Aug 202014
 

Today, capitalism is blamed for our current disastrous economic and financial situation and a history of incessant booms and busts. Support for capitalism is eroding worldwide. In a recent global poll, 25 percent (up 2 percent from 2009) of respondents viewed free enterprise as “fatally flawed and needs to be replaced.” The number of Spaniards who hold this view increased from 29 percent in 2009 to 42 percent, the highest amongst those polled. In Indonesia, the percentage went from 17 percent to 32 percent.

Most, if not all, booms and busts originate with excess credit creation from the financial sector. These respondents, incorrectly, assume that this financial system structured on fractural reserve banking is an integral part of capitalism. It isn’t. It is fraud and a violation of property rights, and should be treated as such.

In the past, we had deposit banks and loan banks. If you put your money in a deposit bank, the money was there to pay your rent and food expenses. It was safe. Loan banking was risky. You provided money to a loan bank knowing funds would be tied up for a period of time and that you were taking a risk of never seeing this money again. For this, you received interest to compensate for the risk taken and the value of time preference. Back then, bankers who took a deposit and turned it into a loan took the risk of shortly hanging from the town’s large oak tree.

Continue reading »

Share Button
Aug 182014
 

Most longtime readers know that I have often warned that our government has evolved into benevolent totalitarianism.

This is a gentle term for fascism. No, we don’t have the jack boots and the swastika. Our system is far advanced from that. Our fascism today is so advanced over Nazi Germany and fascist Italy of World War II that our system actually appears benevolent.

How could this happen? The answer is: reverse semantics. Every writer and every talking head in America refer to the U.S. as a democracy of free market capitalism and individual privacy and property rights. This is a big laugh to any sober, thinking person.

Well, the system and its paid politicians still repeat those high-sounding terms. They use the terms like “privacy” and “free market” as sedatives to the crowd. The terms “private” and “freedom” no longer mean what they once did. They are cruel deceptions that fool the mind yearning for human freedom.

Continue reading »

Share Button
Jul 232014
 

In the minds of many people around the world, including in the United States, the term “capitalism” carries the idea of unfairness, exploitation, undeserved privilege and power, and immoral profit making. What is often difficult to get people to understand is that this misplaced conception of “capitalism” has nothing to do with real free markets and economic liberty, and laissez-faire capitalism, rightly understood.

During the dark days of Nazi collectivism in Europe, the German economist, Wilhelm Röpke(1899-1966), used the haven of neutral Switzerland to write and lecture on the moral and economic principles of the free society.

“Collectivism,” he warned, “was the fundamental and moral danger of the West.” The triumph of collectivism meant, “nothing less than political and economic tyranny, regimentation, centralization of every department of life, the destruction of personality, totalitarianism and the rigid mechanization of human society.”

If the Western world were to be saved, Röpke said, it would require a “renaissance of [classical] liberalism” springing “from an elementary longing for freedom and for the resuscitation of human individuality.”

Continue reading »

Share Button
Jun 232014
 

#6 – Capitalism Fosters Greed and Government Policy Must Temper It

On April 19, 2014, the Colonial Bread store in my town of Newnan, Georgia, closed its doors after a decade in business. The parent company explained, “In order to focus more sharply on our core competencies, the decision was made to close some of our retail stores.” A longtime patron responded in the local newspaper this way: “It’s just sad. It’s simply greed and we’re on the receiving end. It’s frustrating to know there isn’t anything you can do about it either.”

Now there’s a rather expansive view of “greed” if there ever was one! Trying to make more efficient the business in which you’ve invested your time and money is somehow a greedy thing to do? And what is it that the disgruntled patron wishes should be done about it? Perhaps pass a law to effectively enslave the business owner and compel him to keep the store open? Who is really the greedy one here?

Continue reading »

Share Button
Apr 232014
 

American exceptionalism, the country’s qualitatively demonstrable advantage over other nations, used to be characterized by individualism.

Not to mention egalitarianism, republicanism, and populism.

All of this was supported by the government’s laissez-faire approach to America’s capitalist economic system.

That’s all changed. And not for the better.

Now, top-down technocratic government manipulation of civil liberties, and the American economy, is pushing the nation towards the pernicious charms of socialism.

And America, investors and non-investors alike, will suffer from its impact…

Continue reading »

Share Button
Mar 242014
 

Part 4 – The Mythical Banking Crisis and the Failure of the New Deal

The Great Depression thus did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression—absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions. Instead, the Great Depression was a unique historical occurrence—the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking.

But ironically, the “failure of capitalism” explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens—-Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier—-that is, the old-time religion of balanced budgets— that had kept America a relatively peaceful Republic until 1914.

Continue reading »

Share Button
Jan 082014
 

In a recent Vancouver Province column “Capitalism has a role in fighting poverty,” Mark Milke takes Pope Francis to task, rightfully, for attacking capitalism while at the same time calling for eradication of poverty. Milke is correct in recognizing the role capitalism plays in eradicating poverty. However, capitalism not only “has a role” in fighting poverty: it is the only way to eradicate poverty. Government efforts at directing economies and “redistributing” income from those who produce to those who don’t (or to those who produce less) have never been successful at eliminating poverty. Witness the failed experiments at central planning in the former Soviet Union and China (and the famines that ensued), or the more recent long-term, failed redistribution schemes in bankrupt Greece and elsewhere in Southern Europe. Then consider relative free eras and regions of the world, such as the 19th century America and Hong Kong even today, for a contrast.

Continue reading »

Share Button
Dec 162013
 

Uh-oh!

The new pope, Francis from the Pampas, has just warned us to beware the “tyranny” of capitalism.

Each man worships his own gods. Some worship at the altar of Jesus of Nazareth. Some at the altar of the Almighty Dollar. The capitalists don’t bad-mouth Francis’ god. You’d think he would cut them the same slack.

Bad-mouthing Catholicism will win you few fans. Those outside the Roman faith won’t care. And papists will be your enemies for life.

Continue reading »

Share Button
Dec 132013
 

There have been many alarmist predictions recently. Some of those I have paid close attention to are by Scott Brown, Leap/Europe 2020 and John Hussman. These articles suggest that the U.S. and the World in general may be heading for really hard times.

Follow up:

The Raymond James piece by Scott Brown is pretty much the standard fare that the economy has not been performing very well and we may have become increasingly dependent on bubbles for what growth we have been achieving. This is pretty much a call for a War on Bubbles.

Continue reading »

Share Button
Oct 022013
 

Those of us who favor the free market must confront a problem. The virtues of the market, and the vices of socialism and interventionism, have been made incontestably clear by Mises, Rothbard, Hazlitt and others. The case for the free market, as these great figures explain it, can readily be grasped and demands no esoteric knowledge. Yet many academics reject the market. They condemn capitalism for leaving many in poverty and for glaring inequalities. How can so many academics fail to grasp what seem to us obvious truths?

In Crony Capitalism, a vital book, Hunter Lewis solves our problem. Those who condemn the free market do so by considering bad features of the present economy, both in the United States and elsewhere in the world. In judging the free market in this way, they rely on an unexamined assumption. They take for granted that the present order of things is the free market in action.

Continue reading »

Share Button