Rob Chrisman: Let’s not call it ‘capitalism’ |

Rob Chrisman: Let’s not call it ‘capitalism’

Rob Chrisman
Other Voices

Perhaps, given the ostensible interest in socialism we currently see, it’s time to forsake using the above term, and instead, adopt something that is more accurate and explanatory.

I propose unhampered free market economy instead.

This name highlights the major features of capitalism without carrying the baggage that leftists have tried to attach to it. The unhampered free market economy has the following characteristics:

It involves only voluntary actions and exchanges.

No one in the current crop of Democratic presidential candidates is even remotely friendly to unhampered free market economy concepts, and several want to put the mixed economy on socialistic steroids.

It fosters unfettered entrepreneurism, i.e. the ability to make business decisions in the absence of crippling regulations and government controls.

The ultimate goal of economic activity is serving consumers, i.e. trying to find the best match for what is offered as goods or services and what consumers desire.

It provides abundant opportunity for workers to achieve their financial goals without risk — it is the entrepreneur who pays the worker up front and takes all the risks that the enterprise will not satisfy the consumer and may ultimately fail.

A primary motivation for changing terminology is actually the fact that when government intervenes in the economy, it is capitalism, and not the mixed economy (i.e. a mixture of freedom and controls) which takes the blame, when the system we have is actually nothing like a true unhampered free market economy.

The nature of government intervention is that each intervention spawns unintended (and often unforeseen) consequences. The government’s reaction is almost always another, supposedly corrective, intervention. When that too fails, it is capitalism that gets the blame. A classic example is the attempt to control prices and wages by President Nixon in the 1970s.

In a previous article on these pages, I referenced something called the socialist calculation problem. Since full-blown socialism, in that it calls for the state ownership of the means of production, is, in fact, the mirror opposite of a true unhampered free market economy, explaining how this problem works is more than appropriate.

As explained by the famous economist Ludwig Von Mises, “the pricing systems in socialist economies were necessarily deficient because if a public entity owned all the means of production, no rational prices could be obtained for capital goods …” Stated more simply, without market prices for production equipment, it is impossible to set consumer prices that properly account for the costs of production, leading inexorably to what amounts to bankruptcy for the state in the long run.

When converting to socialism, initially all might seem well, but its failures ultimately degenerate into chaos and, the more stringently it practices this dogma, to a totalitarian state. The current best example is Venezuela. Twentieth century examples include the Soviet Union and Maoist China.

We should categorically state that it is wrong-headed to call the Scandinavian countries socialist — they are in fact mixed economies, only with somewhat larger welfare states than we yet have in this country. Large segments of the economy in these countries are privately held and fewer economic interventions actually occur than here, such that they are ranked higher using an index of economic freedom than the U.S.

You should not be surprised that few or none of these facts about socialism are taught in most academic institutions these days. Your college history or social science instructor is much more likely to be a Marxist than a critic of socialism.

Those of you who were not alive in the Cold War era will be shocked once the realities of life under socialism are revealed to you. None of the plethora of consumer choices you now enjoy will any longer exist. In Soviet East Germany, for instance, for the few who could afford private transportation, there was one, and only one automobile available. It was called the Trabant and the quality was atrocious: “The 1980s model had no tachometer, no headlights or turn signals indicator, no fuel gauge, no rear seat belts, no external fuel door, and drivers had to pour a mix of gasoline and oil directly under the bonnet/hood.” (Wikipedia)

Critics of capitalism routinely decry the supermarket aisle with its hundreds of breakfast cereal choices as being redundant. Rest assured that this will no longer be a problem under socialism. Choosing among a host of attractive alternative goods of any kind will be a thing of the past.

No one in the current crop of Democratic presidential candidates is even remotely friendly to unhampered free market economy concepts, and several want to put the mixed economy on socialistic steroids. You would be wise to mind who you vote for.

Rob Chrisman lives in Nevada City.

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