Wednesday, September 17, 2008

Is Free Enterprise Over?

The free market is under attack on every flank. In the minefield of opinions, it is essential to define the free market and capitalism.

"In a free economy, where no man or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined -- not by the arbitrary whim of the rich or of the poor, not by anyone's 'greed' or by anyone's need -- but by the law of supply and demand." - - Ayn Rand, Capitalism the Unknown Ideal, 1966.

Right now, the free market does not exist in America in any of the major markets: Education, medicine, building and planning, energy, money and finance, transportation and the legal profession to name a few. Even small businesses are increasingly regulated and licensed. And beyond that political correctness has made it illegal in many cases to even express a thought. We definitely do not have a free market.

Whatever we have been living in for the last 90+ years is the afterglow of a free market, not a free market. With the formulation of the Federal Reserve Bank and the passing of the income tax law, the free market took a body blow and it has never returned to the realm of American human affairs. Certainly the increase in the unfree market has been more or less gradual. The other body blows were in the 30s, the 60s and increasingly this century.

Today, September 17, 2008, in the Atlanta Journal Constitution Cynthia Tucker, editor, published her editorial: "Private enterprise worship exposed."

"The high priests of capitalism are in sackcloth and ashes, their belief in markets shattered, their catechism of risk-taking renounced. From Wall Street to Detroit, once-devout believers in unfettered private enterprise are running from their religion. Now that their greed has brought the economy to the brink of depression, they want government help.

"What happened to those masters of the universe? What happened to their handmaidens, the Republican politicians who denounced government regulation and read from the holy scriptures as recorded by Ayn Rand?

"This week, sensing shifting political winds, John McCain took to criticizing those Wall Street schemers, imbuing his speeches with a populist rhetoric intended to make you believe he’s always been a firm supporter of government regulation. On Monday, as the Dow was plummeting, McCain was the change agent, the reformer:

"'The regulatory system is broken … We’ve got to catch up the regulatory bodies to make sure that there is the proper oversight and regulation and transparency. That is vital.'

"Actually, that is laughable. In March, McCain told The Wall Street Journal, “I am fundamentally a deregulator. I’d like to see a lot of the unnecessary government regulations eliminated.”

"In a speech a few weeks later, he argued that our approach “should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.”
. . . . .

"So are the masters of the universe who created the vast Ponzi scheme that has entangled Wall Street, Main Street and markets around the world. After decades of fighting off government as intrusive, rigid, bureaucratic and downright dumb, financial titans are begging for taxpayer-backed bailouts.

"After the quasi-bailout of Bear Sterns, they were aghast when Treasury Secretary Henry Paulson refused to bail out Lehman. And they're still betting that the government will come to the rescue whenever another giant company is about to collapse, as it apparently is poised to do in the case of AIG.

"Wall Street kings are not the only ones begging for bailouts. Detroit automakers have also stuck their hands out, proposing that government fork over $50 billion to prop them up. They spent decades fending off efforts from Congress to improve fuel efficiency, insisting that American motorists only wanted huge gas-guzzlers. Now that they can’t sell those SUV-ehemoths, they’re staring at the possibility of financial collapse.

"Perhaps the pendulum is finally swinging back to a widespread recognition that government has a role to play in regulating markets, protecting consumers and providing a social safety net. That lesson comes at a very high cost: lost jobs, ruined retirement portfolios and added taxpayer debt to pay for bailouts.

"Unfortunately, many experts believe the end is not yet in sight; it may be many months before the markets hit bottom and the economy starts a vigorous recovery. But there may be a small benefit in this burgeoning catastrophe: The worship of unfettered private enterprise has been exposed for what it is — just another cult."

Miss Tucker is a very second rate mind for sure. In the world of concepts, one must always define his terms and distinguish what he is writing about from what it is not. Given that Miss Tucker does not do this, she turns out to be nothing but a hack with an opinion. So what! Welcome to the multitudes, Cynthia.

The truth is what is happening with Fannie Mae, Freddie Mac, AIG and others proves the unfree market is a colossal failure. It proves nothing about the free market. Those who should be in "sackcloth and ashes" are those who think you can get away with regulating markets. "Mother Nature," meaning the eternal nature of human being in this case, simply won't allow it.

What Cynthia does not realize is that free markets and free minds are corollaries. When she leaps atop the heap of the jeering crowd, she is advocating the regulation of her mind too.

Another thing she doesn't realize is that markets go with being human. All you can do is allow them via political freedom or drive them underground to a black market. This woman definitely loves slavery!!!

Neither of the candidates advocate freedom in its essentials. It is an idea that is barely known in America let alone the rest of the world at this time. It has never fully existed here or anywhere. The basics underlying it have not been learned and realized as workable yet. But they have been discovered and formulated and interest in them is growing.

1 comment:

Rob Diego said...

Steve, I wrote this to Cynthia earlier today by email:

"And the present situation was not created by excessive regulation? Why don't you ask the politicians in cahoots with Clinton during the 90s who created Fannie and Freddie if it wasn't government that created this situation? That is if you can find the rock they are hiding under. If you think that Fannie and Freddie had anything to do with worshiping the free market, you don't know what the supposed government/private compromise is all about. It is about destroying the free market and creating a quasi governmental institution whose goal is not to give solid loans but to foster "social" policy; which means give bad loans to people who can't pay. Only government could do private lender would do it. And now that the financial institutions that were forced to take these loans are going under, you blame capitalism for it? I'd say the culprit here is not the cultists of capitalism but the cultists of central know the types that give campaign contributions to Clinton and Obama...those guys."