|Does capitalism really sow the seeds of its own destruction?|
Why Intellectuals Hate Capitalism
By: George Noga – March 4, 2018
This is the first of two posts seeking to answer the above question about capitalism and self destruction. This question has a nexus to our three February posts (available at www.mllg.us) about the debt crisis. Both stem from the consequences of the stunning success of capitalism in creating enormous wealth for all. This first post explains why intellectuals and progressives loathe capitalism and love socialism.
A century ago economist Joseph Schumpeter wrote that capitalism would self destruct: “I do not think capitalism can survive. Its demise will not be due to economic failure; instead, its very success undermines the institutions which protect it and creates conditions in which it can’t survive.” He theorized: (1) capitalism would enable more people to become educated; (2) they would be taught anti-capitalist dogma by professors now free to promote their ideas rather than to work; (3) people thusly (mis)educated would vote for liberal welfare states leading to the end of capitalism.
Vituperation from socialist professors has infected college students and wafted into the general population. There are six main reasons liberals hate capitalism.
1. Capitalism evolved organically. No intellectual wrote a capitalist manifesto; Adam Smith merely explained what happened naturally. Capitalism just happens; it doesn’t require professors to theorize. No one is capable of controlling capitalism, whereas socialism requires controllers, i.e. intellectuals who know what is best for everyone.
2. Capitalism is egalitarian. An uneducated, uncouth bloke can make a fortune by say recognizing the market for used auto parts and buying and stripping junk cars. He gets rich because he provided a valuable service to consumers. In contrast, the intellectual is unrecognized and unrewarded. Successful capitalists repulse elites.
3. Professors are rewarded by bureaucrats, not markets. They succeed by pleasing their statist employers, not by pleasing students (customers) or by attracting new students. Capitalism does not reward them based on their exalted education and good intentions. They prefer regulation to the chaos of the marketplace. They believe their pet theories should override the free decisions of individuals, if necessary by using the police power of the state. Their peers all are anti-market and they must go along to succeed.
4. Consumers are sovereign; intellectuals have no special status. The common man holds all the power; his decisions to buy (or not to buy) determine what is produced and makes suppliers rich (or poor). Wealth is achieved only by serving consumers.
5. Capitalism brooks no excuses for shortcomings. Capitalist success is based strictly on one’s ability to provide value to his fellow man. Capitalism is to each according to his accomplishments; those who fail are found wanting by their fellow men.
6. Intellectuals desire control over others. They fail to understand why the unwashed, poor ignorant rubes in flyover land believe they know what is best for them and for their families. Intellectuals see themselves as heroic emancipators, crushing greedy capitalists, saving helpless victims and reaping the just approbation of all mankind.
America’s immense, broadly shared wealth comes with pernicious consequences. Any society rich enough to have millions of pet insurance policies with acupuncture, chiropractic and mental health benefits is a society that arguably has lost its critical connection between wealth and capitalism. More on this next week along with our conclusion about Schumpeter’s prediction of capitalism’s self destruction.
Our March 11th post is the second and final part dealing with Schumpeter.