Difference between revisions of "Notes:BC1.EF.Capitalism"

Revision as of 09:55, 17 December 2014

Capitalism has two main features

1. A free market
2. Entrepreneurial disruption

• Milton Friedman

"Exchange can therefore bring about co-ordination without coercion. A working model of a society organized through voluntary exchange is a free private enterprise exchange economy- what we have been callig competitive capitalism." (Freidman, Capitalism and Freedom, chapter 1, pg. 13)^[1]

• George Gilder

"The exigency, complexity, and multiplicity of life on earth become yearly more unfathomable to any tyrant or planner. No nation can grow and adapt to change except to the extent that it is capitalistic; except to the extent, in other words, that its productive wealth is diversely controlled and can be freely risked in new causes, flexibly applied to new purposes, and steadily transformed into new shapes and systems"
George Gilder; Wealth and Poverty, Chapter 1, pg 6^[2](emphasis added)

"The great Austrian political economists von Hayek and von Mises, like Milton Friedman in Capitalism and Freedom, were all eloquent in their critique of collectivism and their celebration of liberty, but they were uncertain of what it is for; their argument tended to be technical and pragmatic. Freedom is good in itself and also makes us rich; collectivism compounds bondage with poverty. None of these writers saw reason to give capitalism a theology or even assign to its results any assurance of justice.

"None of them cogently refuted the thesis that the greatest of capitalists--the founders of the system--were in some sense 'robber barons.' None convincingly demonstrated that the system succeeds and thrives because it gives room for the heroic creativity of entrepreneurs." pg. 7.

I.e. Friedman is saying that economic freedom is good in itself, but does not point out that it succeeds because of the creativity of entrepreneurs. Without the entrepreneur, growth would not occur. see quote from pg. 6 above

Capitalism is hedonistic. Irving Krystol:

"Can men live in a free society if they have to reason to believe it is also a just society? . . I don't think so. . . . . they cannot for long accept a society in which power, privilege and property are not distributed according to some morally meaningful criteria."

I.e., Capitalist freedom undermines capitalism because it defines no moral basis for its results, and because its successes are really dependent not on liberty but on bourgeois disciplines and restraints--diligence, integrity, and rationality--all inconsistent with the drives and appetites of the unfettered consumer in a heat of commerce . . " It leads to a vulgar and decadent civilization.

leftist critique: Capitalism also perpetrates racism, sexism, inequality, and environmental abuse, brings inflation and unemployment and prevents large-scale planning needed in these times of crisis. It creates inequality between rich and poor, rich countries and poor ones, men and women, and destroys balance between man and nature.

And both the liberals and defenders of capitalism agree that capitalism lacks a foundation in morality and religion and therefore engenders a shallow order of human life. It is based on greed.

But Walter Lippmann says:

"Until the division of labor had begun to make men dependent on the free collaboration of other men, the worldly policy was to be predatory. The claims of the spirit were otherworldly. So it was not until the industrial revolution had altered the traditional mode of life that the vista was opened at the end of which men could see the possibility of the Good Society on this earth. At long last the ancient schism between the world and the spirit, between self-interest and disinterestedness, was potentially closed."^[3]

The golden rule of economics: The good fortune of others is also one's own.

1. ↑ Friedman, Milton. Capitalism and Freedom. Chicago. The University of Chicago Press. 1962, 1982, 2002.
2. ↑ Gilder, George. Wealth and Poverty, A New Edition for the Twenty First Century. Washington, DC. Regnery Publishing Inc. 2012
3. ↑ Lippmann, Walter. The Good Society. xxxxx. Little Brown. 1937