A Failure of Capitalism?

...federal spending went from a drag on the economy to a true albatross by the 1970s. After former Fed Chairman Paul Volcker and Ronald Reagan courageously bought our currency a new lease on life, Alan Greenspan was given the helm at the central bank. Colluding with Presidents Clinton and Bush II to simulate economic growth for political gain, Greenspan, and his chosen successor Ben Bernanke, unleashed a torrent of new dollars into the banking system, where they were leveraged to finance the largest asset boom in history.

We are now in the process of deleveraging from this boom. It is painful, but it represents an opportunity. A government genuinely interested in economic restructuring could be focusing on cutting spending, lowering taxes, and reducing corruption, instead of playing 'pin the blame on the capitalists.'

Today, we are likely heading into the second wave of massive recession. There is a concerted effort by the government to blame the fallout from their schemes on the free market. You, the educated observer, should recall that the most rabid capitalists - Peter Schiff, Doug Casey, Jim Rogers, Lew Rockwell, Ron Paul - were the only opponents of the bubble economy while it was occurring. Meanwhile, those that seek to pass judgment on capitalism - Bernanke, Greenspan, Tim Geithner, Jim Cramer - celebrated the artificial boom and were shocked at the resulting bust. Why does anyone even listen to these fellows anymore?

No, this crisis is not a failure of capitalism, but the result of a sustained attack upon our capitalist system. If we allow it to be used as a pretext for more government control, we will endure a 'lost decade' like the 1990s in Japan

If the citizenry is awakened to the kinds of facts discusssed in this piece, and if they will go back and review the philosophy of the Framers of the U. S. Constitution, they may perhaps begin to understand how America became the symbol of liberty, opportunity and prosperity for millions throughout the world. It is not capitalism that has failed. It is the failure of those elected to protect the U. S. Constitution who have failed to protect its principles. The following essay, is reprinted with permission from "Our Ageless Constitution." See

If you have read the following on a thread recently, just skip it, but it's message is important, in light of what this writer has stated.

Freedom Of Individual Enterprise

The Economic Dimension Of Liberty Protected By The Constitution

"Agriculture, manufactures, commerce, and navigation, the four pillars of our prosperity, are the most thriving when left most free to individual enterprise." - Thomas Jefferson

"The enviable condition of the people of the United States is often too much ascribed to the physical advantages of their soil & climate .... But a just estimate of the happiness of our country will never overlook what belongs to the fertile activity of a free people and the benign influence of a responsible government." - James Madison

America's Constitution did not mention freedom of enterprise per se, but it did set up a system of laws to secure individual liberty and freedom of choice in keeping with Creator-endowed natural rights. Out of these, free enterprise flourished naturally. Even though the words "free enterprise' are not in the Constitution, the concept was uppermost in the minds of the Founders, typified by the remarks of Jefferson and Madison as quoted above. Already, in 1787, Americans were enjoying the rewards of individual enterprise and free markets. Their dedication was to securing that freedom for posterity.

The learned men drafting America's Constitution understood history - mankind's struggle against poverty and government oppression. And they had studied the ideas of the great thinkers and philosophers. They were familiar with the near starvation of the early Jamestown settlers under a communal production and distribution system and Governor Bradford's diary account of how all benefited after agreement that each family could do as it wished with the fruits of its own labors. Later, in 1776, Adam Smith's INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS and Say's POLITICAL ECONOMY had come at just the right time and were perfectly compatible with the Founders' own passion for individual liberty. Jefferson said these were the best books to be had for forming governments based on principles of freedom. They saw a free market economy as the natural result of their ideal of liberty. They feared concentrations of power and the coercion that planners can use in planning other peoples lives; and they valued freedom of choice and acceptance of responsibility of the consequences of such choice as being the very essence of liberty. They envisioned a large and prosperous republic of free people, unhampered by government interference.

The Founders believed the American people, possessors of deeply rooted character and values, could prosper if left free to:

acquire and own property
have access to free markets
produce what they wanted

work for whom and at what they wanted
travel and live where they would choose
acquire goods and services which they desired

Such a free market economy was, to them, the natural result of liberty, carried out in the economic dimension of life. Their philosophy tended to enlarge individual freedom - not to restrict or diminish the individual's right to make choices and to succeed or fail based on those choices. The economic role of their Constitutional government was simply to secure rights and encourage commerce. Through the Constitution, they granted their government some very limited powers to:

assure that the ground rules were fair (a fixed standard of weights and measures)
encourage initiative and inventiveness (copyright and patent protection laws)
provide a system of sound currency with an established value (gold and silver coin)
enforce free trade (free from interfering special interests)
protect individuals from the harmful acts of others

Adam Smith called it "the system of natural liberty." James Madison referred to it as "the benign influence of a responsible government." Others have called it the free enterprise system. By whatever name it is called, the economic system envisioned by the Founders and encouraged by the Constitution allowed individual enterprise to flourish and triggered the greatest explosion of economic progress in all of history. Americans became the first people truly to realize the economic dimension of liberty.

Footnote: Our Ageless Constitution, W. David Stedman & La Vaughn G. Lewis, Editors (Asheboro, NC, W. David Stedman Associates, 1987) Part III: ISBN 0-937047-01-5

If capitalism has any "failure", it's the failure to keep government out of the mix. Government is the main cause of failure - if that is the right word - of capitalism.

It is government who regulates, taxes, and hinders the growth of capitalism. You can't levy exhorbitant taxes, ridiculous environmental regulations, and government bureacracy without scaring companies to foreign soil where don't can make their product, ship it back here, and still make more profit than dealing with our own government.

I'm not an isolationist, but pushing our manufacturing base to other countries is like one company giving it's most profitable product to the competition.

After pushing away one manufacturere after another, the people left unemployed then turn to the very government that caused them to be in that position for support. Karl Marx himself could not have thought of a more inviting scenario for the growth of communism.

Back when America was based on families, community pride, and local jobs, were were strong and secure. We didn't have to commute 60 miles per day to go to work, and a visit to the local doctor was 25-dollars (30 if you got a shot).

There is nothing wrong with capitalism, so long as you keep the government out of it as much as possible. Let the buyer beware.

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