Posted on 11/18/2012 5:36:57 AM PST by 1rudeboy
Last week [Nov. 2004], there were several comments in Carnival of the Capitalists that people would like to see more articles highlighting the benefits of capitalism. This got me thinking about a conversation I had years ago at the beach:
Hanging out at the beach one day with a distant family member, we got into a discussion about capitalism and socialism. In particular, we were arguing about whether brute labor, as socialism teaches, is the source of all wealth (which, socialism further argues, is in turn stolen by the capitalist masters). The young woman, as were most people her age, was taught mainly by the socialists who dominate college academia nowadays. I was trying to find a way to connect with her, to get her to question her assumptions, but was struggling because she really had not been taught many of the fundamental building blocks of either philosophy or economics, but rather a mish-mash of politically correct points of view that seem to substitute nowadays for both.
One of the reasons I took up writing a blog is that I have never been as snappy or witty in real-time discussions as I would like to be, and I generally think of the perfect comeback or argument minutes or hours too late. I have always done better with writing, where I have time to think. However, on this day, I had inspiration from a half-remembered story I had heard before. I am sure I stole the following argument from someone, but to this day I still can't remember from whom.
I picked up a handful of sand, and said "this is almost pure silicon, virtually identical to what powers a computer. Take as much labor as you want, and build me a computer with it -- the only limitation is you can only have true manual laborers - no engineers or managers or other capitalist lackeys".
Yeah, I know what you're thinking - beach sand is not pure silicon - it is actually silicon dioxide, SiO2, but if she didn't take any economics she certainly didn't take any chemistry or geology.
She replied that my request was BS, that it took a lot of money to build an electronics plant, and her group of laborers didn't have any and bankers would never lend them any.
All too many defenders of capitalism would have stopped here, and said aha! So you admit you need more than labor - you need capital too. But Marx would not have disagreed - he would have said it was the separation of labor and capital that was bad - only when laborers owned the capital, rather than being slaves to the ruling class that now controls the capital, would the world reach nirvana. So I offered her just that:
I told her - assume for our discussion that I have tons of money, and I will give you and your laborers as much as you need. The only restriction I put on it is that you may only buy raw materials - steel, land, silicon - in their crudest forms. It is up to you to assemble these raw materials, with your laborers, to build the factory and make me my computer.
She thought for a few seconds, and responded "but I can't - I don't know how. I need someone to tell me how to do it"
And that is the heart of socialism's failure. For the true source of wealth is not brute labor, or even what you might call brute capital, but the mind. The mind creates new technologies, new products, new business models, new productivity enhancements, in short, everything that creates wealth. Labor or capital without a mind behind it is useless.
From the year 1000 to the year 1700, the world's wealth, measured as GDP per capita, was virtually unchanged [link is now dead]. Since 1700, the GDP per capita in places like the US has risen, in real terms, over 40 fold. This is a real increase in total wealth - it is not money stolen or looted or exploited. Wealthy nations like the US didn't "take" the wealth from somewhere else - it never even existed before. It was created by the minds of human beings.
How? What changed? Historians who really study this stuff would probably point to a jillion things, but in my mind two are important:
So today's wealth, and everything that goes with it (from shorter work hours to longer life spans) is the result of more people using their minds more freely.
Look around the world - for any country, ask yourself if the average person in that country has the open intellectual climate that encourages people to think for themselves, and the open political and economic climate that allows people to act on the insights their minds provide and to keep the fruits of their effort. Where you can answer yes to both, you will find wealth and growth. Where you answer no to both, you will find poverty and misery.
Atlas Shrugged is an excellent fictional homage the the "Men of the Mind."
Excellent!
Nice article.
In my experience talking with Marxists I have found that they think (wrongly) wealth is like energy, it cannot be created or destroyed, only transferred. (They would never say it this way, having taken no science.)
In this world view, if someone has wealth, they must have gotten it from others. Those others are the workers.
They tend to argue that they should be able to hire the “thinkers” at a “fair” wage to design the computer and the plant. That fair wage may even be slightly higher than the workers wage, but not appreciably higher, and that the thinkers would just happily fill their role in society. Voila - Utopia!
They totally drop the concept of risk, reward, incentive and human nature. In fact they want to change human nature to achieve their socialist goal. They will go so far as to kill you if you don’t want to play in their happy little utopia.
Did Marx not recognize the value of intellectual labor?
Yes, Lefties all seem to assume the world is a zero sum game. It’s really a pathetically stupid worldview since it cannot account for why we live better than cavemen.
I don't remember whether he thought it was intellectual capital that led to property-ownership, or if he separated the two.
Bump for ponderance after church.
Excellent post, well worth the read. Bumping back to the top.
One day a group of scientists got together and decided that man had come a long way and no longer needed God. So they picked one scientist to go and tell Him that they were done with Him.
The scientist walked up to God and said, “God, we’ve decided that we no longer need you. We’re to the point that we can clone people and do many miraculous things, so why don’t you just go on and get lost.”
God listened very patiently and kindly to the man and after the scientist was done talking, God said, “Very well, how about this, let’s say we have a man making contest.” To which the scientist replied, “OK, great!”
But God added, “Now, we’re going to do this just like I did back in the old days with Adam.”
The scientist said, “Sure, no problem” and bent down and grabbed himself a handful of dirt.
God just looked at him and said, “No, no, no. You go get your own dirt!”
Both pure socialism and capitalism are unpleasant extremes and has never existed. A well balanced system is between it, but it has to be much closer to capitalism. Think of 1950s America as close to ideal.
They downplay the role of thinking, while telling us their “brilliant” thoughts. If thinking is so trivial, one wonders why we should even listen to, much less accept their theories. Such people should be shushed as soon as they say, “I think....”.
Maybe they only say this stuff and hope to make workers believe it. It is their only path, with their mediocre minds, to rule over those who have been given superior intellect.Look to where they want complete fairness, you see where they feel inferior.
The true source of wealth is the unfettered human mind. When this is joined to a political system that encourages new ideas you get an economy that is capable of extensive and prolonged growth.
Why is this so strongly discouraged by multiple political forms? IMHO, no established politician in any political form likes instability. It scares them beyond belief. A read of history since the American Revolution shows an unending list of boggy men that are violent threats to the established order. I don't think that I have to enumerate the worse examples of the 20th Century.
“If you ask me to name the proudest distinction of Americans, I would choose- because it contains all the others—the fact that they were the people who created the phrase ‘to make money.’ No other language or nation had ever used these words before; men had always thought of wealth as a static quantity- to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.” ~ Francisco’s “Money Speech” from Atlas Shrugged by Ayn Rand
Christianity was not a “trap”. In fact it freed many people. Anytime someone talks about “dark ages” I refer them to what the whole of Europe was like BEFORE Christianity took over. THOSE are the dark ages. Savages in huts without any real accomplishment. Rome was the only base of learning but no savages really changed until Rome fell and Christianity had taken hold.
*****The mind was trapped in an Aristotelian/Christian trap*****
Jesus’ words prove that you are dead wrong.
Matthew 25:14-30
King James Version (KJV)
14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods.
15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey.
16 Then he that had received the five talents went and traded with the same, and made them other five talents.
17 And likewise he that had received two, he also gained other two.
18 But he that had received one went and digged in the earth, and hid his lord’s money.
19 After a long time the lord of those servants cometh, and reckoneth with them.
20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more.
21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them.
23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.
24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed:
25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine.
26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed:
27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury.
28 Take therefore the talent from him, and give it unto him which hath ten talents.
29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath.
30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.
Liberals also view almost all commercial transactions as coerced. That the seller is in some way cheating the buyer. What they don’t understand is that there is a differential in how buyers & sellers value a product, and that when trade occurs, both sides benefit and overall wealth increases.
I don’t understand this mentality. It’s exactly like saying both being cancer free and having cancer are unpleasant extremes so what is better is a mix of some healthy tissue and some cancer.
Socialism is evil and it is demonstrably so. It violates man’s rights. It is metaphysically wrong. It is wrong in its view of reality and man’s nature. There is no such thing as a proper mixture of good and evil.
The world has never seen a system of Laissez faire capitalism put into practice. The closest anyone has ever come was America at its founding and we see the results in the wealth created. But even from the first it was a mixed system and included glaring contradictions such as slavery. Yet despite the flaws it produced undreamed of wealth.
The World has never seen a system of pure Socialism either. The closest anyone has come is probably in North Korea and we see the results. Still it is a mixture of capitalism and socialism as the secret police can’t catch every illegal trade of goods that goes on since people’s will to live is so strong that they will risk death in an internment camp to raise an illegal head of cabbage and trade it with their fellows.
America had a brilliant start and could have moved more and more towards a system of laissez faire or towards Socialism. For a brief shining time we did after the Civil War but then In the late nineteenth century we took a turn. The cancer of Socialism is well advanced now and we see the results.
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