Capitalism: the Worst System -- Except for all the Rest

The only capital democrat presidential candidates respect is political capital wrought from pandering. Newsflash: capitalism is still the best system for organizing economic life in a free society.

Liberals talk about the anger of the right, but Clinton, the very embodiment of ugliness and anger, could barely bring herself to support capitalism in a faux debate, waffling some platitudes about supporting small businesses. In an interview just last week, she couldn’t even elaborate on the difference between a democrat and a socialist

Bernie Sanders comes across as an angry socialist curmudgeon full of resentment towards American spirit and ingenuity. He seems to attract misfits from the discredited Occupy Wall Street movement, but you’d never know that many of our 99 percenters would be in the top percent of income earners worldwide. Economic mobility fluctuates, but there’s still more of it here than anywhere.

America is exceptional, the Nordic region mostly homogeneous and unexceptional; nevertheless, Sanders would rather emulate Denmark, not much bigger than his own small state of Vermont, and hardly a beacon of diversity. Scandinavia is not the cradle-to-grave paradise portrayed by socialists, and doesn'tr provide a desirable model for future prosperity in the rest of the world.  Furthermore, much of the wealth they now redistribute was created before their inglorious bout with Third Way socialism. Indeed, Sweden dropped from the fourth richest nation to the 13th during their “Third Way” socialism experiment between 1975 to mid-1990s. Since then, they’ve veered towards the center-right, detailed by the Economist in “The strange death of social-democratic Sweden.” 

Socialists sometimes revert to industrial policy to garner support for government intrusion into free markets. Industrial policy is essentially sector-specific government intervention to pick winners and losers. It sometimes works when immature industries prevail with scant competition abroad, such as when Henry VII imposed tariffs on wool exporters and granted temporary monopolies to cloth manufacturers to encourage the development of domestic industries. 

I suppose there have been a few other successes since good Ol’ Henry carried the scepter for the Tudors, but not many. Again, the Economist corroborates this supposition in a 2010 article entitled "Picking winners, Saving Losers":

“Industrial policy remains controversial. Defined as the attempt by government to promote the growth of particular industrial sectors and companies, there have been successes, but also many expensive failures. Policy may be designed to support or restructure old, struggling sectors, such as steel or textiles, or to try to construct new industries, such as robotics or nanotechnology. Neither tack has met with much success. Governments rarely evaluate the costs and benefits properly.”

Government interference in markets to create Keynesian-style demand often focuses on general needs; but free-market, supply-side dynamics produce specific goods and services that often foster new markets. Consider the world’s largest company: Apple.  There was a potential, nebulous market, but the public wasn’t exactly clamoring for the first iteration of specific products like iPods, iMacs, iPads and iPhones until after they were created. Perhaps you remember some of those Apple product launch extravaganzas where the rather tech-savvy audience salivates in geeky excitement as heretofore secret product features are finally revealed by Steve Jobs or his brilliant engineers. How could there be stimulative demand for something secret to the general public? It was supply-side innovation that lead to such remarkable growth and productivity gains that is has a measurable impact on the U.S. economy.

One example of successful government economic stimulation that socialists point to is the Internet. It wasn’t actually invented by Al Gore -- another angry and pessimistic democrat -- but evolved from the Advanced Research Projects Agency Network. ARPANET, the first network to implement the now ubiquitous TCP/IP protocols, was funded by the DOD. It’s somewhat analogous to government building highways along which interstate commerce can transit; indeed, an early moniker for the network that connects computers worldwide was Information Superhighway. 

But just as interstate highways create the potential for commerce, the Information Superhighway was laden with untapped potential.  An inconvenient fact is that it remained a relatively quiet backroad riddled with government potholes and virtual bridges emerging into a cyberspace void. Thanks to private industry, it became a dynamic, digital Route 66 where ingenious entrepreneurs got their kicks engineering a robust network of speedy off-ramps and byways leading to bustling e-commerce and social media outlets. 

Government did what it’s supposed to do -- supply the public infrastructure. But thanks to private-sector innovation we now have an online shopping day named Cyber Monday and an ever burgeoning Internet of Things to remotely manipulate our household appliances and tell us when the fridge is low on milk or the dog went in the corner.

Just as government control has an inverse relationship to personal freedom, socialism, ensconced in snail-paced bureaucracies that forever validate Parkinson’s Law (work expands so as to fill the time available for its completion), has an inverse relationship to innovation. Examples abound, but sticking with the tech theme, consider Wi-Fi. 

Nearly every modern gizmo has the ability to connect to the internet using this wireless technology. For those who frequent airports, popular coffee shops and hotels, it seems that every device under the sun is connected simultaneously, creating bottlenecks. Enter Globalstar, a company that provides mobile voice and data communications services through its network of satellites and ground stations. Their satellite spectrum is next to the Public Wi-Fi Band, and real-world tests and affidavits indicate that when it is deployed in what’s known as Terrestrial Low Power Service that it increases Wi-Fi capacity by a third or more.

The delay: the FCC, who’ve had the TLPS proposal under their purview for over three years. Rather ironic, since Chairman Wheeler has noted how “regulatory delay plus burdensome red tape slowed the speed of innovation” which restrained investments in the communications sector. The reasons for the FCC’s deliberative process are manifold as they entertain every conceivable and frivolous objection from competitors. Our airwaves need regulation, but three years… and counting, for a promising technology like TLPS (supported by public advocacy groups and the former Executive Director of the National Broadband Plan) wreaks of crony capitalism protecting entrenched interests.

We know that capitalism does not always further the public good; but socialism, in all its guises, is downright antagonistic toward competition and meritocracy. Karl Marx once said that religion is the opium of the masses, but as throngs of naïve youth jump on the Sander’s bandwagon, I’m thinking that socialism is the opium of the millennial masses. Controlled by indulgent emotions rather than their brains, they dispel history’s empirical evidence, believing that Bernie will finally usher in a socialist utopia.   

These disaffected youth disrespect the intellectual property rights that reward risk takers who produce the products they adore. Their dogma is so strong they are oblivious to the reality that Marx’ prediction “from each according to their ability to each according to their needs” went horribly wrong. Let’s hope their brains kick in before they get the government they deserve:  a socialist dictatorship of, by and for the proletariat. 

Capitalism is far from perfect, but instead of sowing the seeds of its own destruction as Marx’s historical materialism predicted, we’ve tweaked around the edges to ensure a flexible, long-enduring system that is much more aligned with human nature, freedom, and economic growth. Researchers from the Heritage Foundation expounded on the relationship between freedom and capitalism, noting: “The correlation between economic freedom and prosperity is stunningly high,” more freedom means more income

By contrast, socialism compels bigger government and less freedom. When Obama was busy redistributing our wealth, even querying how much money anyone really needs, he infamously said “You didn’t build that!” If Sanders or Clinton get their way, you probably won’t build much again. It seems they’d rather we all be equal in poverty.  

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