Tag: Capitalism

Problems With Philanthrophy – Part II

guest author

Consider giving to smaller, local and goal-directed charities.

Problems With Philanthrophy – Part II

By: Mitch Levin – July 19, 2020

        This is the second of two posts by guest blogger, Mitch Levin; if you missed the first part, it is on our website: www.mllg.us.  We resume where we left off last week.

Unintended Consequences: Well-intended charities of the 1960s directly led to poor black women depending on government for income and sustenance, replacing and emasculating the men in their lives. The men sought meaning in the streets. The family unit was decimated and poverty is now enculturated in certain communities.

Adverse Outcomes: An opera company would not renegotiate artist contracts during the Great Recession for fear of tarnishing its reputation for future contracts. Despite a multimillion dollar budget and endowment, the company folded, artists were unpaid, performances cancelled, donors burned, audiences deprived and staff unemployed.

Complication and Bureaucracy: Hospitals are often very poorly run, organized and maintained. Doctors, patients and administrators all are frustrated at the same things at the same times. There is so much regulation, often competing, and so little transparency and data to identify and to measure good goals.

Executive Compensation: There is no compelling reason leaders of taxpayer supported, tax-exempt organizations should be compensated at levels commensurate with commercial enterprise sisters. Donating work is part of the donation – especially for those passionate about the charitable mission. Don’t worry you won’t be able to attract high level performers with lower compensation. Mayo Clinic and Harvard do it all the time for the privilege of wrapping their halos around you. It is a false comparison.

Diversion: You contribute to one “charity” which then contributes to a completely different type charity. Examples are a charitable hospital contributing to a performing arts building and cancer research contributing to abortion clinics.

Frustration: Performing arts giving subsidizes those who don’t, yet without your subsidy the organization may not be able to deliver the art form to the community – and we all would be so much worse off, even if you do not patronize the arts.

Perpetuation: This is especially true in the social services realm where the goals are poorly defined. Many simply continue to grow. Rockefeller and others create additional “charitable” entities (that hire their own employees and consultants). The LDS endowment exceeds $100 billion; Harvard approaches $40 billion – enough to fund every one of their 10,000 students current annual tuition of $75,000, or $750 million, less than 1.9% of the principal, every year and never run out.

Perversion: Foundations based on the premise of capitalism now contribute to opposing entities. Pew Charitable Trusts contributes to NPR and the Ford and Rockefeller Foundations to anti-capitalist, openly socialist Center for American Progress and Alliance for Green Revolution.

Proliferation: March of Dimes, polio effectively eradicated, now advocates for “the health of moms and babies” with only 1,500 employees.

Vagueness: Bezos’ new foundation states that “to address the climate crisis, we must address inequality” and Bloomberg’s spends on “sustainable cities”. In the educational and research worlds, the goals are often not measurable.

      These issues may lead to donor fatigue and be self-fulfilling, without market pressure and “governors” such as pricing and competition. What to do? How to find the right organization to give? Consider smaller and local and goal directed.

Fulfillment of Mission

         This is often counter-intuitive. For many philanthropists, the reason to donate and keep donating is to make a difference. To be certain the intended results actually happen. To that end, meaningful and measurable goals are vital.

        Dallas’ OurCalling exists to reduce homeless populations. The 1970s saw a mass elimination of mental institutionalization, without any reasonable replacement. Since 80% of homelessness is a result of substance abuse or psychiatric diseases, giving a blanket and a sandwich only temporarily and partially salves the symptom, doing little to solve the problem. OurCalling, discovering the reasons for their homelessness, delivers the emotional and material resources to live beyond their challenges and provides information resources to the beneficiaries to help themselves.

      Capitalism funds philanthropy. The more successful charities mimic capitalism, and often they “sunset” after 75 years. They help those who will help themselves. There is a substantial responsibility in charitable giving, including good stewardship. Putting itself out of business is the greatest success.

Next up on July 26th is MLLG’s inimitable take on the 2020 election.
More Liberty Less Government  –  mllg@mllg.us  –  www.mllg.us

A Chinese Thanksgiving: The Story of Xiaogang

George Noga
Plymouth and Jamestown have much in common with the village of Xiaogang.
A Chinese Thanksgiving: The Story of Xiaogang
By: George Noga – November 24, 2019

          This year marks the 70th anniversary of the People’s Republic of China; it was celebrated with great pomp throughout China. Something far more transcendent and ineffable took place on November 24, 1978 – exactly 41 years ago today – in the tiny Chinese village of Xiaogang; that story is suppressed even today by the Chicoms. Following is the amazing true story of the quiet revolution that saved China.

         After taking power in 1949, the Chinese Communist Party (Chicoms) abolished private land ownership and forced peasants into communes. The result was predictable; by 1978, 40 million had starved to death with survivors near death. In the village of Xiaogang there was no food. Farmers dug up roots, boiled leaves with salt and ground roasted tree bark into flour. Then something truly remarkable happened.

           On November 24, 1978 a farmer, Yan Hongchang, invited heads of Xiaogang’s families to attend a clandestine meeting. The farmers signed a 79-word pledge to divide the commune’s land into individual family plots; each agreed to submit his share of the decreed quota to the state but got to keep the rest for his family. What happened next was predictable – and also inspirational. The farmers produced a grain harvest of 100 metric tons – equal to 20 years of quotas. There is no official record of the village having a thanksgiving celebration following the harvest, but I’ll bet it had one.

        The Chicoms tried to suppress news of the Xiaogang miracle, but word quickly spread throughout China. Within just two years, Deng Xiaoping decided to abandon collective farming. He allowed peasants to farm their own plot of land and to sell most of the harvest in unregulated markets. The rest is history. A tiny group of farmers, who understood human nature, stood up to the immense power of the state. Today there is a small museum in Xiaogang commemorating the farmers with a copy of their pledge. There also is a banner proclaiming: “The origin of our nation’s economic rise“.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

        Events in both Jamestown and Plymouth parallel what transpired in Xiaogang. The earliest Americans starved to death en mass under socialism but prospered when given property rights. Socialism was such an affront to their humanity that they died rather than pervert their human nature. If they would have worked as hard under socialism as they later did under capitalism, they would have prospered. Yet, they chose death over socialism. Whether it is in Xiaogang, Plymouth, Jamestown, Caracas or Pyongyang socialism always ends the same way, i.e. starvation amidst plenty.

         This Thanksgiving share with your children and grandchildren the authentic story of Thanksgiving in Jamestown, Plymouth – and Xiaogang. Without private property rights there is no abundance and there is no Thanksgiving – ever. When we sever the link between work and benefit, the inevitable result is privation and misery. If you want a veritable cornucopia to share with others, only capitalism can produce it.

        Pilgrims celebrating their harvest with Native Americans is a warm, fuzzy, feel-good, multi-cultural, politically correct myth that ignores authentic, enduring lessons, i.e. socialism fails and capitalism succeeds. Americans 400 years ago understood these lessons better than progressive politicians today who advocate a return to the principles that created mass starvation in Jamestown, Plymouth and Xiaogang.

Next on December 1st – the oxymoron of government accountability.
More Liberty Less Government  –  mllg@mllg.us  –  www.mllg.us

Labor and Capital Day 2019

George Noga
Capitalism is an economic democracy in which every penny has the right to vote.
Labor and Capital Day 2019
By: George Noga – September 1, 2019

          Tomorrow, as we properly honor labor, we should equally celebrate capital, which enhances labor by making it more productive and hence more remunerative. Throughout history, mankind’s labors have resulted only in poverty for the masses. But when capital alloys with labor, it puts labor on steroids and eliminates poverty. Despite capitalism’s astounding achievements, it gets no respect from the media, the public or the academy and only derision from progressives; following are ten reasons why.

1. Capitalism is an economic system; as such, it is without equal. Most (if not all) shortcomings attributed to it by liberals are really political. The role of capitalism is to maximize the economic pie; the role of politics is to divide the pie as, and if, needed.

2. Progressives make false comparisons. They compare ideal socialism (never achieved anywhere) to capitalism as practised.  As demonstrated in our March 24, 2019 post (go to www.mllg.us), capitalism beats socialism in theory, practice and morality.

3. The media are ignorant and biased. Capitalism has stamped out poverty and vastly improved the human condition, but is widely condemned – even by the Pope. Surveys show 95% of Americans are ignorant of capitalism’s stunning accomplishments. The only plausible explanation is ignorance and bias in academia and the media.

4. Capitalism evolved organically. No intellectual wrote a capitalist manifesto. Adam Smith didn’t invent capitalism, he merely explained what occurs naturally, no eggheads required. No one controls capitalism, whereas socialism requires controllers, i.e. progressive panjandrums, who believe they know what is best for everyone.

5. Self interest (greed) is the basis of capitalism. Greed is an inseparable part of the human condition. The genius of capitalism lies in channeling greed into incentives to serve your fellow man, whereas socialism channels it toward destructive ends.

6. Consumers are sovereign. Intellectuals and progressives enjoy no special status; the common man holds all the power. Sovereign consumers’ decisions about what to buy (or not) makes suppliers rich or poor. Wealth is achieved only by serving consumers.

7. Capitalism doesn’t need intellectuals. Professors are not highly esteemed by markets to which their exalted education and lofty intentions are superfluous. Academics prefer regulation to the chaos of markets and believe their pet theories should override the free decisions of consumers – if necessary, by using the police power of the state.

8. Capitalism is egalitarian. Uneducated blokes can make fortunes by say recognizing markets for cheaper used parts and stripping equipment to harvest them. They repulse elites by both their success and the obscene manner they spend their fortunes. They got rich because they took risks and provided services consumers valued. Meanwhile, poor overeducated pointy-headed progressives go unrewarded and unrecognized.

9. Capitalism brooks no excuses for failure. Success is based solely on one’s ability to provide value to his fellow man. Capitalism is an economic democracy in which every penny confers the right to vote. Its credo is: to each according to his accomplishments, not to his ideas or intentions. Those who fail are found wanting by their fellow man.

10. Progressives covet control over others. They don’t grasp why the poor, unwashed, ignorant rubes in flyover land believe they know what’s best for them. Progressives fancy themselves as heroic emancipators, crushing greedy capitalists, saving helpless victims and then rollicking in the just approbation and adulation of all mankind.

          Capitalism has created a cornucopia of wealth unprecedented in human history, virtually eliminating extreme poverty. Nearly every metric of human well-being is the best ever and continues to improve. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are now affordable at Walmart and Costco. These miracles were created not by, but in spite of, government and progressivism.

         Let’s continue to honor labor on the first Monday in September. As the world’s greatest capitalist nation, let’s also celebrate capitalism and the capitalists who had an impossible dream, took great risks and had the determination to see it through.

Next on September 8th is MLLG’s back-to-school special about teacher pay.
More Liberty Less Government  –  mllg@mllg.us  –  www.mllg.us

Socialism vs. Capitalism: Results – Theory – Morality

George Noga
“Tyranny is the political corollary of socialism, as representative government is the political  corollary of a market economy. To suggest otherwise ignores history.”  (Ludwig von Mises)
Socialism vs. Capitalism: Results – Theory – Morality
By: George Noga – March 24, 2019

        Apologists for socialism disingenuously compare ideal socialism to the actual practice of capitalism. What if we compared ideal capitalism to real-world socialism? In this post, we compare results to results, theory to theory and morality to morality.

The Results of Socialism Compared to the Results of Capitalism

       No serious economist argues socialism produces better results than capitalism. Socialism never has created sustained prosperity. It can only achieve a brief illusion of prosperity by plundering a nation’s wealth, confiscating assets, inflating, borrowing, nationalizing, and printing worthless currency. But it always ends the same way, i.e. starvation amidst plenty. Socialism’s failures are legion: the USSR, Venezuela, Cuba, North Korea and the Chicoms. It never has worked for more than 25-50 people, such as a family, clan or tribe, where familial bonds supercede economic considerations.

In just the past 25 years (per the World Bank) capitalism has cut extreme poverty by 75% – equal to 1.2 billion human beings, with an additional 50 million being lifted out of poverty each year. Every day, another 135,000 people escape poverty. Today less than 10% of the world’s population live in extreme poverty and it could end within our lifetime. This is by far the greatest economic accomplishment of all time, thanks to capitalism. Capitalism’s successes also are legion: the USA, Western Europe, Japan, the Nordics, Singapore, Canada, Australia, Botswana, New Zealand and South Korea.

The Theory of Socialism Compared to the Theory of Capitalism

        Under ideal socialism, the governing values of the citizens are community and equality; they view their economic well being as a common enterprise. They share the work according to their abilities and no one demands extra benefits due to greater talent or work effort. All inequalities due to undeserved advantages or disadvantages are eliminated. In this socialist utopia, all the people are economically equal.

        Ideal capitalism means self interest and markets. Some citizens are more talented,  exert more effort or take greater risks; hence, some are wealthier than others. But this arouses no envy because all the citizens are unselfish. When someone is in need, neighbors help. Just as in the socialist utopia, the citizens care about each other and value community. All of the good aspects of the socialist utopia are present but so are additional benefits such as innovation and the production of more and better goods.

          If one assumes people under ideal socialism are entirely altruistic, then it is only fair to make the same assumption under ideal capitalism. Moreover, the free market isn’t dependent on altruism and it functions even when comity is in short supply. Socialism always fails, in theory and practice, because it is fundamentally opposed to human nature; people are hard wired to respond to self interest and to incentives.

The Morality of Socialism Compared to the Morality of Capitalism

        Comparing results to results is no contest; capitalism wins hands down. But when comparing ideal to ideal, capitalism also wins because, if people act altruistically, the incentives of capitalism produce greater prosperity. Socialists distort by comparing an idealized version of socialism to non-idealized capitalism and by assuming people act selflessly under socialism but selfishly under capitalism. What if we compared ideal capitalism to socialism as actually practiced – with its mass murders, brutal dictators, starvation, grinding poverty and human desperation as in say, Venezuela?

        Capitalism, non-coercive cooperation in markets, is also superior morally. People succeed only by providing goods valued by their fellow man. The most potent force on earth is a consumer armed with a free choice; even a large corporation can’t force anyone to buy its products. The political corollary of socialism is tyranny and it inevitably results in starvation amidst plenty; there is nothing moral about that.

Next: Hotel Europe – you can check out any time, but you can never leave.

Capitalism and Pope Francis

George Noga
Capitalism is not moral because it works; it works because it is moral.
Capitalism and Pope Francis
By: George Noga – September 9, 2018

       As someone born Catholic, who attended parochial school and was observant much of his life, I take no pleasure in this posting. But Pope Francis is astoundingly callow and ignorant of even elementary economic concepts. Because 1.25 billion Roman Catholics (1 of every 6 souls on the planet) look to the Pope for enlightenment, it is important to set the record straight. Go to our website www.mllg.us to see our related March 13, 2016 posting entitled “Pope Francis Enters the Twilight Zone”.

      Recently, the Pope (directly and via Vatican pronouncements) has criticized capitalism for, inter alia, consumerism, fossil fuels, environmental harm, materialism, lack of charity, speculation, seeking profit, promoting individualism, harming the poor, credit rationing, injustice, legal tax avoidance and credit default swaps. He advocates more government intervention, regulation, politics, taxes and central planning.

        If you missed it, read the September 2nd post on our website. It reports capitalism cutting extreme poverty in the world by 75% and lifting 1.2 billion humans out of the grip of poverty in the past 25 years. Every day, capitalism raises 135,000 more living, breathing people out of extreme poverty. Again thanks to capitalism, every metric of human well being is improving. Capitalism has produced a cornucopia of wealth and is the greatest human success story of all time for the common man. Yet strangely, there is never any mention of this economic miracle by Pope Francis – only vitriol.

         Capitalism is effective and also moral. A market economy is based on voluntary transactions in which both parties benefit; that’s why, upon concluding a transaction, both buyer and seller say “thank you”. Capitalism is peaceful and non-coercive; it channels human nature and self interest toward the common good. Capitalism is a positive sum game since both parties win in all transactions; there are no losers. The most powerful force on earth is a consumer armed with a free choice and even the biggest and most powerful corporation cannot make someone buy its product.

         There is space to address only a few of the Pope’s naif criticisms. Nations must be wealthy (capitalist) to be good environmental stewards; the worst degradations of all time took place under the commies and now are  being cleaned up by capitalists. The Vatican labels credit default swaps “economic cannibalism that profits from the misfortune of others“. Such swaps are merely insurance against defaults and make it easier for poor countries to borrow. The Pope condemned derivatives and speculation, both of which make markets more orderly and especially help third world agriculture.

          Pope Francis doesn’t grasp that squandering trillions for uncertain, infinitesimal climate benefits means the money cannot be spent now to alleviate suffering from unsafe water, malnutrition and lack of electricity and medicine. The last thing a poor child in an African slum needs is a solar panel. The Pope has called money “the dung of the devil” – no riposte needed. Capitalism doesn’t cause consumerism; it responds to it. If consumers demanded more bibles, the market would instantly supply them.

        The Pope is concerned for the poor but attacks the greatest anti-poverty engine in human history. Poor countries suffer due to insufficient capital; wealth must be created before it can be shared and private charity is much more effective than government redistribution. Pope Francis said building a wall is “unchristian”. Is the US unchristian for creating great wealth amidst liberty and becoming a magnet for emigrants?  Or, are socialist nations unchristian for creating great poverty, stifling liberty, fomenting civil unrest and making life so miserable that their people desperately flee their homes?

        Capitalism is not moral because it works; it works because it is moral. Capitalism has achieved, and continues to achieve, miracles that in earlier ages could only have been ascribed to the gods. However well-meaning Pope Francis may be, he fails to understand the morality of free markets and the immorality of statism and collectivism.

Our next post on September 16th addresses reality and denial in America.

Celebrate Capital Day 2018

George Noga
“The achievement of capitalism is not to provide more silk stockings for princesses but to bring them within reach of the shop girl.” (Schumpeter)
Celebrate Capital Day 2018
By: George Noga – September 2, 2018

       This Monday, let’s celebrate capital along with labor. Labor is a noble activity but capital puts labor on steroids by making it more productive. The natural condition of mankind is, and always has been, poverty. Therefore, we should not be asking what causes poverty, but what causes wealth. The answer to that question is capitalism.

       Paleolithic fishermen worked incessantly spearing enough fish to survive until one nascent capitalist thought of a net. Since he had no capital, he worked longer hours for months to accumulate enough extra fish (his capital) to give him time to construct a net. He then generated a surplus of fish to trade for other goods. His capital investment made him wealthier than others but it also made everyone else better off. The same is true of the capitalists who founded Wal-Mart, Amazon, Apple and Microsoft.

        Per the World Bank, capitalism has cut extreme poverty by 75% in just the past 25 years, equal to 1.2 billion human beings with an additional 50 million being lifted out of poverty each year. Each day there are 135,000 fewer people in poverty. Today less than 10% of the world’s population lives in extreme poverty and it could end within our lifetime. This is by far the greatest economic success story of all time. For the average human being, the world has never been a better place – thanks to capitalism.

        Americans are ignorant of the dramatic progress against extreme poverty. Surveys have asked if, over the last two decades, extreme poverty has doubled, remained the same or halved (the correct answer). A staggering nineteen out of twenty (95%) Americans get it wrong. The only plausible explanation is media ignorance and bias. Despite capitalism stamping out poverty and vastly improving the human condition, it is widely condemned – even by the Pope. Why all the criticism?

  •      Capitalism is perceived as flawed because it hasn’t solved every human problem. In fact, capitalism is purely an economic system and most of the things for which it is criticized (wealth distribution) are political rather than economic issues.

 

  •       An ubiquitous critique is that capitalism is based on self interest or greed, if you insist. Like it or not, greed is an inseparable part of the human condition. The genius of capitalism is that it channels greed into incentives to serve your fellow man. Greed is just as endemic under socialism but it is channeled toward destructive ends.

 

  •       The practice of capitalism always is compared to the theory of socialism; this is a wholly dishonest comparison. If actual results of both systems are compared, capitalism triumphs handily. If the theories of both systems are compared, capitalism again wins because socialism is contrary to human nature and it never can succeed.

 

  •       Leftists, academia and the media are infatuated with socialism even though in 10,000 years socialism (and its cousins) never has succeeded in any group bigger than a family, clan or tribe (about 25 people) in which familial bonds supersede economic interests. How many more Venezuelas must there be before they learn?

      Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty is being eliminated; every metric of human well being is improving. Even inequality is shrinking as the poor are getting richer at a much faster pace than the affluent. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Wal-Mart and Costco.

        Not one of these miracles was created by government or socialism. Who has done more to benefit the common man – Henry Ford, Steve Jobs, Sam Walton or any king, president or commissar? America is the bastion of capitalism; tomorrow, let’s celebrate capitalism and the capitalists who had a dream and the will to accomplish it!

September 9th we blog (reluctantly) about capitalism and Pope Francis.

Collection of Micro and Ultra-Short Posts

George Noga
Government could pay every SunRail passenger $30 to take Uber and that would cost less than the subsidy for operating SunRail!
Collection of Micro and Ultra-Short Posts
By: George Noga – July 8, 2018

Micro Posts: Look upon the Obama presidency as a vaccination that inoculated the body politic with a low dose of socialism which may protect us from later contracting a more virulent form of the disease; don’t snicker; it worked in 2016. . . . . . . Kim Jong Il  reportedly shot 38 under par, including 11 holes-in-one, the first (and only) time he played golf; this is all you need to know about the NoKos. . . . . . . Nuclearization of Iran and North Korea, once considered by all as unacceptable, became irreversible under Obama/Clinton/Kerry – then along came Jones – err, Trump. . . . . To justify his belief in climate change, Obama said carbon dioxide emissions exacerbated his daughter Malia’s asthma; oops, it’s sulfur dioxide (not CO2) that is linked to asthma.

From the WWII Caen Memorial: “Instead of peace, the end of the war saw the creation of two competing economic systems. One was the United States which adopted a messianic form of capitalism emphasizing consumption above equality resulting in an intensely materialistic society. The greater wealth created by its acquisitive capitalistic system was devoted to support a hedonistic life style. The other system, championed by the USSR, was based on common ownership of resources. Although this system proved less efficient, it led toward a much more equal distribution of the wealth in its society.” 

 

Americans buried at nearby Normandy did not fight for messianic capitalism; but the Caen Memorial is right in one way: communism more equally distributed its poverty. And all those people fleeing communism probably could have used a little hedonism.

Climate Claptrap: A recent US government scientific report is hokum. It reports sea levels increasing at a higher rate while failing to note this has occurred often in the past 100 years. It reports heat waves are more common but doesn’t acknowledge the peak was during the 1930s dust bowl years and they are no more common now than 120 years ago. It claims hurricanes have increased in power, ignoring a NOAA finding of no detectable human impact on hurricanes. Remind me; who are the science deniers?

Capitalism and government: If your kids love government and hate capitalism, this may cure them. Capitalism brings us: Uber, Waze, Venmo, Google, Spotify, Kindle, iPhones, Netflix, Amazon, Facebook, YouTube, Instagram, Snapchat, Android, Apple, Disney, FedEx, UPS, Airbnb, internet, Lyft, laptops, notebooks, tablets, 4K-HDTV, Nintendo, iMac, Roku, Amazon Echo, Xbox, and Google assistant. Government brings us: IRS, USPS, DMV, airport security, public schools, Medicaid, taxis, $700 toilet seats, waste, fraud, abuse, Amtrak, student debt and (horrors) SunRail (see below).

All Aboard: SunRail is the second biggest con job in Florida history after the lottery. Every scient person (except teachers, who fell en masse for the lottery) knew exactly what would happen. Ridership is 30% below its worst case estimate and is decreasing! SunRail costs $35 million to operate and fares bring in only $1.9 million. Government could pay every SunRail passenger $30 to take Uber and it would save money. And Uber picks you up and drops you off 24/7 anywhere, any time  – without timetables.

Despite abject failure, SunRail is adding 17 miles and plans more extensions. SunRail makes even Amtrak, which charges $9.50 for an inedible hamburger that costs $16 to make, look good. Amtrak loses $1 billion/year on food for which it has a monopoly.

Trains are deeply embedded in progressive DNA. When liberals hear the word train, they become catatonic and involuntarily begin to chant their mantra: “all aboard – all aboard – all aboard“. This is in part due to their aversion to cars and fossil fuels but trains have a more primal attraction for progressives, i.e. their desire for collectivism and disdain for individualism. Cars freely go whenever and wherever, making the driver the master of his fate. Trains go on a timetable devised by government experts, who know better than individuals what choices are best for them. All aboard!

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More Montana Moments is next as we explore Montana’s Canadian Connection

Destroying the Link between Capitalism and Wealth

George Noga
If  capitalism and liberty lose the culture war, it will be because Americans have lost the link that brought us our unprecedented cornucopia of  wealth.
Destroying the Link between Capitalism and Wealth
By: George Noga – March 11, 2018

      This is the second and final post seeking to answer the question: Does capitalism sow the seeds of its own destruction? The first part is on our website: www.mllg.us. This question first was posed 100 years ago by economist Joseph Schumpeter. We will conclude by comparing Schumpeter’s predictions with where America stands today.

       We are engaged in a great culture war for the preservation of capitalism along with wealth and liberty, which are symbiotically linked to capitalism. If we have capitalism, we ipso facto have liberty and wealth. Without capitalism we become poorer and less free, while under socialism we are impoverished and tyrannized; think Venezuela.

     How bad is the anti-capitalist mentality? One poll showed 4 out of 10 US adults preferred socialism to capitalism. A YouGov poll asked if respondents had a favorable view of capitalism or socialism. With Democrats, it was tied at 42%; millennials chose socialism 43% to 32%. In a Gallup poll, 47% of respondents reported they would vote for a qualified socialist for president; 69% of those ages 18-29 said they would. Of  millennials, 58% would rather live under socialism than capitalism. In a Politico poll, Democrat voters in every age group, gender and race said they liked socialism.

     Unsurprisingly, few people, especially millennials, understand what capitalism, socialism or communism really is. Large majorities conflate European social welfare states with socialism. They particularly believe Sweden is the model of a successful socialist country. Read our October 15, 2017 post “Socialism and Sweden” on our website; it shows Sweden as a free-market capitalist country. Liberals and millennials it seems are not only brainwashed but ignorant. Perhaps they can spend their next vacation in Venezuela, Cuba or North Korea to see real socialism at work.

Let’s revisit Schumpeter’s prediction, which contained five sequential points.

  1.  Capitalism will create great wealth. This has come true to an extent few dreamed.
  2.  More people will be educated. Again true, in America education is universal.
  3.  Professors and teachers will promote anti-capitalist ideas. BINGO!
  4.  People will vote for social welfare states. Already true  as shown by polling.
  5.  Capitalism’s success brings about its own destruction. This hangs in the balance.
     Schumpeter feared the demise of capitalism, along with wealth and liberty, would usher in a new dark age and we may have to wait centuries for the reemergence of capitalism and liberty. If Schumpeter’s final prediction comes true, we will drag the entire planet into a lengthy and unspeakable Orwellian torpor where men lead lives of quiet desperation, where war is peace, bad is good, immoral is moral and big brother always is watching. Nowhere is it written that liberty will survive.
My March 18th post is mega special; hint: it is my 75th birthday!

Why Intellectuals Hate Capitalism

George Noga
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.

“Capitalism is: To each according to his accomplishments.” 

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.

Red October – The God That Failed

George Noga
Communism fails because it is opposed to and irreconcilable with human nature.
Red October – The God That Failed
By: George Noga – October 29, 2017
       Humans have sought to create temporal paradises since the Garden of Eden. In literature, dreams of heaven on earth date to Homer’s Odyssey (Elysium) in the 12th century, BC. There have been numerous attempts to create Utopias, including colonists in Jamestown, Pilgrims in Plymouth and the 1789 French Revolution. Communism’s turn came 100 years ago this month when they took over the government of Russia.
      In all human history, attempts to create Utopia have led only to death, destruction and misery; the communists alone killed over 100 million. Never has any communist, socialist or collectivist scheme worked for any group larger than a family, clan or tribe. Despite this grisly record, many – ever in search of  Zion – continue to believe. What can possibly explain the beliefs of such people – including those who feel the Bern?
      Their belief is not based on evidence but on a longing for a moral basis in their lives. They are in search of a religion – but one without God. Politics is their new faith but they are anti-democratic because they already have all the answers. They long for equality but the equality that leads to conformity and despotism. They compare the ideal of communism with the practice of capitalism but never the results of each. They want to be judged by their intentions, never by their actions. They embrace platitudes from cans. They are oblivious to history and believe they will get it right next time.
    Capitalism stands in sharp contrast to communism. Just since 1970, worldwide poverty has fallen 80%. In arguably the greatest achievement in human history, billions of people have escaped poverty. Was this miracle due to the UN, World Bank, IMF, NGOs, government or socialism? No; it was due entirely to capitalism. Yet 70% of people surveyed believe hunger and poverty have gotten worse and only 40% of young Americans have a favorable view of capitalism. Socialism impoverishes people (Venezuela) while capitalism makes them wealthy; yet, people cling to illusions.
       Communism, socialism and collectivism are lies. They promise Xanadu,Valhalla and Elysium; they give you North Korea, the USSR, and Cambodia. They promise comradeship; they give you totalitarianism. They promise progress; they give you stagnation. They promise hope; they give you lives of quiet desperation. They promise Sweden; they give you Venezuela. They promise a new social order; they give you a smorgasbord of social pathologies. They promise truth; they give you Pravda.
     They promise liberty; they give you walls with razor wire and minefields. They promise equality; they give you equal poverty. They promise a clean environment; they give you a toxic wasteland. They promise technology; they give you Chernobyl. They promise a classless society; they give you political elites living in decadent luxury. They promise freedom and justice; they give you Gulags and the Stasi.
       They promise peace; they give you war. They promise Apple, Google and Disney; they give you lines, shortages and shoddy goods. They promise hope; they give you nihilism. They promise Mercedes; they give you Trabant. They promise Eden; they give you hell on earth. They promise Singapore; they give you Cuba. They promise abundance; they give you rationing. They promise Utopia; they give you dystopia.
       The enduring lesson of communism is that it never has worked and never can work because it is opposed to and irreconcilable with human nature. It always fails, not because it is implemented poorly but, because it is done faithfully. Although socialism, progressivism and liberalism may be less virulent forms of communism, the end result always is the same – economic stagnation, human misery and loss of liberty.
     Communism (and all other collectivist schemes) always makes high-minded and exalted promises but delivers nothing but a phantasmagoria of terror, slaughter and poverty. In the end, it is nothing but lies. It is the God that failed!
This concludes our Red October series; our next post is November 5th.