CCCToad on 24/8/2009 at 02:22

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Its not a simple answer.

While capitalism has the potential for greatest freedom, this only occurs when capitalism is restricted. Unrestricted, it tends to give birth to conglomerates, monopolies, and cartels who use their financial wealth in ways to discourage freedom. Anyone even vaguely familiar with the happenings of Chicago about the turn of the century has an idea of the kind of stuff I'm talking about: assasinations of union leaders, "blacklisting" of those who speak out against the employer's practices, and throwing around money in order to control the political apparatus. This process is also exacerbated by the banking industry, which only leads to a centralization of power: those who have money out are beholden to those who have enough money to lend out money, and owe interest. This leads to a "rich get richer" effect which increases exponentially as the "top 1%" gets richer.

In order for capitalism to be a truly free system, it needs to have protections against the corrupting influences caused by large accumulations of wealth in one pair of hands. Personally, I would also disallow interest-based lending, as it tends to have a powerful corrupting influence (Full argument is made by Hilaire Belloc, can't remember the whole logical train, but see above paragraph). For example, the first US national bank funded the British in the war 1812, as described in the book "the coming battle((http://www.amazon.com/Coming-Battle-Complete-History-National/dp/0965636909). Ignore the commentators, the actual book doesn't attempt to an organized conspiracy, only that the large banks have undermined the US government). Note that the book was written at the turn of the century, and still describes behavior not unlike the scandals surrounding the bailout.


So in summary, pure capitalism will not result in freedom(economic or otherwise). It only results in the emergency of an 'elite' class which uses its money to crush any competition.
edit: found a full text link: (http://www.apfn.org/apfn/comingbattle.htm)

Thief13x on 24/8/2009 at 04:12

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As a "give me liberty or give me death" nutter myself, I will admit that I hate when professors teach controversial shit that they admittedly feel strongly about one way or the other and allow it to influence curriculum. Granted, it's usually the die hard liberal atheist forcing me to act out a play with a bunch of kickasses to get the grade that typically gets me riled up, but it quite frankly sounds like this guy should not be teaching that class (along with about 95% of existing humanities professors).

/endrant

Rogue Keeper on 24/8/2009 at 09:25

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This is of course a complex topic, I'd just like to react to this:

"there is no political freedom without economic freedom"

This is classical liberal economic theory, which sometimes from late 18th through first half of 19th century could have had it's heavy weight against protectionist and dying Mercantilist policies. However a lot of things have developed since then and the relationships between the state and private industry and between governments and private bodies themselves became increasingly complex. I'm afraid in the course of the rest of 19th century and in the 20th century, the governments in capitalist countries became so vulnerable by (and keen to) corruption of the private industry, that we can no longer talk about real general political freedom, influence and opportunities for every citizen.

Maybe classical liberals like Bastiat and so forth meant their theories honestly at their time and adressed important issues, but not only in my opinion, the current neoclassical liberals, who take classical liberal thinkers as their paragons, support economical and social injustice by being too fundamentalist about their early 19th century views.

The economic globalization, at least in last 60 years or so, managed to generate kind of capitalism which generates bigger wealth by equally growing economic inequality. The neoliberals are obsessed with growth of wealth, but sharing this wealth is of course bad. By extension, inequality of the world regions and even classes in certain country grows bigger. Do the succesful industries from developed countries need the third world countries to develop themselves into potential competition? Of course not. They are useful for resources and cheap labor force, which can be bought first before it's too late - by corruption of the governments, if necessary. Also the generation of "wealth" on unrestricted financial market, not backed up by physical values, commodities, is a total madness. Any economically healthy country can not rely on incomes from casino-like financial speculations and services, while outsourcing physical production to the third world. This is of course problem of entire society, because the citizens of wealthy countries grew too comfortable with the idea of being paid for provision of services, instead of exhausting physical labor for equal or lesser wages.

Freedom of movement of capital among the countries isn't equated by freedom of movement of people and expansion of social and civic rights. One can always blame governmential policies for this, but in fact the governmential polices are shaped according to interests of private bodies. You can hear many enterpreneurs saying "I believe in free market!" But in practice, the business is always easier with the help or protection of the government. The government can guarantee you better expansion and serious advantage against the competition. What succesful enterprise doesn't desire to have monopoly? I'm fully convinced that the private industry doesn't like the idea of a REAL free market, making most of the free market theoreticians redundant cuckoos who really don't represent interests of the private sector.

What the public activists should focus onto now is, how to separate the public interests from interests of the private industries in the governing bodies, process of creation of legal prescriptions, etc. Or better put, how to protect the government from being corrupted by private capital and interests. Conservatives and laissez faire liberals say there is no conflict between public and private interest or that there is no public interest at all. I believe it is and in reality there are numerous examples of conflicts between these two. While the private interest has intentions of profit, the public interest has non-profitable interest of common welfare. Hayek teaches that too big governmential projects will always have undesired consequences. I want to know what kind of logic dictates that unrestricted business interests of private bodies can not have undesired consequences, harmful to other group of people with non-profitable interests, general society or the environment.

"Equal people are not free" is stupid. If people are inequal, then there is always relationship of domination and submission and subordinate people are not free. Liberalism of the age of Enlightenment was well aware of this basic social equation. Now the leftists must carry this tradition, because apparently the neoclassical liberals, conservatives and even right wing libertarians reject the basic egalitarian principle of general freedom for the sake of unlimited accumulation of private wealth.

jay pettitt on 24/8/2009 at 13:02

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Free is such a nice sounding word. How could you possibly say no?

SD on 24/8/2009 at 14:02

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I broadly agree with the central premise that there cannot be political freedom without a good dose of economic freedom. Basic democratic theory holds that centres of power and wealth should be controlled by people other than those running the apparatus of the state.

This does not mean that economic freedom automatically goes hand in hand with political freedom; some nations (notably China and Singapore) have freeish markets without especially free citizens. That said, what you will find in those countries is that the free market brings about the emergence of a middle-class who tend to like other kinds of freedom too. These wealthy, well-educated folk can be the catalyst for social and political advances, and I would not be at all surprised to be sitting here in 50 years with a democratic China.

I think market fundamentalists such as your professor tend to mistake a lack of market restriction for liberty. A totally free, laissez-faire market might sound good on paper, but in practice it doesn't give the best results. Government regulation is required to curb the worst excesses of capitalism and to deliver the maximal amount of freedom to the citizenry. With the current financial plight, I don't think I really need to explain why market regulation is a good thing.

Also, while a market might allocate resources efficiently a lot of the time, some things should just not be abandoned to market forces. Healthcare is an example, largely due to issues with information asymmetry (and also because pooled risk is useful as illness is generally not something you choose, but something you are passively afflicted by).

Where I would find common voice with free market fundies is in their condemnation of tariffs on foreign goods and subsidies to domestic producers and manufacturers. Protectionism is generally a bad thing where the consumer gets stiffed big time. If a guy in Suriname can supply me with potatoes at 50 cents a kilo, then it would be plain wrong for my government to levy a 300% tax on his produce merely to induce me to pay $1.25 a kilo for potatoes from a domestic farmer.


PS I am not an economist, so I apologise in advance if any of the above is unclear or too generalised