Wednesday, April 3, 2013

On Capitalism's "Conflict of Interest"

This letter appeared in the NJ Star-Ledger on March 5, 2013:

Secrets of capitalism 
The dirty little secret of capitalism is this: When it comes to providing the necessities of life — health care, housing, education, sanitation and, yes, even defense — capitalism has an inherent conflict of interest between providing the best possible services for the greatest number on the one hand, and providing the highest possible return to investors on the other. 
Real socialists get this. Those who tell you that Obamacare is socialism don’t want you to get it. 
Robert Lee Hefter, Wanamassa 

I left the following rebuttal comments. This letter required a rather lengthy response, I think: 

RE: "Secrets of Capitalism"

The idea that doing bad things to your customers, or shortchanging them, or shrinking your customer base is the path to profits has got to be the dopiest idea in the economic history. The absurdity of this claim is self-evident.

When was the last time you sought out the most incompetent doctor, plumber, or auto mechanic you could find; the restaurant with the worst service and food; the car company that Consumer Reports said produced the most "lemons"; the product of any kind that broke the quickest; the service with the highest price? As any rational investor knows, the best companies to invest one's savings in long term are those that have a growing base of satisfied, repeat customers, and that can only happen when companies provide products and services that people value, can afford, and are willing to pay for.

Capitalism is the system of individual rights and rights-protecting government, in which every person is free to think and act on his own judgment, work and trade with others, earn and keep property, and pursue his own goals, values, and happiness. For this reason, capitalism's legacy is one of prosperity and peace, in which the basic problems of survival--food, clothing, shelter, healthcare--were solved by productive, profit-seeking businessmen, allowing "the masses" to rise above bare subsistence and into middle class flourishing.

The inherent conflict of interest occurs under socialism. The government's proper domestic job is to protect individual's from criminals. Under capitalism, when you are assaulted by a criminal, you turn to government for restitution, protection, and justice. But, what happens when the government becomes the criminal, redistributing the people's wealth and forcibly dictating how they live their lives? Who do you then turn to for protection, if your protectors are the criminals? For this reason, socialism's legacy is mass poverty, mass murder, and war.

Real socialists know that socialism can be "achieved" in more ways than one. It doesn't always require nationalization of industry, a la communism under Stalin or Mao. It can be brought by control of industry, a la fascism under Mussolini and Hitler. While Obama is no Hitler, ObamaCare is back-door socialism, administered by government controlled, quasi-private "insurance" companies--i.e., fascism. If Robert Hefter sees a "conflict of interest" in ObamaCare, it's no wonder: He's looking at socialism, whether or not he chooses to recognize it.

Related Reading:

The Fruits of Capitalism Are All Around Us, by Ari Armstrong

The Choice is Profits or Guns, Freedom or Tyranny

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