Has Capitalism Failed

by Robert Villegas

  Where will Citizen 2 be when the producer in the society decides to go elsewhere and live on another island? Will he demand that I put Citizen 1 in a cage? Will he demand that Citizen 1 be forced to work for the sake of Citizen 2 with me holding a spear to his back at all times?

  When a government pretends to “care” for citizens by means of force, it must violate the rights of some citizens who must do the caring. It must turn the previous winners into losers. The new winners are those who were the losers in a division of labor society and since they are not offering society their competitive labor, the entire social structure will decline. What rational citizen would participate in a society moving toward plunder?

  The idea that re-distribution is an expression of “justice” is actually a violation of justice. A proper government can never be allowed to pick winners and losers; and the way to prevent this is to have a complete separation of economy and state, to forbid the government from creating any program, regulation or agency that takes from one citizen and gives to another.

  If you look at virtually every problem we have had for over 100 years in this country, it was the violation of individual rights that has caused it. If you look at the entire history of mankind before the invention of the United States, mankind never had the concept of individual rights and the lack of this principle created the squalor and slow progress of man throughout the ages.

  Today, this violation of individual rights includes political corruption, campaign finance scandals, progressive taxation, government regulations, trade tariffs, the welfare state, boondoggles, corrupt lobbyists, bribery, extortion, destroyed neighborhoods, destroyed families, voter fraud and pork. None of these would have existed had it not been for the government’s ability to violate that contract that forbade the violation of individual rights.

  So we arrive where we started. My original comments about progressive policies of re-distribution were made because I can see that we are in a dangerous situation today. The progressives and their professional parasites will take everything away without a second thought. The young lady with whom I was talking did not realize that what is happening today is not mere “giving” or “helping”; what is happening is the most massive transfer of wealth in the history of the world. We will have to produce our way out of it and it may take several decades - if we ever get back to a free economy again. If things keep going the way the progressives have designed, we will be a third world country very soon. This may be hard to believe for people who have always had a good life; today’s generation, most of whom have never been to a third world country. But when the people who work realize that everything above bare subsistence will be taken away, they will only work for bare subsistence. Look at the former Soviet Union that lived like this for over 60 years.

  The progressives want prosperity but they want it in a society in which they control productive people. Some call it socialism and others call it fascism. What it amounts to is the destruction of the productive citizen. Control is the opposite of freedom and it is only freedom that brings prosperity. This is because freedom and capitalism enable people to make their own economic decisions, keep the product of their labor and engage in an efficient division of labor and trade. As we saw in our island example, control destroys the division of labor and stifles trade.

  Is it mere money that progressives want to re-distribute? Is it merely things, paper printed in green ink that they want to create more of? No, what the progressives want to re-distribute is time and energy, precious time and precious energy; in short, life. Every dollar they print is a dollar taken away from the time and energy of the citizen who produced it. Each individual only has so much of these values. To re-distribute income is to tell the productive citizen that his time and energy do not belong to him. Don't ask the citizen, then, to plan for the future, to work hard, to save, to invest and to think about doing better. When the productive citizen sees that he is working harder to take care of other people who do not work hard, he will make the choice to slow down. Do you blame him?

  Notes on Individual Rights and Statism

  When it comes to the philosophical branch of politics, you are either for freedom or you are for slavery. There is no middle position. You can't live with a little bit of poison and an equal amount of healthy food in your system. You cannot compromise with a person who wants a little bit of your freedom. You can only compromise with a person who wants to leave you free. If you think you can live with a little bit of government force in your life, you don't understand that those who favor coercion will not be satisfied with just a little bit of your freedom. Once you grant the principle, they can take it all away from you and leave you with no argument against them.

  No good comes from coercion. Good is only possible with freedom. That is because freedom means the freedom of your mind to think and to create your survival. Anything that denies this freedom is evil; not just a little evil but fully evil. The forcible denial of your freedom is based on a hatred of your mind and of your life. This has been proven by history.

  The principle of coercion animated the 20th century which was one of the deadliest and most destructive centuries in mankind's history. We are now repeating the mistakes of that century by glorifying state power. We, in this new century, will suffer a like destruction if we do not change our course. The lies about America, the Constitution, capitalism and freedom made by the left are intended to diminish these values in your mind so you will accept the moral authority of people who want to take your freedoms away from you. On this issue, the issue of freedom vs. slavery, you must take a firm stand for freedom and allow no compromise. Otherwise, you will be a slave.

  Whoever wants a peaceful, civil society has to fight against the principle of statism. Statism is the idea that the government has the authority to interfere in the lives of citizens by means of force. Both the left and the right in our government today are representatives of statism; and the only principle that stands opposed to it is laissez faire capitalism. If you are going to fight lawlessness and barbarism you must fight for laissez faire capitalism. You must be a radical for capitalism.

  The forces of statism have deceptively established themselves as fighters for the “good.” They claim to represent the life-loving elements in society that have been oppressed and exploited. They arrogate to themselves the principle of a caring government that is trying to establish “justice” and “fairness.” They even put forward a tenuous concept known as "the planet" which it holds above the rights of individuals.

  The one principle that characterizes all statists (progressives of all varieties including communists, fascists, socialists, welfare-statists, as well as their modern versions such as Democrats, liberal conservatives and even Hillary, Bernie and Donald) is the principle of coercion. Coercion is considered only one of the possible means of establishing good in society. This is a false view that inevitably leads to failure.

  You can always tell a statist because he will never tell you he stands for coercing people. Decades ago he learned that he could not gain power by openly standing against freedom. So he advanced his ideas by deceptive speech, claiming that his policies improved capitalism and brought new freedoms. This is the tactic of “incrementalism” that advocates smaller impositions and restrictions in order to slowly move the government toward full control. Statists hide their real intent by promising that their coercive methods would create more affluence, bring more jobs and stimulate innovation. They talk the language of capitalism but with regulations “designed” to “improve” the system. This is the essence of statism; it promises rights, equality, freedom but all such promises can only be accomplished by some form of coercion.

  And this point is an excellent focal point when debating with a statist. Their arguments for making things better are false because they use coercion which always makes things worse. Coercion is force that violates free choice and that means the suppression of rational action based upon self-interest. By “forcing” them into to the posit
ion of advocating force, you can expose their practices as impractical and harmful. Force never yields good results unless it is self-defense.

  Statists try to sell coercion by holding it to be some sort of magic wand that will make things better. But what the statist considers “better” always favors the unproductive people and harms those who provide the favors. Therefore, statism, coercion and government interference in the economy will always cause harm to individuals and the economy.

  For instance, fascism is an endless manipulation of the economy that falsely touts the power of government to improve things by directing the actions of business owners. Fascists pose as “practical” people who merely want to make the system better; oblivious to the fact that every coercive move they make accomplishes the opposite of their stated goals.

  Fascists don’t care about individual rights…though they may claim to do so. Their only goal is to control all aspects of our lives in whatever way they can get away with. The idea that the individual owns himself is the one idea they ignore and deny with their every utterance about the glorious utopia they are working to bring about. Fascists countenance a collective utopia where all minds meld into one euphoric whole waiting for the magnificence of the socialist end that never comes.

  The most common principle used by statists of all varieties is the principle of sacrifice. All statists operate according to the collectivist lie that people must get together in order to solve the problems supposedly created by capitalism. For the statist, the collective is the ideal; it is the principle that people must accept. If you criticize a statist he merely claims to be helping the poor, the defenseless, the victimized, the children, the uneducated, etc.; and this is supposed to mean that you should not challenge him because he is trying to be practical and obtain real results which means the poor are helped and the world is made better. This is a lie. They tie their programs to a moral issue so they can obtain the moral high ground and manipulate their opponents to the moral low ground.

  Through this argumentation, they ignore one important point: their ideas are not tied to reality and they don’t obtain the practical result they claim. For instance, look at Hillary Clinton. She considers herself to be the most practical politician around. Her approach would be to stifle long-term growth for the sake of buying a few votes through promises to fix (by force) some things in the economy.

  In an article about Hillary Clinton’s economic plan, we read:

  “1. Boost Economic Growth. Give tax cuts to the middle class and small businesses, establish an infrastructure bank, and fund more scientific research. Help women enter the workforce by requiring companies to pay for family leave. The College Affordability Plan would spend $35 billion a year to refinance student debt and pay states to guarantee tuition. The National Infrastructure Plan would allocate $27.5 billion annually to improve roads, bridges, public transit, rail, airports, the Internet, and water systems. The Expanded Childcare Plan and the Early Education Plan would spend $27.5 billion a year for states to make preschool available to all 4-year-olds and expand Early Head Start. Expanded Funding for IDEA would spend $16.6 billion a year to identify and treat children with disabilities. The Energy Plan would pay $9 billion annually to repair oil pipelines, reduce carbon emissions, and fund health and retirements for coal workers.”[25]

  Hillary’s policies are essentially pragmatic attempts to put plugs into the damn. They will not make things better by any means. Giving tax cuts to the middle class, for instance, is what Democrats and Republicans have been doing for decades. They are merely carting out this old “horse” again and again, using it to garner as many votes as possible but it will have no significant influence on the economy except that it will not improve it.

  What the government can’t collect through taxes, it will collect through the printing of money which means borrowing from the American people and increasing deficits. What it gives them back in taxes it will take away by diluting the value of the currency. Secondly, they really don’t mean it. As in the past, politicians offer to reduce taxes in order to get votes. Once they gain power, they will find various ways to increase taxes. This will not improve the economy.

  The idea that we need to establish an infrastructure bank in order to finance improvements in highways, bridges, etc. is similarly not going to improve the economy. First, we must understand that someone has to provide the funds for this “infrastructure bank” and that would be you, the taxpayer. Secondly, why do we need government to decide which are the best bridges to fix and highways to re-pave? How will they make these decisions? More than likely, it will involve cronyism and political favors – all of which produce nonproductive jobs. In effect, we will pay people to have jobs but we won’t be focused on whether they are the right projects and whether the jobs are even good jobs. All that matters here is jobs and people getting money to spend which will presumably create a better economy.

  But these infrastructure jobs will not create new spending because the funds for them are taken from other people who would have spent it anyway. So no boost to the economy, just lots of propaganda and media stories about how great each new project will be. Better to just leave the money in the hands of the taxpayers and let local communities decide how to fix their own roads and bridges.

  So Hillary’s infrastructure bank will do no good. What about funding more scientific research? This is an old idea that is resurrected every election so the candidates can make us think that spending money on scientific research will actually do some good. Certainly, some government-funded projects have provided benefits that were successful in the marketplace but this is rare. Government support of “worthy” projects is often the factor that kills them. First, government must decide what is a worthy project and these decisions are often based upon political, not rational, considerations. Government cronies are good at using political power to shovel large amounts of money to their projects, many of which are created specifically to obtain those funds. Some “scientists” are also bought and paid for by government to mouth the policies and goals of government rather than do actual research. Additionally, many of the “products” that government supports do not mirror the needs and wants of consumers – so the subsidized businesses fail.

  Scientific research is better left to private research and development firms that seek profits. These companies will actually develop real knowledge that leads to new products with market potential. The taxpayer does not have to pay for these advances.

  Certainly, increasing family leave benefits for women must be paid for by the corporations. Such benefits make women into welfare-recipients with corporations paying out of profits. Who will defend the rights of the corporations? No one. Yet they must raise their prices in order to provide these government-mandated benefits. Long-term, the consumer must suffer through increased prices.

  The College Affordability Plan and all the other plans mentioned are merely more government programs that must be paid for by taxpayers. Leave it to politicians to come up with plans that do little but re-distribute money from the productive taxpayer to the government and its cronies. You can bet there are plenty of campaign donors waiting in the wings for these windfalls. The bottom line is that all of these programs are nothing more than empty promises.

  The singular common denominator of all of these “wonderful” plans to help the middle class is nothing more than coercion, force against productive citizens; the taking of their money in order to provide an illusory benefit that does little good. This is not how to run an economy and it is certainly not how to help the middle class.

  The principle of individual rights is the highest moral/political principle of all. To violate individual rights is to be evil. Individual rights are the basis of civil society and without them a society will devolve into barbarism, plunder and group warfare. If people do not fight for their individual rights, not only will they lose those rights, they will suffer the consequences: authoritarian government ushered in by economic and social decline. History
has proven this.

  Obama's Role in the Economic Crisis

  The economic fiasco started in September of 2008 represented the failure of socialism; the idea that you can take from capitalists the money “needed” to "help the poor." This idea, as it was implemented through the Community Reinvestment Act (CRA) was a Marxist maxim inaugurated by the Democratic Party to provide housing for people who did not have the means to pay for that housing. For the Democrats, it did not matter that the new borrowers could not pay; what was important was that the state provide housing for them and that it be done by re-distributing a huge portion of our gross domestic product to the Democrats.

  Contrary to what many Democrats said, this fiasco was not caused by Bush's deregulation (Bush did no such deregulation). Deregulation was merely the scapegoat. The problem that created this crisis is socialist intervention in the economy. Today, we are attempting to "fix" this problem by capitalizing worthless loans, sending good money after bad and making the good money worthless. This response to a failure of socialism will only prolong the problem.

  It is no coincidence that the original TARP bill proposed by Bush and the Democrats included a provision to provide additional funding to ACORN. ACORN was an Obama supporter and a voter fraud organization (for Obama) that “helped” the poor get loans they could not afford to pay back. ACORN was very active in "working" directly “with” banks and mortgage companies “encouraging” them to offer more loans to the poor. In other words, ACORN operatives threatened to boycott and hold public protests against banks and financial institutions unless they donated to ACORN and offered low interest loans to "poor" people.