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Posts Tagged ‘capitalism’

If you read this site, then you know the title is in jest.  However, I am putting a call out to recommendations of books, websites, or any other material that any CAI readers or authors would recommend as being powerful arguments for socialist or socialist-like policies.  The reason for this request is in anticipation of a small group discussion I will be leading for 4 weeks this summer at my church on capitalism and socialism.  

As evidenced on the “pages” of this blog and also in many other outside discussions I have had with people there is considerable support for redistribution of wealth, and socialization of services amongst Christians.  My feelings are opposed to these views, but I am legitimately curious how people (and Christians in particular) come to embrace it.  And I am hoping in the group to have a equal proportion of capitalists and socialists (or whatever the preferred term is) engage in discourse on the pros and cons of each position and also where they fit into a biblical and gospel-oriented framework.  Since I will be moderating the discussion and hope to be as open as possible to the views of others I wanted to delve further into the literature beyond just The Communist Manifestoerr, the parts I have read at least.

Et tu Jesus?

Et tu Jesus?

Thanks for the help dear readers.

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What a sad couple of weeks it has been here at Criticism As Inspiration.  I offer a sincere apology to all readers who visited our blog numerous times in the past couple of weeks, each time disappointed with our lack of posts.  But here’s a conversation starter…

Mirek Topolánek is currently serving as the prime minister of the Czech Republic (though he was ousted with a no confidence vote today…) as well as the president of the European Union.  Granted he is more right-of-center, he is very much against President Obama’s economic recovery plan.  I have not voiced much regarding this legislation, primarily because I don’t know much about it.  I desired change for American politics, but hiking up the national deficit is all too familiar.

What’s this?  The commie is upset about government spending and his beloved President Obama?  Yes, I am upset about the current state of the economy all over the world.  This is the perfect time to enact Plan “C”

WORKINGMEN OF ALL COUNTRIES, UNITE!

Of course I am being facetious.  I suspect that the market system has flaws, though I am convinced that neither Wall Street nor the big banks are solely to blame for our economic recession.  If you look at the chart below you will see that household (personal) debt in the United States has officially reached and surpassed our GDP:

debt2

I am not one for staring at charts (I’m more of a map kind of guy), but it’s rather easy to observe that our household debt has certainly been climbing over the past 25 years.  You can see it passing our GDP in 2007 and over the past two years it is continuing to climb.  What does that mean?  Who cares about our household debt in relationship to GDP?  What is most striking about this chart is that household debt has reached this level before.  Think 1929:

household

If you look at this chart you can see that last time American household debt was near 100% of our GDP was in 1929, followed by a rapid depression (which is called the Great Depression).  This gives us an interesting insight into a possible cause of the current recession.  Columbia Business School professor David Beim worded it well:

The problem is us.  The problem is not the banks, greedy though they may be, overpaid though they may be.  The problem is us…  We’ve been living very high on the hog.  Our living standard has been rising dramatically in the last 25 years.  And we have been borrowing much of the money to make that prosperity happen.

This is old news (I heard it on NPR almost a month ago), but bearing it in mind, perhaps we Americans ought to reorient the way that we see life (especially success, wealth, meaning, and fulfillment).  I’ve seen families living what would be considered “poverty-stricken” lives (according to information brought to light in this insightful post) while driving Escalades.  We’ve put ourselves in debt up to our ears (and climbing), and perhaps more borrowing ought not be our next step.  Maybe we ought to drive the cheaper, more fuel-efficient car.  Maybe we ought to eat out less and cook at home more.  Maybe we ought not purchase that big screen nor update our DVD library to Blu-Ray.  Maybe we ought not give Hollywood another record-breaking year.  I’m not sure where to draw the line, but smalls steps in the right direction would be a good start.

If we don’t choose change the way we live we will most certainly be forced to.

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To Sum Up

walter3Walter E. Williams writes here about a topic you’ve heard me gripe on before… managing economies.  He just does it better.

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The Acton PowerBlog has a few posts on this question.  One of the responses provided by Hunter Baker is from Aristotle in response to Plato’s call to socialism:

What is common to the greatest number gets the least amount of care. People pay most attention to what is their own: they care less for what is common; or, at any rate, they care for it only to the extent to which each is individually concerned. Even when there is no other cause for inattention, people are more prone to neglect their duty when they think that another attending to it . . .

“The Republic advocated that women and children also be common property. What Aristotle wrote about sons applies to other things, as well:”

[Under the plan of The Republic] each citizen will have a thousand sons; they will not be the sons of each citizen individually; any son whatever will be equally the son of any father whatever. The result will be that all will neglect all.

The problem with socialism, I believe, is the same as the “tragedy of the commons“, a theory originally applied to land use.  Common ownership of a resource, or rather lack of any private ownership, will many times cause the improper use of that resource.  In addition to the environmental application of this theory, I also think it most definitely applies to ideas like universal health coverage, social security, and even our government’s attempt at spreading wealth through the Community Reinvestment Act that is the cause of our real estate collapse.

When the reward of a certain behavior is limited to specific individuals, but the risk or damage of that same behavior is spread to society at large… then there is no impetus for those specific individuals to not engage in that act.

There are some other good posts on this subject at Acton, so I encourage you to check it out.

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If you regularly read CAI then you need no introduction to the fact that I am a fierce believer in capitalism and the free market as the best means to manage economies.  This will oftentimes lead those who disagree to battle cries of greed, corruption, scandal, more greed, callousness, materialism, greed again, etc.  I have tried my best to be completely honest and say, “Yes, this can exist within this framework.”  I then try to make a convincing case that the alternative is actually worse, and best to try and work within the most complete and realistic of economic policies, in my opinion free-market capitalism, then to embrace the alternative.

One of the shining examples of both the best and worst of this very arrangement is a company like Walmart.  Many people have a visceral reaction to Walmart, and actually hate it as an entity and I believe that is an irrational viewpoint.  I support Walmart and their business acumen, and at the same time I can easily acknowledge their shortcomings in matters of integrity and corporate values.  I believe that good and successful businesses will make good and honest choices as far as how they treat both their customers and their employees.  But that is not a prerequisite of forming a business, and nor should it be forced upon companies.  In general I believe organizations should be able to fall or succeed based on their practices and how consumers respond to them, not on forced requirements.

WalmartOne of the more popular diatribes against the company is the 2005 film Wal-Mart: The High Cost of Low Price.  If you have not seen this, then I highly recommend you do.  While this film is so incredibly biased as to frustrate anyone truly interested in objectivity, it is still interesting to see, especially for it’s testimony from former Walmart employees.  Their testimony definitely shows the underbelly of this company, and some of the demons they have.  This film is hardly a documentary though, more like propaganda, as there is not even an attempt at telling two sides of a story.  For instance, one section of the film comments on the size of subsidies that governments will hand out to Walmart to get them to set up shop in their cities or states.  Subsidies as high as $2.1 million, which is “money that could have saved the 3 schools that we had to close this year,” as one local citizen lamented  A counterpoint that the film could have made is to point out that subsidies are not cash.  The city or state did not give Walmart 2 million dollars that it could have spent on schools, but rather did not require Walmart to pay 2 million dollars in various starting taxes.  A second point could have been to show how much tax revenue Walmart brings in to a city or state.  This article from 2002 talks about Walmart moving a store from Rocklin, CA to nearby Roseville, thus releaving Rocklin of $650,000 in annual tax revenue, 10% of their combined revenue.  So you could see a city being justified in trying to lure Walmart to it’s town when any subsidies they allow could be replenished in a few years, and then have enormous positive generation for years to come.

Here are some other areas where I think Walmart gets shortchanged, or misrepresented.

(more…)

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The John Templeton Foundation has been doing a series on the “Big Questions.”  The fourth in the series is Does the free market corrode moral character?

The Foundation gathered 13 scholars, writers, economists, and even chess player Garry Kasparov to contribute.  A very interesting read (with video interviews as well) that covers the yes, no and maybe answers.

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Earlier this year when oil was at $150 dollars a barrel, and congress forced oil executives to testify about price-gouging and other nonsense, there was talk of trying to control the price (W. Bush included).  Many of my favorite economists, including Thomas Sowell, explained that supply and demand will (and should) dictate the price.  They explained that with higher prices will come change in behavior and reduced consumption which could lead to lower demand and lower prices – which has happened (though this was not a certainty since much of the demand was from China and India, and verily out of our consumers control).

Well many of us are thankful for the current $60 dollar price of a barrel.  It might be too much to hope that this lesson will be remembered by our leaders next time things get dire, but here’s hoping anyway.

MARK ADDS: Further confirmation that supply and demand are the true forces to be reckoned with.  Now that demand is down, the only way to raise or stabilize prices is to reduce supply.  Thanks OPEC.  Glad you have a near monopoly on that stuff.

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