Friday, April 23, 2010

Stossel’s Myths

Nathan Goodman called my attention to this recent piece by John Stossel: “Myths about Capitalism: Confronting the Biggest Lies about American Business.” I can’t resist commenting.

1. Capitalism is mostly cruel and unfair

Notice that the subtitle of Stossel’s article suggests that “capitalism” is synonymous with “American business.” Genuinely freed markets are not mostly cruel and unfair. But I think it’s a stretch to assume that the same is true of big businesses that operate with all sorts of privileges from the state and that benefit from a long history of injustice and dispossession. Big business in America does not enjoy its power and privilege in virtue of a freed market, and there is no reason to think business leaders desire a freed market. The cruelty and unfairness of big business—at home and abroad—may have little to do with free(d) markets, but they’re systemic features of “capitalism”—if by that term is meant “rule by capitalists” or “the economic system we have now.”

2. When the rich get richer, the poor get poorer.

In a genuinely freed market, no. A truly freed market would tend to eat the rich, as Jeremy Weiland has suggested. But in a market distorted by privilege, in which people get rich not exclusively or primarily because they provide goods and services people want, in which increased wealth is not necessarily a reflection of genuine wealth creation, I suspect it’s much more likely that some people are despoiled to the advantage of others.

3. Government is more fair and reliable than business.

This is clearly a myth. But that’s hardly reason to take a trusting attitude toward big business, which happily utilizes state-secured privilege to the detriment of consumers and workers. And I suspect that Stossel may be rather too fond of the related myth that government and big business are adversaries rather than, as seems more likely, competitive and sometimes hostile allies.

4. The current downturn means the death of capitalism.

Nope, it doesn’t. Stossel’s right. But not for the reasons he thinks. He’s right, in fact, because capitalism is marked by privilege and cronyism, which lay behind the current crisis and which have featured rather too prominently in efforts purportedly intended to address it. In any case, the partnership between the business elite and the political elite will doubtless continue as long as there’s anything like the current economic and political order. The occasional crisis won’t be enough to end that order, I fear.

It’s hard not to see Stossel and Michael Medved, his conversation partner in the segment he discusses in the article, as exhibiting just the uncritical equation of the contemporary economic order with a genuinely freed market that Kevin Carson rightly lampoons as “vulgar libertarianism.”

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