I think I have found a concept that supports my ideas on how capitalism should work. Allan Meltzer’s book on “Why Capitalism” is quite good. He creates a solid argument on how public and private actions can benefit the whole.
Critics of capitalism have plenty of fodder today to “invoke” the need for regulation. The pathology is collective, due to the fact the humanity is fallen. Sin entered our nature at the fall of Adam and continues to be prevalent. However, to try and create an argument for Socialism, Communism, or even a benevolent dictator will not lead to greater freedoms, but higher levels of Serfdom.
The effect of Stalinism on Russia is well documented. It is rumored, not proven, the Stalin murder more people then Hitler. My family escaped Russia during Stalin’s reign. As Volga River Germans they new that a collective life in a Gulag was their future. Therefore, my grandmother’s father took a chance and bribed a Bolshevik guard to help he and his family escape into Poland.
Meltzer argues that “Anti-capitalists err in three ways: first, by ignoring Kant’s warning about human imperfection; second, by ignoring individual differences while substituting in the name of proclaimed goals such as equality, fairness, or justice rigid direction in place of individual choice. Justice and fairness are imprecise terms subject to individual interpretations with no fixed standard. Their third error comes in practice: the choices of the ruler often have to be enforced using fear, terror, prison, or punishment.”
On the other hand Democratic Capitalism has the ability to alternate as required to balance market forces with social need. This means that when needed, government can be more intrusive. The people decide when to regulate and not regulate, tax or not to tax. As Meltzer argues, “Democratic capitalism alternates between more or less intrusive government, based on overall voter preference for more or less redistribution, or higher or slower growth, usually based on just past results.”
Dogmatists would say this is not true capitalism. I really don’t care. I am a pragmatist who recognizes the imperfect nature of humankind. Therefore, we need checks and balances to ensure a society that is utilitarian. One could ask what the difference is between State capitalism and Democratic capitalism? Obviously it is the one making the decision. If the State is the primary decision maker then it will decide the level of distribution of wealth and freedom. If the decison-making process is Democratic, then the people have the choice.
If we place these two ideas in a juxtaposition I know which one I would choose. How about you?
And that is my thought for the day!