WSJ - Why Capitalism Has an Image Problem

[tooqk4u22]

For those of you that want capitalism to re-emerge, or those that hate capitalism for no other reason other than that is hasn't worked for you and you feel you should be taken care of because of it, the following is an essay in the WSJ that is for you.

http://online.wsj.com/article/SB10000872396390443931404577549223178294822.html?mod=ITP_review_0

This touches on many of the points that have been peppered throughout other threads in this forum for bopth sides of the aisle (capitalist vs. socialist, moral obligations vs. not).  My takeaway is that the two factors causing causing the most harm to capitalism and all the good it can do is (1) government involvement and (2) lack of high moral obligation/virtue and can be summarize by the notion that good guys finish last....and if they are in the race and approaching the lead the government will ensure they don't win. 

I believe in capitalism, but I am driven by my principles (those vary person to person) so if I view something as wrong not only will I not do it but I want to stop it and get very frustrated when I can't and when others are doing it, getting raises/bonuses/promotions because of it.  Sometimes I feel I should just cave on those matters but I can't - the problem is that many people don't have as I of principles or will bend or break their principles on a whim.

As it was touched on in the essay, people forget about the enormous roll (if not the primary roll) that the government (both republicans and democrats) played in all the issues we have had over the last two decades.  To me the politician that epitomizes this issue more than any other is Barney Frank and his involvement in the housing run-up and then criticism/driver or regulation/demonizer of banks post fall out.  He is just one of many.

All politicians should be fired.

[velocistar237]

I am 100% in favor of many of the reforms to keep politics out of the economy. The evolution of a company seems to follow a pattern: from nimble and innovative to establishing the new norm to protecting their turf through lobbying Congress for favorable laws or starting wars of attrition in the courts. If we can prevent that sort of influence, then even large companies would be forced to survive on their performance. (See this book on part of the topic of separation of state and economy. The Tea Party and the Occupy movement should really team up on this issue.)

Three questions. How does something like Glass-Stegall go beyond "enforcement of basic laws against force, fraud and collusion"? It seems to me that basic laws to prevent collusion would end up being pretty complicated. How would those basic laws prevent things like the LIBOR scandal? How do we protect the commons without state action?

Unfortunately, I don't think that we can bring virtue back to the financial industry.

[James]

I am 100% in favor of many of the reforms to keep politics out of the economy. The evolution of a company seems to follow a pattern: from nimble and innovative to establishing the new norm to protecting their turf through lobbying Congress for favorable laws or starting wars of attrition in the courts. If we can prevent that sort of influence, then even large companies would be forced to survive on their performance. (See this book on part of the topic of separation of state and economy. The Tea Party and the Occupy movement should really team up on this issue.)

I absolutely agree!

It's sad that so much of the debate gets tied up in the rancor of politics, with each party protecting their own constituents and turf, and I don't see that changing any time soon.  But that doesn't mean we don't fight for what little improvements that can do some good, no matter which party bring them forward.  So often we value intentions too much and we need to focus instead on effects of government actions, both intended and unintended.  I think the effects of capitalism outweigh the good intentions of those who want to greatly limit it. (obviously some limits are needed)

Great article with interesting observations, thanks for the link.

[arebelspy]

But if we don't put restrictions on the automobile, my buggy whip manufacturing company will go out of business!  Clearly we need to pass laws to protect it.

[James]

But if we don't put restrictions on the automobile, my buggy whip manufacturing company will go out of business!  Clearly we need to pass laws to protect it.

I see that so much in health care, each profession wants to expand what their specialty can do and restrict everyone else to protect their own group.  And millions are spent by associations to get politicians to follow their requests, all on the basis of "patient safety" and other key words, none of which are based on the empirical research we are all taught to follow in school on the way to our professions.  I've been fighting that in my own association, but it's like pissing in the wind.