Brainwash Us,' and Other Anti-Capitalist Complaints
by Thomas E. Woods, Jr.
by Thomas E. Woods, Jr.: My
Anti-Capitalist Twitter Critic
to some arguments against capitalism leveled at
me by a persistent Twitter
critic. I was just getting started. Here are some juicier ones.
Another of her tweets read, "Our main enemies: Corporatocracy,
of the free market agree with her here, so I do not understand
what she could be thinking. Meanwhile, her Twitter avatar includes
the logo for Obama 2012. This is cognitive dissonance of an unfortunately
very common kind. She believes herself to be an opponent of "corporatocracy"
and the "American Empire," while lending support to
a candidate and a political party that have done as much as anyone
else in this country to bring those very things about.
Gregory noted in a recent
essay (one of the best I have read in a long time, I might
money toward corporate America, banks and car manufacturers. He
championed the bailouts of the same Wall Street firms his very
partisans blamed for the financial collapse. He picked the CEO
of General Electric to oversee the unemployment problem. He appointed
corporate state regulars for every major role in financial central
planning. After guaranteeing a new era of transparency, he conducted
all his regulatory business behind a shroud of unprecedented secrecy.
He planned his health care scheme, the crown jewel of his domestic
agenda, in league with the pharmaceutical and insurance industries.
As for foreign
policy, my critic evidently thinks the American empire, which is
the product of a thoroughly bipartisan foreign policy extending
over sixty years, is the exclusive creation of wicked Republicans.
To the contrary, as Andrew Bacevich shows in his new book Washington
Rules, the foreign-policy differences between people like
Hillary Clinton and John McCain are essentially trivial. Hillary
was a major supporter of the Iraq war, as were the New York Times,
the Washington Post, and pretty much all the major U.S. newspapers.
My critic's own heroes are just as responsible for the morally and
economically disastrous American empire project as anyone else.
continued the war in Iraq, even extending Bush’s schedule with
a goal of staying longer than the last administration planned.
He tripled the U.S. presence in Afghanistan then took over two
years to announce the eventual drawdown to bring it back to
only double the Bush presence. He widened the war in Pakistan,
launching drone attacks at a dizzying pace. He started a war
on false pretenses with Libya, shifting the goal posts and doing
it all without Congressional approval. He bombed Yemen and lied
signed on to warrantless wiretapping, renditioning, the Patriot
Act, prison abuse, detention without trial, violations of habeas
corpus, and disgustingly invasive airport security measures.
He deported immigrants more than Bush did. He increased funding
for the drug war in Mexico. He invoked the Espionage Act more
than all previous presidents combined, tortured a whistleblower,
and claimed the right to unilaterally kill any U.S. citizen
on Earth without even a nod from Congress or a shrug from the
Obama instead of taking a principled stand against the system,
my critic lends aid and comfort to the very "corporatocracy"
and "American empire" she claims to oppose.
"Another problem with the idea of the free market is that humans
make decisions based upon the short term rather than the long term."
this dubious psychological generalization to be true, why would
it not apply equally well to the political class itself? Why would
it not apply equally to the voters who will elect the political
class? No one ever answers this question.
the unfunded liabilities of the major transfer programs are greater
than twice the GDP of the entire world, I think my suspicions
criticism of the market misses the idea of capital value. Does
she go 80,000 miles between oil changes? I’ll assume not. But
if it is some kind of psychological law that "humans make
decisions based upon the short term rather than the long run,"
then why doesn’t she? She can save money today, in the
short term, by neglecting the maintenance of her car and
therefore its performance in the long run. Who cares about the
car’s condition two years from now? That’s the long term! Human
beings, she says, don’t care about that.
own a car, you own the rights to the flow of services it can render
over the course of its useful life. That alone gives you ample
incentive to think about the long term. The longer a durable good’s
useful life is, the more services it can render its owner. Therefore,
property owners have an interest in taking actions that will increase
the lifespan of the good in question.
operate under such incentives? Of course not. As Hans-Hermann
Hoppe has frequently pointed out, the caretakers who operate the
machinery of state in a democratic system do not own the resources
they employ. Unlike private owners, they have no economic incentive
to preserve the capital value of the country. It does not matter
to them how long its capital stock lasts, how much debt it accumulates,
or how many of its citizens it conscripts and leads to slaughter.
These are all long-term questions. Their effects will be felt
long after the politicians in question are retired.
"This [alleged psychological law according to which people
act only with very short time horizons] enables shrewd individuals
or groups to manipulate markets and exploit individuals for their
own gain. The invisible hand Smith described is either too slow
or becomes too entangled to effectively make corrections to the
market in sufficient time to prevent real, long term, harm for occurring.
Consequently free-market corrections can produce enormous misery
for the many while they take their sweet time to correct the market."
I do not
understand this passage. Evidently individuals or groups "manipulate
markets" and "exploit individuals," though no examples
or definitions of these terms are provided. This anti-social behavior
apparently causes the entire market economy to suffer, such that
a wrenching recovery process is necessary. These recoveries take
too long, and cause further suffering.
for the sake of argument that these market manipulations, which
are never defined or illustrated, really are the cause of recessions
– and with the relevant terms not defined and a causal mechanism
not even hinted at, I think I am ascribing more dignity to this
position than it deserves – we are left to wonder why the economy
is not in a state of permanent recession. Aren’t greedy manipulators
everywhere? If so, why does greed manifest itself only in cyclical
patterns, rather than constantly?
my critic’s brief is the Federal Reserve System even mentioned.
(That is revealing but unfortunately rather typical: an alleged
opponent of "corporatocracy" cannot bring herself to
mention the institution that backstops some of the fattest of
American cats.) She is not even curious enough to wonder what
supporters of the free market – whom she imagines as little men
with white mustaches, running about with sacks of money with dollar
signs on them – might think causes economic downturns.
actually involves a full-fledged theory, not merely a vague pointing
of fingers at economic malefactors. In our theory, the central bank
– the very institution our critic neglects as if it had absolutely
nothing to do with the condition of the economy – interferes with
credit markets to push interest rates to below-market levels, thereby
setting the stage for a series of consequences that produces first
an artificial boom and then an inevitable bust. I explain it in
greater detail in my 2009 book (and New York Times bestseller)
cycle, according to the Austrian School of economics, is caused
not by the market economy per se but by this intervention into
the market. The bust, in turn, is brief or prolonged depending
on the response by government. The first time government responded
to a depression with a ceaseless program of intervention, namely
the Great Depression, was also the first one to last so long.
the situation were reversed. Suppose the depression of 1920-21,
in which the federal government and the Federal Reserve did next
to nothing, had persisted for a decade, but the Great Depression
had lasted only a year or two after the New Deal programs were
instituted. We would never hear the end of it: why, this proves
the stupid free market can’t correct itself! We need our wise
the truth of the matter is exactly the opposite, we hear only
"FREE MARKET ENCOURAGES the elimination of the weak."
Then why have
population figures and life expectancy exploded under capitalism?
Why do the poorest enjoy the greatest material advantages in those
countries where the free market is least hampered by violent intervention?
"It quickly became apparent that humans could be sold products
with lower or even negative utility by appealing to the consumer
on a deeper emotional level…. This discovery along with mass advertising
enabled by mass communication effectively destroyed the free market
observed by Adam Smith."
This is a
bastardized version of John Kenneth Galbraith’s critique of the
market. According to this argument, the market isn’t really free
because advertising brainwashes consumers into buying whatever
product a clever firm offers them. But as Murray Rothbard noted
long ago, if this critique were correct we would have a hard time
accounting for how much money firms devote to marketing research
to try to ascertain whether consumer demand exists for the product
they seek to develop. Why bother spending so much time and
money figuring out what consumers want if a clever advertisement
is enough to snooker them into buying almost anything?
All the advertising
in the world couldn’t save New Coke or the Edsel, and once people
can download music in mp3 format or watch streaming movies, no
amount of celebrity endorsements is going to prop up Sam Goody’s
To be continued…
E. Woods, Jr. [send him
his website], a senior fellow of the Ludwig von Mises
Institute, is the author of eleven books, most recently Rollback:
Repealing Big Government Before the Coming Fiscal Collapse and
How to Resist Federal Tyranny in the 21st Century, as well
as the New York Times bestsellers Meltdown:
A Free-Market Look at Why the Stock Market Collapsed, the Economy
Tanked, and Government Bailouts Will Make Things Worse and
Politically Incorrect Guide to American History. He is
also the editor of five other books, including the just-released
on the Road to Serfdom.
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