Tag: capitalism

Donald Boudreaux: Cleaned by Capitalism (49m)

Skyler J. Collins (Editor)

This episode features a presentation by economics professor Donald Boudreaux from 2013. Legend has it that capitalism might deliver lots of convenient and wonderful material goods and services, but that one of the costs of these benefits is a more polluted and less agreeable environment. This legend is false. Capitalism is history’s greatest anti-pollutant — in ways that most of us take for granted. Purchase books by Donald Boudreaux on Amazon here.

Listen To This Episode (49m, mp3, 64kbps)

Subscribe via RSS here, or in any podcast app by searching for “voluntaryist voices”. Support the podcast at Patreon.com/evc or PayPal.me/everythingvoluntary.

Open This Content

“Socialism”: The Provocative Equivocation

Bryan Caplan

The socialists are back, but is it a big deal?  It’s tempting to say that it’s purely rhetorical.  Modern socialists don’t want to emulate the Soviet Union.  To them, socialism just means “Sweden,” right?  Even if their admiration for Sweden is unjustified, we’ve long known that the Western world contains millions of people who want their countries to be like Sweden.  Why should we care if Sweden-fans rebrand themselves as “socialists”?

My instinctive objection is that even using the term “socialism” is an affront to the many millions of living victims of Soviet-style totalitarian regimes.  Talking about “socialism” understandably horrifies them.  Since there are plenty of palatable synonyms for Swedish-type policies (starting even “Swedenism”!), selecting this particular label seems a breach of civility.

If this seems paranoid, what would you say about a new movement of self-styled “national socialists”?  Even if their policy positions were moderate, this brand needlessly terrifies lots of folks who have already suffered enough.

On reflection, however, this is a weak objection.  Yes, if a label’s connotations are – like “national socialism” – almost entirely horrible, then loudly embracing the label is uncivil.  “Socialism,” however, has long had a wide range of meanings.  Even during the height of Stalinism, plenty of self-styled “socialists” were avowedly anti-Communist.  The upshot: Even if you were a victim of Soviet oppression, assuming the worst when you hear the word “socialism” is hypersensitive.  And hypersensitivity is bad.

Yet there’s a much stronger reason to object to the socialist revival.  Namely: It’s far from clear that the latter-day socialists do mean Sweden.  While some (like John Marsh) plainly say so, others (like Elizabeth Bruenig) are coy indeed.  Which raises deeply troubling questions, starting with:

1. Are latter-day socialists unaware of the history of the totalitarian movement that shares their name?  Given widespread historical ignorance and the youth of the new socialists, we can hardly rule this out.  A troubling thought; isn’t it negligent to champion a radical idea without investigating its history first?

2. Are latter-day socialists ambivalent about the totalitarian movement that shares their name?  Do they look on the Soviet Union as a noble experiment with unfortunate shortcomings?  How about Chavez’s Venezuela?

3. Do latter-day socialists think of Sweden as a starting point, and something more radical as the ultimate goal?  Are there outright crypto-communists among them?  If so, do their comrades know?  Care?

4. Do latter-day socialists realize that being coy raises the preceding concerns?  Do they care?  Or is the raising of these concerns a “feature, not a bug”?  I.e., they enjoy making people wonder if they’re secret Leninists?

What’s the truth?  While I don’t personally know any latter-day socialists well, I do read a lot of articles in The Nation, which publishes a wide range of modern socialists.  So here are my best guesses about the preceding possibilities.

1. Older socialists (age 50+) know a lot about the actual history of socialism.  The younger ones (age 40 and under), however, know little and care less.  They’re negligent romantics.

2. Most historically-literate socialists are indeed ambivalent about the totalitarian movement that shares their name.  Very few will defend Stalin, but they just can’t stay mad at Lenin, Castro, or Ho Chi Minh.  Even the historically-naive socialists feel pretty good about Cuba today and Venezuela in 2015.

3. Yes, most avowed socialists have a more radical ultimate goal than Sweden.  In our Capitalism-Socialism debate, even the reasonable John Marsh mused about a future that realized radical socialist dreams without degenerating into a typical socialist nightmare.  How extreme, then, are ultimate goals of the unreasonable socialists?  While I really don’t know, videos like this make me strongly suspect that Bernie Sanders is literally a crypto-communist.  Even if I’m wrong, how many latter-day socialists would care if Sanders was a crypto-communist?

4. Latter-day socialists really do enjoy making people wonder about their ultimate agenda.  When you read The Nation, for example, authors almost never specify exactly what policy should be.  Instead, they focus on radical movement in a desired direction, with minimal discussion of their ultimate objective.  In particular, they almost never say what would be “too far.”  Of course, this describes most political movements; they want to rally the troops, not provide blueprints of an ideal world.  But when you cultivate a “radical” image but withhold specifics, you should expect critics’ minds to go to dark places.  Rather than try to calm the critics, the latter-day socialists court their disapproval.  In fact, most seem to positively enjoy the imagined intellectual trauma they’re inflicting on the unbeliever.

On reflection, then, the return of the self-styled socialist is indeed a travesty.  The reason, though, is not that the word is offensive, but that it is deliberately confusing.  If you really thought Sweden was a model society, you would just praise Sweden.  The “socialist” label, in contrast, is a provocative equivocation.  Latter-day socialists adopt it because they would rather insinuate their possible support for totalitarian horrors than earnestly promote an intellectually defensible position.

To what end?  In modern parlance, the latter-day socialists could just be trolling.  This is bad enough, but some socialists probably sincerely believe what they’re insinuating.  Or worse.  If all you want is Swedish social democracy, making common cause with such socialists is a grave mistake.

Open This Content

Donald Trump, Socialist

Thomas L. Knapp

“Tonight, we renew our resolve that America will never be a socialist country,” US president Donald Trump announced in his State of the Union address in February.  His base, as he had hoped, cheered him on in setting himself up as foil to Bernie Sanders and Alexandria Ocasio-Cortez.

In the three months since, though, Trump has doubled down on his own socialist policy proposals. On trade and immigration, he’s 21st-century America’s most strident — or most empowered, anyway — advocate of an indispensable tenet of state socialism: Central planning of the economy by the government.

Trump wants the government to control what you buy and who you buy it from. Thus, his “trade wars” with Canada, Mexico, the European Union, and China, powered by tariffs intended to advantage “Made in America” goods (and their politically connected makers) over others.

Now he’s announced a plan for “merit-based” government control of immigration under which bureaucrats in Washington decide how many, and which, immigrants the American economy “needs,” instead of leaving such decisions to markets and individuals.

In the past I’ve bemoaned the fact that “socialism” has come to mean such different things to so many different people. From its 19th century definition of  “worker ownership of the means of production,” it’s been continually re-defined to characterize everything from Marxist-Leninist totalitarianism to a more all-embracing “democratic socialist” welfare state powered by heavy taxation on “the rich.”

That’s a pretty broad net. But except among anarchist socialists, state control of the economy is the axis on which all versions of socialism turn, and Trump is clearly all-in on the idea.

He even lends a socialist cast to the  excuses he makes for his economic policies. He continually positions himself as protecting workers from the “dog-eat-dog” competition of capitalism (while avoiding using that word negatively). By adding an emphasis on political borders to those excuses, he changes the discussion from “labor versus capital” to “American labor versus foreign capital.”

That approach is nothing new. See Stalin’s “socialism in one country,” for example, or the marriage between central economic planning and nationalism characterizing the fascism of Mussolini and Hitler.

America’s Republican president campaigns against socialism while attempting to implement it. Meanwhile, America’s progressives  campaign for socialism while attempting to thwart actual worker ownership of the means of production (e.g. the “gig economy”). Talk about cognitive dissonance!

Notice what’s missing from the discussion on both major “sides”: Freedom.

Freedom to move within and across political borders.

Freedom to trade within and across political borders.

Freedom to plan our own lives and live them instead of turning that power, and that responsibility, over to the state.

Neither major political party even convincingly pretends to care about those fundamental human rights anymore.

The entire public discussion revolves around what the politicians should “allow” or “forbid” the rest of us to do next, based on an unquestioning assumption of their moral authority to make such decisions for us.

Unless we break that cycle, we’re on our way into the next Dark Age.

Open This Content

Education Entrepreneurs Are the Only Ones Who Can Disrupt the Status Quo

Kerry McDonald

Transforming entrenched systems and industries comes through disruptive innovation and entrepreneurship. Coined by Harvard Business School professor Clayton Christensen, disruptive innovation is the process by which new ideas and inventions create value and ultimately topple existing competitors. A visionary individual or group spots opportunity and develops new solutions that meet consumer demand faster, better, and more cheaply. This innovation improves our lives through efficiency and cost-effectiveness, allowing us to keep more of our hard-earned money with better service and satisfaction.

Independent and Innovative Education

It shouldn’t come as a surprise that most of the organizations I highlight in Unschooled are independently run. Disruptive innovation may originate with individual ingenuity, but it is fueled by consumer demand and value creation within the private sector. Not that the public sector hasn’t tried. Back in the 1960s and early 1970s, there was a surge of interest in reforming mass schooling from within. The Open Classroom movement emerged, encouraging less restrictive classrooms and more choice and freedom for students.

In Philadelphia, Pennsylvania, in 1967, the city’s public school system launched its Parkway Program, sometimes known as the “school without walls,” in which young people were able to select their own classes and learn throughout various spots across the city, including private businesses, museums, local universities, and public spaces. In 1970, the New York Times called the Parkway Program “one of the nation’s boldest experiments in public education,” noting that over ten thousand students applied for only five hundred available slots.

Any meaningful and lasting transformation in American education must come from the private sector.

Within a decade, though, momentum for programs like Parkway waned. New public education fads appeared and old ones faded. Ultimately, Parkway was reabsorbed into the larger school district, becoming indistinguishable from Philadelphia’s other public schools.

More recently, a fully self-directed district high school that I also write about in Unschooled was set to open this fall in Somerville, Massachusetts, a city just outside of Boston. Powderhouse Studios had everything going for it, including relief from onerous public schooling requirements under the state’s Innovative Schools legislation and a $10 million grant from XQ Super School, an organization co-founded by Laurene Powell Jobs, wife of the late Steve Jobs of Apple, Inc. After seven years of concessions and compromise by the school’s leaders, the city’s school committee ultimately voted unanimously this spring not to approve Powderhouse’s opening.

Private Sector Reforms

As much as many parents and educators would like to believe that meaningful reforms can occur within the mass compulsory schooling model, real education innovation occurs most successfully and enduringly through the private sector. Free from state curriculum requirements, standardized testing mandates, and restrictions on hiring and firing, private educational organizations are able to experiment and innovate, with parents as the key stakeholders to ensure accountability.

Many of these schools and organizations are tiny non-profit enterprises that serve a small group of children and are often financially inaccessible to many families. But disruptive innovation in education has the capacity to bring real change to the masses—if educators embrace an entrepreneurial, free-market mindset.

In his book, Conscious Capitalism: Liberating the Heroic Spirit of Business, Whole Foods co-founder John Mackey writes about his early days immersed in the left countercultural movement of the late-1960s and 1970s. He lived on a commune in Texas for two years and became active in the local food co-op movement.

Entrepreneurship and Capitalism

Mackey writes in the book’s introduction:

Politically, I drifted into progressivism (or liberalism or social democracy) and embraced the ideology that business and corporations were essentially evil because they selfishly sought only profits. In contrast to evil corporations, I believed that nonprofit organizations and government were “good,” because they altruistically worked for the public interest, not for profit.

The longer Mackey was part of the non-profit food co-op movement, the more disenchanted he became with its ideology. He writes:

I ultimately became disillusioned with the co-op movement because there seemed to be little room for entrepreneurial creativity; virtually every decision was politicized.

Discovering the power of free-market capitalism, Mackey was able to scale his vision for healthy food and a healthier planet in ways that small, local, non-profit food co-ops were unable to, leading many more people to have access to organic food and many more jobs created to provide that food.

Mackey writes about his path from progressive anti-capitalist to proud entrepreneur:

I learned that free enterprise, when combined with property rights, innovation, the rule of law, and constitutionally limited democratic government, results in societies that maximize social prosperity and establish conditions that promote human happiness and well-being—not just for the rich, but for the larger society, including the poor. I had become a businessperson and a capitalist, and I had discovered that business and capitalism, while not perfect, were both fundamentally good and ethical.

Education needs its own Whole Foods moment. It needs entrepreneurial innovators to move small, non-profit organizations into larger-scale, profitable enterprises that serve more families and students with better outcomes and lower costs. Now with Amazon’s acquisition of Whole Foods, the potential for greater accessibility at lower costs increases.

Seeds of an enterprising moment in education are beginning to sprout. Acton Academy is a low-cost, self-directed network of private schools, often operating on a hybrid homeschool model, that is expanding across the country by educators committed to entrepreneurship and educational creativity. In an article for Forbes, Bill Frezza describes Acton Academy’s potential to remake the educational landscape. He writes:

With the right program as a model, anyone who home schools his kids can operate an Acton Academy. And not just for his or her own children, but for a schoolhouse full of them. Run the numbers and you can even make a lucrative living while charging tuition well below than that of most conventional private schools.

Standardized Equals Restrictive

Similarly, the Academy of Thought and Industry is a for-profit network of schools that could trigger necessary disruption in education. Founder Michael Strong acknowledges the power of profit-driven free enterprise to create lasting educational change that is higher-quality, lower-cost, and ultimately scalable. He says:

Any time something is profitable, that is what makes it able to go to scale. The reason we have low-cost groceries now (compared to 100 years ago) is because it’s profitable to bring food to millions and millions of people.

Any meaningful and lasting transformation in American education must come from the private sector. Public schools have tried to innovate; yet compulsory mass schooling has become more restrictive, standardized, and all-consuming of American childhood than at any other time in our history. To enact real, scalable change in education—just as Whole Foods did with the organic food movement—entrepreneurial parents and educators will need to imagine and implement new models of learning. These models must be rooted in the time-tested principles of free-market capitalism, or what Mackey describes as

the heroic nature of business, its essential virtues, and its extraordinary potential to do more good for more people in a sustained manner than any other social or economic system ever invented by humankind.

Entrepreneurs can help to replace an obsolete schooling model of education with a new learning one fit for the innovation era. In fact, they may be the only ones who can move us from where we are to where we could be.

Listen to Kerry McDonald discuss unschooling with FEE president emeritus Lawrence Reed (12:00 mark):

Open This Content

The Noble Crony: Big Business on the Politics of Business

Bryan Caplan

Tyler’s Big Business insists that the influence of business over American government is greatly overblown:

I am against virtually all manifestations of crony capitalism, but I’m also not sure people are getting the basic story right. Business does have some real political pull, but the basic view that big business is “pulling the strings” in Washington is one of the big myths of our time. On closer inspection, most American political decisions are not in fact shaped by big business, even though business does control numerous pieces of specialist legislation. Voters drive most of the major decisions about the government budget, more so all the time as entitlement spending consumes more of the federal budget. In reality, corporations, as they relate to our federal government, are devoting more and more of their time and energy to minimizing legal risk, deciphering complex government regulations, and trying to avoid major economic losses from adverse decisions coming from Washington or state and local governments.

Big business doesn’t secretly run the Republican Party:

For instance, for years many critics alleged that big business controls the Republican Party. Yet even though the Republicans nominated Donald Trump to run for president, as of late September 2016 not one Fortune 100 CEO had donated to Trump’s campaign, whereas in 2012 about one-third of them had supported Romney by that point. Why did Trump win the nomination? It is obvious: because the voters supported him to a sufficient degree.

Getting meta:

Steven Pearlstein, commonly a critic of big business and former economics columnist of the Washington Post (and currently my colleague at George Mason University), wrote in the fall of 2016: “Indeed, one irony of the 2016 election is that populist antipathy toward corporate America seems to be peaking at precisely the moment when corporate influence on government policy is as low as anyone can remember.” And Jeffrey Immelt, the former CEO of General Electric, wrote in a 2016 shareholder letter: “The difficult relationship between business and government is the worst I have ever seen it.” William Daley, chief of staff in the Obama White House, opined, “Honestly, I don’t think big business matters much anymore.”

I believe these views are exaggerations, as the relationship between big business and Washington has some inevitable cyclical elements, as perhaps those commentators would themselves admit. For instance, after those statements were issued, the Trump administration responded with a tax plan that was very favorable to business, especially large multinationals, and business interests responded with enthusiastic support. So at the time I am writing this chapter, American policy is in some ways especially heedful of business interests, as indeed is sometimes the case. If the influence of business is again high by the time you are reading this book, keep in mind that most of my discussion is focused on what is the most typical state of affairs.

Even in 2018, big business is hardly dominating the agenda. America’s corporate leaders often promote ideas of fiscal responsibility, free trade and robust trade agreements, predictable government, multilateral foreign policy, higher immigration, and a certain degree of political correctness in government, all ideas that are ailing rather badly right now. Again, you can expect some cyclical ups and downs, but the losses sustained by these causes is a sign that big business is not in charge. The resurgence of interest in doing something about national infrastructure is another example of a business priority surviving in the national debate, but it may or may not happen, and it seems to depend more on the personal priorities of Donald Trump than the strength of the business lobby. Even if a major infrastructure program does break through and become policy, it will have taken decades for this talk to have come to fruition.

Once again, though, I say Tyler sells business short.  There are major policies where the business community prevails over the popular will.  Indeed, there are major policies that would be helpless political orphans without the patronage of business elites.  But happily, business has both prudence and justice on its side.

Land-use policy is the clearest case.  If the construction industry were not tirelessly clawing for the right to build homes and offices, regulation would have long since choked off development.  Psychologically normal people cotton to virtually all complaints about new construction.  “Traffic!”  “Noise!”  “Harm to the environment!”  “Hurting property values!”  “Crowding our schools!”  “Not in My Backyard!”  Only lobbying from builders counters this mad populist negativity, allowing the creation of the structures in which we all reside.   Thank you, business.

The same goes for labor market regulation.  Psychologically normal people love minimum wages, firing restrictions, mandated benefits, and the right to sue your employer.  But these regulations have awful side effects – especially unemployment.  Without business resistance to this feel-good legislation, the U.S. would likely be stuck at 10% unemployment or worse.  Thank you, business.

Finally, don’t forget immigration.  While business hardly favors open borders, it almost never opposes existing immigration – and routinely argues for a bit more.  How much does this sway policy?  Probably a lot.  Most obviously, without the nay-saying of immigration-dependent businesses, the Republicans would probably have probably passed the RAISE Act years ago.  Thank you, business.

Why doesn’t Tyler say any of this?  My best guess is Straussian.  He knows that business makes policy better – but he also knows that business influence works best in the shadows.  Hailing the political benefits of business puts those benefits at risk.  Sadly, perhaps he’s right.

Open This Content

The Gig Economy is What Yesterday’s Socialists Said They Wanted; Why do Today’s Socialists Hate it?

Thomas L. Knapp

A February Harris poll finds that 49.6% of Millennial and Generation Z Americans would “prefer living in a socialist country.”

US Senator Bernie Sanders (I-VT) and US Representative Alexandria Ocasio-Cortez (D-NY), among other politicians, proclaim a message of “democratic socialism,” evoking an ideology last ascendant in the early 1900s when Eugene Debs and Norman Thomas moved the needle in US elections.

But the devil is, as always, in the details. The goals of today’s American “democratic socialism,” as laid out in Ocasio-Cortez’s Green New Deal resolution, in Sanders’s “Stop BEZOS Act,” etc. look a lot more like Franklin Delano Roosevelt’s effort to “save capitalism” through welfare statism than like the proposals of socialism’s last rise to prominence.

The essence of socialism as laid out by Proudhon and Marx and promoted by the International Workers of the World, et al., came down to destroying the wage system and building a classless society based on worker ownership of the means of production.

Those earlier socialists would almost certainly have lauded gig economy workers as examples of what socialism sought. Today’s socialists disdain them.

Consider gig economy drivers, once just called “gypsy cabbies.” In recent years many of them have chosen to affiliate with services like Uber and Lyft to get easier connections to people seeking rides.

Gig economy drivers own the means of production (their cars).

Gig economy drivers set their own hours and choose their own workplaces instead of slaving away on  someone else’s terms.

Gig economy drivers can use customer discovery services like Uber/Lyft, or they can go their own ways (many Uber drivers give me their cards, telling me to call them directly next time and cut out the capitalist middleman).

But today’s “democratic socialists” fought tooth and nail to preserve the capitalist “medallion cab” monopoly, and having lost that fight they’ve re-oriented their struggle toward roping the drivers, and the companies they choose to work with, into the old-style capitalist “wage employee” system.

Even the most virulent revolutionary Marxism posited that the state would wither away as workers seized the means of production, got rid of the bosses, and started working for themselves. That didn’t work out — the socialist parties ended up substituting themselves for the old ruling class, operating in the name of, but not as true proxies for, “the workers” — but that was the goal.

In the US, the same kind of substitutism came about “democratically” and incrementally as “progressives” co-opted pieces of socialist-sounding reforms. But just like the Marxist-Leninist parties in the old Soviet orbit, today’s “democratic socialists” are … well, conservative.

They don’t want the wage system to go away. They just want to run it.

They don’t want the workers to own the means of production. They just want to tax and regulate it.

They don’t want a classless society. They just want to be the new ruling class.

US president Donald Trump is already touting the 2020 presidential election as a referendum on “socialism.” Are any real socialists going to show up for that fight?

Open This Content