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An Open Letter to Libertarians and Free-marketarians

Discussion in 'Business & Economics' started by charleslb, Jun 7, 2011.

  1. charleslb

    charleslb Active Member

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    Dear libertarians and free-marketarians,

    It seems, I'm truly sorry to say, that the philosophical undercurrent of your thinking gravitates toward, or emanates from a fearful skepticism about the state’s lack of potential for benevolence, and its oft demonstrated high potential for transgressing against its citizens’ liberties and interests. I don't wish to be polemic here, but it would appear, I’m afraid, that your darksome conception of the societal agenda of leftists, and of the futuristic, socially-engineered state they supposedly have in store for us is somewhat B-movieishly Orwellian. Indeed, you seem to take it quite for granted that some kind of dystopian nightmare is the only and the inexorable outcome of what you consider to be the left’s progressive pipedream of social justice for all.

    Well, I for one beg to disagree that an anti-libertarian statist system is the catastrophic anticlimax that all socialist thinking unavoidably leads to. This last sentence may very well already have your minds forming erroneous preconceptions about yours truly, so let me crucially clarify something up front, I am not at all some sort of statist socialist, in actuality I’m more of an anarcho-communist. As you’ll shortly become aware, I’m admittedly quite anti-capitalist and make no bourgeois bones about the fact that I do advocate socialist remedies for our society’s socioeconomic ills. However, the ultimate form of social organization that I would like to see human society aspire toward is decidedly not an overly bureaucratized, Big Brotherly socialist system, but one in which all property and power are communalized, in which the whole public sphere of life, i.e. both the political and economic spheres are thoroughly controlled by the people themselves through the application of authentically participatory, direct democracy (you know, democracy uncompromised by the ole business-political complex).

    Such a society ideally would be divided into small social units, locally manageable by their members, and linked with other units into an interdependent and cooperative league of communities. One that recognizes the fundamental and liberating life-truth, that no living organism is an island unto itself, that everyone and thing exists and operates within a mutually dependent and creative matrix, and that individuals must go along with the ontologically deep mutuality of this matrix to get along.

    Which is all to say that in my view the best form and arrangement of society would be one that reflects the creative cosmic modus operandi of life’s inherent fruitfulness, bounty, and splendorous potential coming into actualization through the unified diversity of all things. That is, we need to embrace e pluribus unum as more than a mere motto, we need to structure its sublime spirit into the politico-economic morphology and status quo of our nation and world.

    Alas though, the excessive economic individualism of capitalism, it’s advocacy of self-interest as the chief guiding principle of economics and life, grievously errs on the side of an unbalanced emphasis on the diversity-individuality part of the equation. The cruel consequences of this out-of-balance, out-of-whack emphasis are all around us today. Ours is a society full of atomized individuals wrapped up in the privatistic pursuit of profit, possessions, and pleasure – many of any of whom come to disappointingly find that such a selfishly-lived, materialistically-driven existence is less than fulfilling at a deep level. Such egoistic individualists then turn to various unhealthy form of escapism and faux fulfillment to self-medicate the gnawing ache of their “inner void”. You can read about the sociological ill-effects of this in the morning newspaper of any big city (and many small towns), you know, rampant drug addiction and the criminality it fuels. The spiritual vapidity of the lives of the solipsistically self-interested citizens of capitalist societies is the true, underlying cause of a host of their troubles.

    Of course not only is the existential lot of modern man under capitalism less than spiritually satisfying, it’s also painfully less than materially comfortable and secure. For in a system of individual competition, for whatever reasons, not every individual is going to fare well, this is another fact of life that capitalism unwisely and callously does not take account of and compassionately adjust for. That is, in a system based on the principle of “Every man for himself, and the devil take the hindmost”, there are just way too many folks who are going to be found in the hindmost socioeconomic demographics of society. Too many folks who don’t have enough to live in a fashion consistent with the intrinsic sacredness of life and the inalienable right to dignity of human beings. Too many folks who are subjected to gross miscarriages of social justice and the criminal greed of those at the top of the societal food chain. Too many socially damned members of the human family.

    Moreover, the self-aggrandizing and ruthless individualism promoted by the narcissistic ethos of capitalism primes it to be a system that allows alpha individuals to rise to economic preeminence and dominance. A dominance which they then use to utterly subvert and do away with any fairness and meritocracy that’s theoretically supposed to inhere in the capitalist order of things; and to systematically exploit, victimize, and pauperize working-class men and women whose labor produces the wealth they voraciously expropriate.

    And the closer a society approaches the free-marketeer’s theoretical beau ideal of private enterprise and ownership, the more of an exploitive and greed-ruled system capitalism devolves into. The more of a baronial system you end up with! Say what?! What do I mean by baronial? Well, think of the way the laissez-faire and unregulated individualism of the wild, wild West permitted not a meritocracy of small homesteaders but rather the rise to dominance of land barons and alpha ranchers who came to monopolize vast tracts of acreage. And who commonly employed heavy-handed and deadly methods to attain and maintain their wealth, such as hiring gunmen to enforce their will and rule, as well as co-opting town sheriffs and political officials.

    Then, of course, in industrial sectors of the less governmentally-fettered economy of the 1800s you had the so-called robber barons (Cornelius Vanderbilt, Leland Stanford, John D. Rockefeller, that whole rogues gallery), whose unabashed avarice took them to the pinnacle of capitalist success, where they used their money-power to rig the game for themselves, to the disadvantage of capitalism’s smaller players and proletarian pawns.

    I won’t even go off on a digression about the virtual gangsterism practiced by the heroes of American economic history in the more ruggedly individualistic 19th century; about the way the greater liberty that men of big business were at to have discontent workers and union activists literally beaten down, sometimes at the hands of police acting as their private thugs, made a malicious mockery of Adam Smith’s “invisible hand” and vaunted “free market forces”. In short, a system, such as “free-market” capitalism, that proposes to give permissive, licentious freedom to the unenlightened individualism and will-to-dominance that lurks in the reptilian recesses of our triune brains is a profoundly corruptible system indeed, one that will invariably be corrupted into precisely what we have today, a predatory and plutocratic power structure that leaves billions, with a B, at home and in the Third World, cold and hungry and powerless.

    To recap, this is what we get when we opt, as a civilization, for an economic system predicated upon excessive, morally and spiritually shallow, selfish individualism. The sort of libertarian socialism that I advocate as an alternative is not at all a chilling philosophy of soulless statists and social engineers who wish to craft a technocratic tyranny in which everyone’s path in life is prefabricated from the cradle to the grave, with not a moment of free choice in between. I don’t fancy living in such a society any more than you-all do, but neither do I fancy living under the ferally dog-eat-dog system that is free-market capitalism, nor under the tyranny of the tycoons and titans of the corporatocracy that will inexorably take form. The preferable third way is a system of equally shared resources, equally shared ownership of the means of productions, and equally shared power, all through the direct-democratic public administration of each of us.

    To intentionally oversimplify it, “free market” capitalism would inevitable equal the rule of capitalist fat cats, and libertarian socialism equals the rule of all the people, hopefully with wisdom and liberty and justice for all. Of course this won’t always be the case with flawed human beings, but we’ll enjoy more liberty and justice under our own rule than we will if we choose a system that allows successful capitalists, with all their dangerous character flaws, to unilaterally run the show for us.

    :)
     
  2. Dr.Who

    Dr.Who Well-Known Member

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    Lots of big words. And long.
    Sorry I did not read it all.

    Yes I do believe that statism will and already has lead to bad outcomes.

    No I do not think that collectivism will provide a workable answer.

    Regarding capitalism: it is the worst of all systems except for all the others.
     
  3. Gipper

    Gipper Well-Known Member

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    I can agree with most of that Doc, except the last part.

    Capitalism has given us all so much. It is an exceptional system.

    Is it without fault? No.

    However without capitalism we would never know the numerous wonderful inventions and products we all enjoy today. It has made life so much easier and enjoyable.

    I do not intend to denigrate a system that has given me so much. I wish others would recognize this.

    The p-schools churn out millions of little fools that have been brainwashed into thinking this great system is destructive, while believing socialism is great. F that!
     
  4. clarkatticus

    clarkatticus Well-Known Member

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    I agree 100% with the Dr. Capitalism is better than socialism, communism is a silly premis. But true capitalsim relies on free trade which I believe impossible. Like all ideologies it assumes it's policies are self correcting (the market eliminates it's errors by providing competition to police itself) Communism assumes that it's perfect society retains it's structure because of universal "truths" and the altrusim of the everyday worker. Both deny the effect of individual malfeasance and human nature (being feckless as it is). Communism has been totally scrapped and capitalism is regulated, not enough in my opinion. I also think it is arrogant to believe capitalism is or has been the only road to invention and foreward thinking. NASA was hardly a capitalistic system although it used the private sector predominately. Other nations that were hardly capitalistic have made many inventions, Nazi Germany for one, Russia also. Most of the lower public schools I know of are non political. If you are worried about public colleges I would submit that higher education tends to attract higher intellect, hence the left leaning teaching. (trolling a bit there). I believe some issues rightly call for socialist ideas, health, education, and certain entitlements, not because they are socialist, but because they are more cost effective.
     
  5. Dr.Who

    Dr.Who Well-Known Member

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    I agree that innovations do not occur only in capitalism. I think they occur at a faster rate and with more individual freedom within capitalistic systems.

    Pure capitalism would rely on free trade. It is possible but corrections for the foibles of human nature would be slow. Capitalism does not ignore malfeasance and I think it is the system that corrects it best. In fact it is the only system in which the malfeasance itself works toward correcting the malfeasance. A certain amount of regulation and limited to certain situations exist as defined in our constitution to speed up the process. There are huge trade offs and problems with those regulations.

    In the U.S. we have a mixed economy, based on free trade but with a government that as a defined role to play. If gov sticks to that role the trade offs and loss of freedoms are acceptable.

    if someone thinks we would be better off with more regulation and they are willing to live with less freedoms, by all means they can advocate for amendments to the constitution.
     
  6. clarkatticus

    clarkatticus Well-Known Member

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    Alan Greenspan an Larry Sommers got the head of the Commodities Regulation agency to quit in 1998 convincing Congress she was completely wrong in her quest to regulate derivatives. On oct 23, 2008 in his reply to Congress he admitted he was wrong and did not see the enormity of situation even after being warned. I cannot agree with you Dr., free trade means no regulation, no regulation is what got us in this mess to begin with. Even if the market adjusts and the economy rebounds eventually with out regulation, the suffering and misery that would occur on a regular basis would not be worth the price, in my opinion we came within days of the end of capitalism, not a event I would like to repeat.
     
  7. GenSeneca

    GenSeneca Well-Known Member

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    That is incorrect. A market with no regulation is a Black Market, a Free Market limits regulations to those that guard market participants against force and fraud.

    Also incorrect. The US operates on a Mixed Market Economy, so there is no lack of regulation. The regulators assigned to oversee industries that contributed to the housing bubble rang the alarm bells for years.

    "Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong." - Rep. Artur Davis (D)
    Since you said there was "no regulation", just that one single example is enough to prove your statement is incorrect.
     
  8. Hobo1

    Hobo1 Well-Known Member

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    Lot of words for a little sarcasm.
     
  9. clarkatticus

    clarkatticus Well-Known Member

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    I agree we are living under a mini-Black Market right now, the final blow being the repeal of Glass-Steagall in 1999. I doubt even Clinton understood the ramifications as Greenspan was balls out anti-regulation and Sommers was his point man in Wall street. We are supposed to be a mixed market economy but the free traders see it differently and no regulation is their mantra (see libertarian). You can deny this, but then you don't listen to what the right is saying. What was it that Reagan said? Government IS the problem, and the idiots took it to heart.
     
  10. nobull

    nobull Well-Known Member

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    “the banks that succumbed to financial problems — Wachovia, Washington Mutual and IndyMac, among others — got into trouble by investing in bad mortgages or mortgage-backed securities, not because of the securities activities of an affiliated securities firm.”

    In fact, the lifting of barriers to financial-service mergers from Glass-Steagall’s repeal likely lessened the financial crisis’s impact, because banks were able to purchase failing brokerage houses. As Clinton, who still defends the repeal, said in a Business Week interview: “Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

    And any restoration of Glass-Steagall could have a devastating impact on Main Street banks still struggling from the real-estate bust. The respected InvestmentNews reports that “regional banks, still reeling from their real estate exposure, are finding relief — and a healthy measure of profitability — in their wealth management businesses.” Wealth management runs the gamut of financial services from deposits to investments and insurance, activities that would be prohibited if Glass-Steagall were to return.

    In fact, the “Volcker Rule” from the Dodd-Frank financial “reform,” which restricts bank trading and has been called “Glass-Steagall Lite,” could hit banks’ ability to provide these services. The rule bans banks from “proprietary trading” or trading for banks’ own portfolios, while purporting to still allow investing on behalf of customers.

    But a recent study by the respected Oliver Wyman consulting firm for the Securities Industry and Financial Markets Association shows all investing may be harmed. “Supporting customer trade flows often requires a larger number of additional trades to balance a dealer’s overall risk position and to maintain markets,” the study notes. (

    If regulators interpret the rule to outlaw these essential trades on behalf of customers, the result would be “higher trading costs and consequently lower returns over time for investors,” the study says.)

    But first, we must shatter the Glass-Steagall mythology of the Left that has crept into the narrative of the populist Right.

    A good place to start for those on the Right tempted to jump on the pro-Glass-Steagall bandwagon would be Wallison’s incisive FCIC dissent. Tracing 27 million risky or subprime loans to Fannie and Freddie and/or the CRA mandates, Wallison concludes that while other factors (but not Glass-Steagall repeal) were at play, “the sine qua non of the financial crisis was U.S. government housing policy.” And the sine qua non of real financial reform — which West will hopefully become of a leader of — should be countering government subsidies and overregulation.
     
  11. GenSeneca

    GenSeneca Well-Known Member

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    The US operates on a mixed economy.

    A mixed economy is an economy that includes a variety of private and public control, reflecting characteristics of both capitalism and socialism. Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety of government-sponsored aspects.

    Bill Clinton on the Banking Crisis - Bloomberg Businessweek

    MARIA BARTIROMO

    Mr. President, in 1999 you signed a bill essentially rolling back Glass-Steagall and deregulating banking. In light of what has gone on, do you regret that decision?

    FORMER PRESIDENT BILL CLINTON

    No, because it wasn't a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter. But I have really thought about this a lot. I don't see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch (MER) by Bank of America (BAC), which was much smoother than it would have been if I hadn't signed that bill.

    The US does operate on a mixed market.

    We're all entitled to our own opinions but not our own facts.

    "Like a lot of my Democratic colleagues I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourage affordable homeownership when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit when it comes to Fannie and Freddie, we were wrong." - Rep. Artur Davis (D)
    That "Rep." in front of his name stands for Representative, he IS the government.
     
  12. clarkatticus

    clarkatticus Well-Known Member

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    I can agree fannie and freddie were not regulated as they should have, but the impetus on selling mortgages was on the lenders themselves, nobody writes a mort check to fannie or freddie. Countrywide and WaMu and those like them pushed bad mortgages for personal profit and avarice not because fannie and freddie made them, they simply facilitated them to steal. Clinton was wrong in this decision. Allowing investment banks to provide capital for companies that they are also selling securities for is a giant and obvious conflict of interest, surely you can see this. The derivative market is the straw that broke Leyman's back and led to the liquidity crisis that toppled so many banks. In essence, yes Glass Steagall helped the banks consolidate but that increased the threat of "to big to fail" we keep *****ing about. Volker craps more knowledge in the morning than Greenspan collected in his entire life, Nobel and all, you can always find an economist to agree with Greenspan since so many hitched their wagon to his Yugo during the 90's.
     
  13. nobull

    nobull Well-Known Member

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    Well said...

    best regards
    doug
     
  14. GenSeneca

    GenSeneca Well-Known Member

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    That is incorrect. Both were regulated, i.e. there was regulatory oversight, the problem was enforcement. Politicians were warned, by regulators, and chose to do nothing.

    The GSE's became dumping grounds for sub prime mortgages. They were buying those loans to crank out mortgage backed securities and sell them on Wallstreet, who sold them on the derivatives market.

    You're pointing to specific links in the chain, carefully avoiding all the government links, and trying to assign blame disproportionately. I think there is enough to go around.

    Can you see the conflict of interest that exists when government interferes in the economy beyond the scope of protecting market participants from force and fraud?

    That's quite a Hasty Generalization.

    Did you support bailouts or not?

    Greenspan is a fraud and the Fed is just another government link in the chain that seems to avoid your scrutiny.

    On April 6, 2010 at the New-York Historical Society's Global Economic Panel, Volcker commented that the United States should consider adding a national sales tax similar to the Value Added Tax (VAT) imposed in European Countries, stating "If, at the end of the day, we need to raise taxes, we should raise taxes". The value added tax does not replace current taxes but is an additional tax on top of existing sales taxes. In European countries, the tax averages 20% with a 25% maximum by law.
    I can see why you like Volker... Higher taxes, bigger government, and more regulation... Sounds like the recipe for Utopia! :rolleyes:
     
  15. clarkatticus

    clarkatticus Well-Known Member

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    Oh come on, seneca, surely you don't put the government regulators at the same level of blame of the thieves from Countrywide? It wasn't like they were given the ability to do anything, look at what happened to the commodities regulation chairman (woman). fannie and freddie were end users and you mindless drone about the Fed gets old. Did it make mistakes? Hell yes, alot, but it still has a vital use once the regulations are back in place. As opposed to going back to a barter economy and mass anarchy, yes I did approve of the bailout, I also approve of BofA's current endictments and would walk around with a permanent woody if they would force all of them to break up like they made ATT do in the 70's. If you wish to come up with conspiracy theories on how Leyman Bros were screwed by (insert fav group here), fire it up, your just making excuses. I am 100% for a Value added tax replacing the IRS incrementally if need be. And finally, protecting the public from force and fraud is exactly what Glass/Steagall did, any other intrepretation just doesn't make sense-first cutting it in the 80's it caused the savings and loan crisis and then the last decade it caused this debacle.
     
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