Sunday, July 26, 2020

On ‘Capitalist Government’ and Corporate Bailouts



I posted this answer:

Strictly speaking, there is no such thing as “capitalist government”. 

There are basically two types of social organization; statism and freedom, and thus fundamentally two types of government. Statism features authoritarian government, under which people live and act only by permission, or by order, of some ruling authority. Freedom features rights-securing government, under which people enjoy legal protection of inalienable individual rights to life, liberty, earned property, and the pursuit of happiness. All governments are one or the other, or a mixture thereof. 

Under statism, the government often favors some groups over others, such as “labor” or “workers” over “business” or “capitalists,” or vice-versa, but neither recognizes nor secures individual rights. Under rights-securing, or free, government, government favors no group, but treats everyone equally under the law by securing every individual’s rights, equally and at all times, regardless of race, creed, religion, natural endowments, inheritance, economic status, gender, sexual orientation, etc. A free, rights-securing government steps in only against those who violate anyone else’s rights **.

Since capitalism is the social system of individual rights, including rights to free trade, free market capitalism naturally flourishes under free government. But there cannot be a “capitalist government,” since capitalism is freedom and freedom cannot logically be imposed; it can only be protected. Freedom is the absence of the government imposing its will on law-abiding citizens.

Importantly, the same free government can not stop anyone from living according to their own values, including non- or even anti-capitalist values, so long as they respect the rights of others. The Communistic Societies of the United States by Charles Nordhoff and History of American Socialisms by John Humphrey Noyes document the many experiments in socialism forged by America’s early (pre-Marx) socialist movements. A crucial point stressed repeatedly throughout the books is the reverence with which these pioneering socialists of the era held for America’s system of free government--the very government that fostered the free market capitalism that they rejected. Many of these socialist communities were created by refugees from European persecution seeking the freedom to practice their socialist creed. Typical of their attitude is expressed by Noyes, the Founder of one of the socialisms, during the conclusion of his book:

The example of the Shakers [one of the longer-lived voluntary socialisms] has demonstrated, not merely that successful Communism is subjectively possible, but that this nation is free enough to let it grow. [P. 669, my emphasis]

In other words, the free limited government created by the Founders made sure that the socialists could not be stopped by people who disagreed with their socialistic lifestyles. Quite the opposite, the socialists coexisted peacefully with the surrounding capitalism, including through trade. The freedom guaranteed by the laws of America’s rights-securing government extended to socialist and non-socialist alike. As Melvin D. Barger observed, “Then or now, nothing in the fundamental American idea was opposed to the socialistic communities of the early 19th century, since they were voluntary arrangements and used peaceful means.” Voluntary socialism is perfectly compatible with laissez faire capitalism precisely because capitalism features free government, not “capitalist government”.

Redistribution of wealth is by definition a feature of socialism, not capitalism. Forcible redistribution of wealth is a feature of statist socialism--socialism imposed from the top down by government force. Redistribution for the poor (welfare), for the “workers” (unemployment “insurance”), for the middle class (Social Security), or for business (corporate bailouts) are all manifestations of socialism, by definition. As long as the redistribution of wealth is voluntary, with those who wish to keep their wealth left unmolested, it is perfectly compatible with laws under free government. Respect for property rights is a feature of free government. It is not a feature of statism. Government bailouts of corporations, like government imposed welfare, unemployment insurance, and Social Security, would never happen under a free government because those programs violate the property rights of the individuals and businesses whose wealth is seized for redistribution. They are features of statist socialism, not a free government. 

As to the question at hand, the premise that “capitalist governments bail out large corporations” is a contradiction-in-terms. “Capitalist government” is a myth. A free government, the only type of government under which capitalism can flourish, would never bail out a corporation because that would violate individual rights. Likewise, a free government wouldn’t forbid any individual, or association of individuals, from voluntarily agreeing to pool their wealth to bail out a corporation because voluntary socialism would not be outlawed ***. A government that bails out corporations may superficially seem like a “capitalist government” ****. But in fact such a government policy is socialism for business, and cannot logically be labeled “capitalist” in any form. Corporate bailouts are a policy of socialist government--a statist government that imposes socialism by force.

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* [Quora is a social media website founded by two former Facebook employees. According to Wikipedia:

Quora is a question-and-answer website where questions are created, answered, edited and organized by its community of users. The company was founded in June 2009, and the website was made available to the public on June 21, 2010.[3]Quora aggregates questions and answers to topics. Users can collaborate by editing questions and suggesting edits to other users' answers.[4]

[You can also reply to other users’ answers.]

** [Rights are guarantees to freedom of action in pursuit of one’s values, not a claim on the lives or property of others based on need, misfortunate, or the like.]

*** [“Voluntary socialism” is, in fact, a feature of capitalism. Freedom of association is one of the inalienable individual rights that are guaranteed under free government.]

**** [A government that favors business and corporations may, in a very narrow sense, be described as “capitalist government” in that it is in “partnership” with big business. But that is not capitalism as a social system. One must distinguish between capitalists in the narrow economic sense and capitalism in the broader philosophic sense. Capitalists, or business corporations, can exist under some forms of statism, such as fascism. Genuine capitalism features the separation of business and state in the same way and for the same reasons as separation of church and state.

Related Reading:





The Capitalist Manifesto by Andrew Berstein




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