One wonders whether our central planners are simply obtuse or really bad people. Charlie Rose interviewed United States Treasury Secretary Timothy Geithner recently. In that interview, Mr. Geither declared that capitalism as we have known it will "be different." As an initial matter, one could credibly argue that during the last century of the central-bank dominated, income-tax supported Progressive Era, we have not really "known" capitalism, but that topic is beyond the scope of this brief essay. More importantly, Mr. Geithner’s statement betrays his positivistic belief that he and his co-conspirators have the power to "change," as opposed to further pervert or corrupt, a fundamental relationship between human beings. Mr. Geithner’s statement has the hubristic air of someone who truly believes that his worldly power enables him to fundamentally alter the human condition everywhere and forever.
From nearly the beginning of time, holders of "capital" have employed their capital in the service of the market by producing goods and services that the market demands. These prudent capitalists are always seeking to maximize profit and therefore always look to maximize revenue and decrease expense. Historically, smart capitalists have recognized that government is the most dangerous threat to capital and capitalism. Free-market merchants and capitalists fled the German Nazi regime in the 1930’s because they correctly recognized that the militaristic regime was about to prey upon them. The most talented artists, athletes and free-market businesspeople fled or attempted to flee Communism in large part because it was not fairly compensating them for their services. After six months of historic crony bailouts and nationalizations that have silently taxed everyone holding dollars, when Mr. Geithner says that he now intends to change capitalism and complains of lax regulation the message therefore couldn’t be clearer — he is trying to further pervert, or perhaps kill, what is left of capitalism in the United States. He of course will not be able to do this, but if he is even partially successful the attempt will have the predictable effect of forcing more capital to flee for safer environs — namely, Asia. It does not matter how many Ivy League central planners gather at how many economic summits, Mr. Geithner and his friends cannot change this fundamental principle. When they attempt to pervert or change what is a fundamental relationship between human beings by punishing, seizing or reducing the purchasing power of capital, the only certain result is that their actions will force capital away and create opportunities for more hospitable countries.
