Capitalism, part I: myths about capitalism
Let me apologize in advance for the length of this series of posts. It is a conglomeration of many thoughts I have had on capitalism and why, in addition to being the most efficient, it is the most equitable economic system yet devised by mankind. I am not a trained economist and have not read all that much about what "the experts" think on these matters, so it could be that I'm restating the obvious. In any case, these are thoughts I have had that seem important, from my limited perspective, to illuminating why capitalism is superior to all other systems.
This is a tribute to Milton Friedman, perhaps the most brilliant of 20th century economists, who died on Thursday at the age of 94. The ideas he developed are responsible for lifting tens or hundreds of millions of people out of poverty, a feat that is orders of magnitude more impressive than anything ever devised by socialists. It is somewhat ironic that the free markets of capitalism have been more successful at accomplishing one of the chief socialist goals than socialism has. (As a tangent, I highly recommend his solution to the problems of healthcare, if you are interested in that kind of thing.)
Part I: MYTHS
Myth 1. In capitalism, the rich get richer and the poor get poorer.
False. In capitalism, the poor get richer and the rich get richer more quickly--but all classes get richer, just at different rates. Does a gap widen? It certainly can. Does that mean the poor are living in worse and worse conditions? No, of course not. Now even the poor have multiple cars and televisions. To say the poor are getting poorer is an insult to the poor of previous centuries. A free market is the environment in which all of society can advance most rapidly--even the poor. It is a myth that rich, greedy capitalists hold down the poor. Rather, they build up the poor through the creation of new jobs. The rich need people to have money in order to purchase their goods. They do not benefit by creating a class of poor people. They benefit by creating a class of people with expendable income. (As a brief analogy: clearly leftist politicians, who the poor vote for, benefit more by keeping people poor than conservative politicians, who the poor do not vote for)
Myth 2. Capitalism is based on greed.
The consesus seems to be that the basis of capitalism is greed. That is false. The basis of capitalism is self-interest. That may seem trivial, but it is a necessary distinction to make for what follows. The free market consists of countless transactions between willing parties. Those who insist that one party benefits at the expense of the other are wrong. That is an important distinction between a system of free markets and an authoritarian system: in the former, transactions only take place when all parties benefit; in the latter, transactions take place whenever and however a central authority demands--all parties will comply, at the point of a gun if necessary.
In a free market transaction all parties benefit, and the necessary result is that the total sum "value" among all parties increases exponentially since everyone involved is "benefiting" by getting something he wants. When I pay for rent I benefit by having shelter. The landlord benefits by having more money with which to purchase goods or services of his choosing. We are both in better states than we were previously. He will spend the money I paid him in such a way that further benefits him, and by doing so, the person whom he pays will benefit as well. In a capitalist system, personal (material) value increases with every transaction, allowing an exponential beneficial use of society's limited resources. In an authoritarian system in which the government is responsible for the sheltering of its citizens, I could be assigned a place to live. I would benefit by having shelter, but there wouldn't be a private landlord who would benefit and multiply the effects of wealth, as there is in a free market of private property.
But in order to get something from the free market a person must have something to exchange: he must hone a skill to produce personal value, or at least must be willing to bring some resource to the free market. So while, in capitalism, an individual is said to seek his own self interest, it cannot be said that he is being greedy by doing so: he must offer something to get something. A bum, who refuses to become skilled in some way, not only will fail to experience the benefits of a capitalist society (i.e., he will have nothing of value to trade to others in order to receive something in return), he will also rob society of his undeveloped value and the ignored gifts that God gave him. When that bum begins to demand that he receive valuables and resources without trading something in return, and even worse, when someone else begins to demand these things on his behalf, he is consumed with laziness and selfishness to the point that society is damaged.
This is why capitalism breaks down and will inevitably continue to do so in our society as well: because of the greed and laziness of people who demand something for nothing. Capitalism requires an individual to create value in himself through learning a trade or to develop a resource in order to trade the excess fruits of his labor to others. But when this capitalistic self-interest morphs into a consuming, selfish, lazy sense of entitlement, such that the individual no longer feels a need to develop any personal "value" (i.e., a skillset that is useful to society) in order to receive goods, the capitalist system begins to breakdown. That is why socialism is far greedier than capitalism. It does not require an individual to develop any usefulness to society (I hope it is clear that by "usefulness" I am referring to anything that a free market would reward--I am not referring to intangible, moral notions of human life). Those who do not develop usefulness are subsidized by those who do. This decreases the incentive to ever develop usefulness to society, which further fuels the need for subsidy, requiring an ever increasing portion of the labor of those who are useful to subsidize those who are not. A vicious cycle. This increases inefficiency, waste, and eventually rots society from within as the rewards for labor and innovation continue to decline. Greed will be the downfall of capitalism--it is certainly not the root.
Myth 3. Capitalism, or even conservatism as a whole, stems from pessimism regarding human beings, whereas socialism is a bold, refreshing ideal with an assumption of the inherent goodness of people.
No, actually reality is almost the opposite. An axiom of capitalism is that individuals will spend their resources more wisely than government. An axiom of socialism is that, if left to their own devices, individuals will frivolously waste money on hedonistic activity and thus require a central authority to discipline, manage, steal, and provide for the poor. I truly believe, as do other proponents of the free market, that the poor would do better if the government immediately ceased all of its programs aimed at providing for them. It is a myth that capitalists do not care about the poor and those who suffer--rather, we believe that the free will giving and charity of the good common men and women in a free market society will help the needy more successfully than any number of government programs.
According to the research of Syracuse University professor Arthur C. Brooks, who is releasing a book entitled "Who Really Cares: The Surprising Truth About Compassionate Conservatism," conservatives give more time and money to charities than do liberals. This makes perfect sense: those who have faith in government programs do not feel a need to personally get their hands dirty to help those in need (yes, that's a generalization...let's not get into that again). Why would they, when there exist government agencies with the specific purpose of taking care of the poor? If such agencies did not exist then people would give all the more to those in need. This is especially true in the age of the internet, where instances of human suffering are made known rapidly, and the response to alleviate it can come from so many millions of people (example: the overwhelming private response to hurricane Katrina). Additionally, there would be less waste. A much higher percentage of money given to private charity goes to those actually in need than does the money spent by government for this purpose, mainly due to the increased bureaucracy inherent to government spending and the associated salaries of the necessary bureaucrats.
Again, capitalists are the optimists regarding the common man and socialists are the pessimists. In fact, the only pessimistic aspect of capitalism is its very realistic view on power. The capitalist view is that power corrupts, and the more power, the more corruption that will result. Capitalism thus seeks to distribute power equally rather than centralizing it under one authority. All have the power of the free market transaction. It is naive liberals who hold to the belief that giving power to a central human authority will somehow result in less corruption and a better use of resources. Unfortunately for them, all of history shows otherwise.
The primary problem that leftists have with capitalism is the perceived inequality with the distribution of resources. The authoritarian left wants centralization because equality is its god. Conservatives believe that tyranny is a greater threat than any unequal distribution of resources that may exist. History again agrees. Authoritarians don't mind a state of tyranny--as long as they are the ones in control. This is why you can so often find a sense of elitism among leftists. They believe the world would be better off if they were the god of it. If only they were gods...then things would be "equal" and "fair." That is their draw toward tyranny. Leftists would prefer a state of equality in which all people live in poverty to a state of inequality where some are rich, some are poor, yet all are growing richer and society is advancing at a theoretical maximum.
You might think I'm overstating the case, but I'm not. In discussing education policy with some leftists, I pointed out that the only accomplishment of having the federal government involved with education is to allow things to be uniformly bad among all states. Their reply? "At least things will be equal this way." To the leftist, equal squalor is superior to unequal wealth, and uniform failure is superior to varying success.
Myth 4. The ideal of the capitalist is for the world to be run by greedy corporations.
The ideal of capitalism is often mistaken as a vision of transnational corporations ruling the world rather than traditionally elected governments. That is not what it is. Any tendency toward monopoly in the business world is as bad as a government-controlled economy. The results are the same. This relates to another myth: namely, that the capitalist wants no government regulation of anything. False again. One of the (very few) roles of government should be to ensure that the market is a free one. Monopoly must be thwarted so that a large number of separate producers stay in the market to compete with one another. It is competition that is sacred and vital to the free market. Competition can be killed off by government control or corporate mergers. Both must be guarded against. The power of the transaction must be distributed.
Part II: my favorite features of capitalism.
This is a tribute to Milton Friedman, perhaps the most brilliant of 20th century economists, who died on Thursday at the age of 94. The ideas he developed are responsible for lifting tens or hundreds of millions of people out of poverty, a feat that is orders of magnitude more impressive than anything ever devised by socialists. It is somewhat ironic that the free markets of capitalism have been more successful at accomplishing one of the chief socialist goals than socialism has. (As a tangent, I highly recommend his solution to the problems of healthcare, if you are interested in that kind of thing.)
Part I: MYTHS
Myth 1. In capitalism, the rich get richer and the poor get poorer.
False. In capitalism, the poor get richer and the rich get richer more quickly--but all classes get richer, just at different rates. Does a gap widen? It certainly can. Does that mean the poor are living in worse and worse conditions? No, of course not. Now even the poor have multiple cars and televisions. To say the poor are getting poorer is an insult to the poor of previous centuries. A free market is the environment in which all of society can advance most rapidly--even the poor. It is a myth that rich, greedy capitalists hold down the poor. Rather, they build up the poor through the creation of new jobs. The rich need people to have money in order to purchase their goods. They do not benefit by creating a class of poor people. They benefit by creating a class of people with expendable income. (As a brief analogy: clearly leftist politicians, who the poor vote for, benefit more by keeping people poor than conservative politicians, who the poor do not vote for)
Myth 2. Capitalism is based on greed.
The consesus seems to be that the basis of capitalism is greed. That is false. The basis of capitalism is self-interest. That may seem trivial, but it is a necessary distinction to make for what follows. The free market consists of countless transactions between willing parties. Those who insist that one party benefits at the expense of the other are wrong. That is an important distinction between a system of free markets and an authoritarian system: in the former, transactions only take place when all parties benefit; in the latter, transactions take place whenever and however a central authority demands--all parties will comply, at the point of a gun if necessary.
In a free market transaction all parties benefit, and the necessary result is that the total sum "value" among all parties increases exponentially since everyone involved is "benefiting" by getting something he wants. When I pay for rent I benefit by having shelter. The landlord benefits by having more money with which to purchase goods or services of his choosing. We are both in better states than we were previously. He will spend the money I paid him in such a way that further benefits him, and by doing so, the person whom he pays will benefit as well. In a capitalist system, personal (material) value increases with every transaction, allowing an exponential beneficial use of society's limited resources. In an authoritarian system in which the government is responsible for the sheltering of its citizens, I could be assigned a place to live. I would benefit by having shelter, but there wouldn't be a private landlord who would benefit and multiply the effects of wealth, as there is in a free market of private property.
But in order to get something from the free market a person must have something to exchange: he must hone a skill to produce personal value, or at least must be willing to bring some resource to the free market. So while, in capitalism, an individual is said to seek his own self interest, it cannot be said that he is being greedy by doing so: he must offer something to get something. A bum, who refuses to become skilled in some way, not only will fail to experience the benefits of a capitalist society (i.e., he will have nothing of value to trade to others in order to receive something in return), he will also rob society of his undeveloped value and the ignored gifts that God gave him. When that bum begins to demand that he receive valuables and resources without trading something in return, and even worse, when someone else begins to demand these things on his behalf, he is consumed with laziness and selfishness to the point that society is damaged.
This is why capitalism breaks down and will inevitably continue to do so in our society as well: because of the greed and laziness of people who demand something for nothing. Capitalism requires an individual to create value in himself through learning a trade or to develop a resource in order to trade the excess fruits of his labor to others. But when this capitalistic self-interest morphs into a consuming, selfish, lazy sense of entitlement, such that the individual no longer feels a need to develop any personal "value" (i.e., a skillset that is useful to society) in order to receive goods, the capitalist system begins to breakdown. That is why socialism is far greedier than capitalism. It does not require an individual to develop any usefulness to society (I hope it is clear that by "usefulness" I am referring to anything that a free market would reward--I am not referring to intangible, moral notions of human life). Those who do not develop usefulness are subsidized by those who do. This decreases the incentive to ever develop usefulness to society, which further fuels the need for subsidy, requiring an ever increasing portion of the labor of those who are useful to subsidize those who are not. A vicious cycle. This increases inefficiency, waste, and eventually rots society from within as the rewards for labor and innovation continue to decline. Greed will be the downfall of capitalism--it is certainly not the root.
Myth 3. Capitalism, or even conservatism as a whole, stems from pessimism regarding human beings, whereas socialism is a bold, refreshing ideal with an assumption of the inherent goodness of people.
No, actually reality is almost the opposite. An axiom of capitalism is that individuals will spend their resources more wisely than government. An axiom of socialism is that, if left to their own devices, individuals will frivolously waste money on hedonistic activity and thus require a central authority to discipline, manage, steal, and provide for the poor. I truly believe, as do other proponents of the free market, that the poor would do better if the government immediately ceased all of its programs aimed at providing for them. It is a myth that capitalists do not care about the poor and those who suffer--rather, we believe that the free will giving and charity of the good common men and women in a free market society will help the needy more successfully than any number of government programs.
According to the research of Syracuse University professor Arthur C. Brooks, who is releasing a book entitled "Who Really Cares: The Surprising Truth About Compassionate Conservatism," conservatives give more time and money to charities than do liberals. This makes perfect sense: those who have faith in government programs do not feel a need to personally get their hands dirty to help those in need (yes, that's a generalization...let's not get into that again). Why would they, when there exist government agencies with the specific purpose of taking care of the poor? If such agencies did not exist then people would give all the more to those in need. This is especially true in the age of the internet, where instances of human suffering are made known rapidly, and the response to alleviate it can come from so many millions of people (example: the overwhelming private response to hurricane Katrina). Additionally, there would be less waste. A much higher percentage of money given to private charity goes to those actually in need than does the money spent by government for this purpose, mainly due to the increased bureaucracy inherent to government spending and the associated salaries of the necessary bureaucrats.
Again, capitalists are the optimists regarding the common man and socialists are the pessimists. In fact, the only pessimistic aspect of capitalism is its very realistic view on power. The capitalist view is that power corrupts, and the more power, the more corruption that will result. Capitalism thus seeks to distribute power equally rather than centralizing it under one authority. All have the power of the free market transaction. It is naive liberals who hold to the belief that giving power to a central human authority will somehow result in less corruption and a better use of resources. Unfortunately for them, all of history shows otherwise.
The primary problem that leftists have with capitalism is the perceived inequality with the distribution of resources. The authoritarian left wants centralization because equality is its god. Conservatives believe that tyranny is a greater threat than any unequal distribution of resources that may exist. History again agrees. Authoritarians don't mind a state of tyranny--as long as they are the ones in control. This is why you can so often find a sense of elitism among leftists. They believe the world would be better off if they were the god of it. If only they were gods...then things would be "equal" and "fair." That is their draw toward tyranny. Leftists would prefer a state of equality in which all people live in poverty to a state of inequality where some are rich, some are poor, yet all are growing richer and society is advancing at a theoretical maximum.
You might think I'm overstating the case, but I'm not. In discussing education policy with some leftists, I pointed out that the only accomplishment of having the federal government involved with education is to allow things to be uniformly bad among all states. Their reply? "At least things will be equal this way." To the leftist, equal squalor is superior to unequal wealth, and uniform failure is superior to varying success.
Myth 4. The ideal of the capitalist is for the world to be run by greedy corporations.
The ideal of capitalism is often mistaken as a vision of transnational corporations ruling the world rather than traditionally elected governments. That is not what it is. Any tendency toward monopoly in the business world is as bad as a government-controlled economy. The results are the same. This relates to another myth: namely, that the capitalist wants no government regulation of anything. False again. One of the (very few) roles of government should be to ensure that the market is a free one. Monopoly must be thwarted so that a large number of separate producers stay in the market to compete with one another. It is competition that is sacred and vital to the free market. Competition can be killed off by government control or corporate mergers. Both must be guarded against. The power of the transaction must be distributed.
Part II: my favorite features of capitalism.
posted by Jordan at 2:38 PM
19 Comments:
Jordan, I left a comment on your last post in case you're interested, it's kinda long. I'll try and read this one too sometime. xoxo
Jeff should stop kissing Jordan.
Anyway, I haven't read your whole thing yet, but to add on your first myth:
College professors (including one I had) are apt to put up graphs that indicate the poor aren't getting richer, or are getting poorer (a result of immigration and other unmentioned factors). The problem with these analyses is that they ignore individuals. Saying the "poor get poorer" is highly misleading. It is a population statistic, not one that follows the same people over time, and it does NOT mean that a poor person gets poorer. Rather, it means that the poorest person (and this person can be a different person at any time) is poorer. But this means essentially nothing. If I'm poor at 20, but rich (at at least well off) at 30, and this pattern is common, then this shows a highly vibrant and healthy economic system. It doesn't matter that I'm poor at 20, because the trend is that I become well off later. This is completely ignored by those who throw out the "poor get poorer" myth.
Now that I've read it all, I have to say that this is one of the best essays I've seen on capitalism. I might take issue with you on your very last point, however, regarding anti-trust laws. Monopolies cannot become so without the power of force. Thus, monopolies cannot exist without government intervention. I would state my position that if the government's aim is to protect our basic individual rights (life, liberty, property, health [not health care, but rather the negative right of such things as not having our arms cut off]), true monopolies cannot form.
Regardless, we agree that monopolies are bad (in general - some may be good, since we don't want competing sewer systems or power lines running all over town). I think true laissez-faire capitalism won't allow for them.
I'm back in Boston now....
Thanks for your thoughts Chris. Like I alluded to, I haven't read that much in the way of formal economic literature, so I appreciate insight that might illuminate any mistakes that have resulted from my limited perspective.
While I agree that government regulation can certainly strongly contribute to the formation of monopolies, I would be hesitant to say that for any monopoly to exist the government must have intervened in some way. Maybe my internal definition of "monopoly" isn't consistent with a formal definition of which I'm unaware, but it seems easy to imagine laissez-faire capitalism allowing for hostile takeover of a market place. If that's not a monopoly then I should change my wording, because that is what I was referring to.
If a wealthy enough business exists in some market, it could be assumed that that business would have the means to buy out any competition that arises. Eventually, once a critical threshold of market share has been reached, the company could conceivably be able to purchase any new fledgling owner who comes along. I would say that one of the derivative roles of government would be to prevent that scenario from taking place, forcibly preventing the formation of such a monopoly. (I called that a derivative role because I think it descends necessarily from the right to property that we've talked about in our discussions about the philosophical purposes of government.) I do think that in a system of laissez-faire capitalism in this day and age that it would be much more difficult for a monopoly to form than it would have been in such a system historically, mainly due to increased globalization and nearly instantaneous information flow. Feel free to expand if I didn't catch your point.
To be clearer, I mean to say that a monopoly cannot exist without the power of force, something only a government has (or at least something only a government should have). Government is a monopoly in itself, but is to be the only one that can actually enforce its monopoly (by things such as police, etc.). Without that power of force, a monopoly cannot exist. So a good government reserves power of force to itself (i.e., they harshly prosecute companies and individuals that cut off the arms of their debtors), except for cases of self-defense or private property security (which is self-defense for an organization).
If the power of force is reserved for the government, then no company can be a monopoly without its help. That's the point.
I should also add, regarding your example, that artificially lowering prices to ensure power over a market is not necessarily bad. It has always been seen as bad, but I don't know of any examples where the consumers were hurt (this is my lack of knowledge coming in). The unions are the ones that get upset, but the price of a product is reduced with presumably the same quality (otherwise the tactic would be ineffective). Sure this puts others out of business, but capitalism does that all the time. Plus, if the company tries to raise the price after putting the others out of business, the market will produce other businesses that can offer the product for less, thus keeping competition. The point where this becomes a problem is when the government guarantees certain resources, protections, etc. to one company over another.
I understand the point but my problem is with your underlying assumption. Using your definition for power of force, why would a corporation need the ability to pursue debtors and cut off their arms in order to establish a monopoly? I am not seeing the basis for the assertion that power of force is necessary to establish a monopoly.
In the example I used, I was not referring, as you suggest, to protectionist policies that governments use to keep certain businesses running when the free market would have otherwise seen them go out of business. I was not referring to intentionally selling goods at a loss in order to knock out competition (like a Walmart moving into an area and selling at a loss to knock out other businesses). I think we're talking past each other. Both of us agree that government subsidy in either of the above scenarios would be counter-productive. That's not what I'm referring to.
Visualize (as hippies do): a huge company that already has a large market share because of prior success. They sell all the party hats in a given area. But their party hats are a little shoddy. A middle-aged truck driver decides to sell party hats of his own. He uses premium materials and comes up with a new process for assembly. Large Company pays truck driver to shut up and go away, buys his inventory and patents, etc. It isn't worth Large Company's time or money to purchase the new equipment. People don't get the premium hats.
That is a stupid thought experiment, but the point is I do not see why any force other than the economic kind is necessary to establish a monopoly. If a group of people is wealthy enough, I don't see why they can't be as effective in getting their way as a group with guns and the government sanction to use them. As I've already stated, we agree that government regulation in general will greatly increase the possibility of the formation of monopolies. In today's environment the example I used is extremely unlikely. Historically, as in a colonial laissez-faire system, such examples could have arisen quite easily. That is because the free market requires perfect information and knowledge in order to reach its theoretical optimum. That comes up in part II....
So I guess that conclusion of all of that is that I need clarification on the basis of your argument, not the argument itself.
Well I don't know if I can go any deeper (i.e., a more fundamental principle). My underlying premise is that a monopoly cannot exist without the power of force. It's an assumption, for sure, and if I'm wrong, then my argument breaks down. Perhaps I could show this with more examples, but I am at a loss for them at the moment. Unfortunately, I just have to leave it as it is for now, and maybe sometime when we talk I'll try to think about it more (cause I think out loud with much exasperation).
Anyway, while your example could happen for sure, I believe that the free market will continue to compensate for problems. To work out your example to the next level, if it is found out that Corporation Evil will buy out any other competitor, then that will encourage competitors to start up businesses in order to be bought out because they will make money as a result. This will keep prices low as well, since entrepreneurs (sp?) would not sell their businesses if they could make money otherwise. Also, when Corporation Evil buys out their competitor, as often happens, they will include some of their competitor's techniques into their own products to make them better (hence discouraging more competitors from trying to enter the market). This process may take longer than anti-trust litigation, but I believe it is more effective and creates a stronger marketplace. One of the most fundamental requirements for this, however, is a minimal barrier to entry into a business - something only government can really effect.
I know I just tried to disprove your example, which doesn't disprove your point. I only mean to show that the free market can solve the monopoly "problem" with a proper functioning government in nearly every case.
That's alright, thanks for the effort. I just wanted to make sure it was an assumption rather than just me missing some basic piece in my reasoning. There was an Einstein letter I read one time regarding the philosophy of religion and it was really illogical. The man was a visionary and a genius, but he made significant errors when trying to make an argument outside of his field. I think people can, at times, miss simple realities in fields unrelated to their own when they fail to put enough thought into the context of their thoughts. My main concern with your argument was only that I might have missed some basic principle somewhere along the line, and I wanted to understand what that was in order to correct my thinking. Let me know if you come up with more thoughts.
Well, regarding Einstein, I think this one is a very good analysis of the famous bumper sticker refering to him (it was from the link on my blog that you didn't want to read cause it was long... actually, I haven't even read the whole thing - you can find it here):
"You Can not Simultaneously Prevent and Prepare for War" – Albert Einstein.
My first paying job in my life was teaching astronomy at the Miami Space Transit Planetarium. I have been fascinated by the stars and planets for as long as I have had a memory. I bow to no one in my respect and admiration for Albert Einstein’s stunning insights into the nature of space and time, matter and energy. That a young Austrian clerk sitting in a Swiss patent office could puzzle out the structure of the Universe using only logic and imagination is in my mind the greatest feat of intelligence in human history.
With that said, why aren’t the cosmological theories of George Patton or Dwight Eisenhower ever the subject of bumper stickers? Probably because cosmology is well outside their realm of expertise.
E=mc2 is a statement of such beauty and elegance that it commands belief in an ordered and structured universe. Human nature is not so ordered and structured. Psychology is not as predictable as gravity, and it is a mistake to think that it is. Human beings are subject to Murphy’s Laws, not Newton’s.
Quoting Einstein is an appeal to authority. But politics is not an area where Einstein is an authority. I give Einstein’s opinions on spacetime great weight; his opinions on politics and human nature, not so much. No one holds Einstein up as a great authority on fashion, grooming, family life, football or hairstyling. Why? Because the modern era’s greatest mind clearly didn’t know diddly-squat about them.
Even in some areas where Einstein was an expert – quantum gravity, for example – he was flat-out wrong. "God does not play dice with the Universe," he wrote, trying to come to grips with quantum probability theory. Well, turns out God does indeed play dice with the Universe, despite what Einstein says. Einstein refused to follow the quantum evidence based on the fact that he had a clear emotional aversion to the consequences of that theory. As a victim of national militarism in Germany, he quite naturally had an emotional aversion to that too. But history is the laboratory of human behavior, and history shows wherever you care to look that while being prepared for war may not guarantee peace, being notoriously unprepared is as sure an invitation as you are likely to see. To quote a politician on politics, rather than an astrophysicist: “Of the four wars in my lifetime, none came about because America was too strong.” There is much more refined political wisdom where that came from, if you are inclined to look.
Quoting Einstein on politics is like catching a review of the latest Rob Schneider movie with the banner THE GREATEST COMEDY EVER MADE!! The source is never Variety or the L.A. Times, but rather the Palatka Times-Dispatch or the Oshkosh Super-Coupon Review. The quote is huge, the source type microscopic, because the authority is not much of an authority at all. (The smaller the source font on the screen, the more suspicious you should be.)
There is a restaurant near Santa Monica Airport, called The Spitfire Grill. It’s done in a WWII motif. In the restroom, at about eye-level for a person remaining still for a few moments, is a magazine page from 1947, talking about Soviet atrocities on local populations. The last sentence of the article almost took my breath away for its courage and moral clarity. It said:
PEACE IS FOR THE STRONG!
Gravitational lensing during a solar eclipse proved Einstein correct. History, recorded again and again through the ages, does the same for this unknown article writer, no matter what The Great Man had to say.
The day may come when the lion and the lamb lie down together, but if it does, we'd better damn sure be the lion. I don't know who came up with that line, but I wish to hell it had been me.
I tried to reduce his italicized statements, but may have missed some formatting.
Uh... not "reduce", but "reproduce." Sorry.
Yes, that is an excellent analysis. Alright, I'm intrigued enough and will make it a point to take a closer look at the link. Thanks for the formatting, it is beautiful.
I want "Capitalism Part II: Electric Boogaloo!".
I don't get it... but I'm angry at Gulf Coast Power for charging us a $32 fee because we entered the wrong checking account number (although we do have a "payment confirmation" notice, which is why we didn't catch the error), so I agree: Electric Boogaloo
I don't get it either--Aaron is that a popular culture reference? Because if so, that's why.... It sounds cool I just don't know what it is.
Chris,
Have you tried shaking your fist at the power company?
Well I did talk to a very rude and unhelpful black lady on the phone about it. She told me that I don't understand what a payment confirmation is. I told her that it is a confirmation of payment. She continued to act as if I was in elementary school, and it was so strange that I actually started laughing on the phone. I thought about pulling out the whole "I have a masters in engineering" argument, but I didn't want to brag and it wouldn't have gotten me anywhere. I only cared about my money.
Pop culture, I guess...there was a movie in the 80's called "Breakin' II: Electric Boogaloo" which is such a great rhyming sequel title that all sequels need to have it appended to them.
Mostly, I want the myths about capitalism series to continue. Get to it!
Thanks for the explanation. I don't understand most movie references because I've seen about four in my entire life.... I'll see what I can do with part II soon...
"Visualize ... a huge company that already has a large market share because of prior success. They sell all the party hats in a given area. But their party hats are a little shoddy. A middle-aged truck driver decides to sell party hats of his own. He uses premium materials and comes up with a new process for assembly. Large Company pays truck driver to shut up and go away, buys his inventory and patents, etc. It isn't worth Large Company's time or money to purchase the new equipment. People don't get the premium hats."
This actually happens fairly often. One real world example that is similar is the annihilation of family farms via their consolidation into huge corporately-owned factory-farms. A chicken raised on such a farm may very well be of inferior quality, but most of us buy it anyway because it's cheap. For those of us with the money to blow, we are perfectly free to splurge on a "free-range" chicken raised on an "organic" family farm which is of higher quality but must be purchased at a premium.
So to generalize: when a company obtains a monopoly, or a near monopoly, efficiency suffers because of the lack of competition. This inefficiency is usually expressed by the quality of the customer's experience with the product or service. There is always a market for high quality goods, therefore there still exists an incentive for entrepreneurs to enter the market, albeit in a smaller niche.
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