” permits experimentation and competition to devise ways to handle them in comparison to the monopolized and coercive means of government redistribution!
Freedom Reduces Social Antagonisms

At the same time, this principle of free choice and voluntarism under (classical) liberal capitalism diminishes, if not eliminates, the types of social antagonisms and political polarization so visible in modern society. No one is forced to follow or finance the desires of others. Each individual selects his own goals and purposes, with its own chosen hierarchy of important things between which trade-offs and reasonable costs may be paid given what each considers it to be all worth to them.

When thought about clearly and consistently, (classical) liberal capitalism enables a degree of peace, harmony, and respectful tolerance of the choices of honest living for everyone in society to which nothing else compares, especially when held up as an alternative to today’s coerced collectivism.

This is the lost world of liberty that we never fully attained in the past, even in the heyday of 19th-century laissez-faire when, in reality, the personal and economic freedoms of that earlier age were blended with noticeable elements of political coercion, including human slavery and failures to establish full equality before the law for all.

What our world needs today is to transcend the collectivisms of the present, whether under more extreme authoritarian regimes or the seemingly milder spiders’ web of controls of the interventionist-welfare state under existing democratic systems of government.

Looking past the everyday particulars of daily politics and government policies that fill the news and social media outlets, we need to take the wider view of how people do live and could live, enabling us to not only see what is the source of many of our problems but how a real system of natural liberty could and would offer a way out for mankind.

Realizing this and appreciating it should act as the context and ideal that makes us want and be guided by the imagery of a real social change that successfully created that better world. A world of (classically) liberal, free-market capitalism, but one more consistently practiced than anything yet experienced by mankind.

Richard M. Ebeling is a Professor of Free Enterprise at a US College and a former President of the Foundation for Economic Education. This article first appeared HERE.

No comments: