Economic: Laissez-faire Capitalism: Is it fair?

[Wags]

As I understand it, Ron Paul is more or less in favor of economic individualism and laissez-fair capitalism. He hasn't specifically said so, or I've yet to hear it from him, but I think he does advocate it. Laissez-faire essentially translates to "let it be" and the gist of these policies is that the people run the system; let the free market grow and produce goods and have free trade... let individuals pursue selfish interests so long as they do not infringe upon the rights of others.

Well, that sounds fine and dandy to me. I'm not an economics person, but I think I can understand a theory that is good and doable. However, I was talking with someone that warned against aristocracies and corrupt monopolies forming as a result of these policies... if there are no regulations on small businesses and on corporations, they'd just grow bigger and bigger. But I had to laugh at that. Don't we already have that problem? Aren't there already wealthy elites in power (private owners of the Fed, I'm looking at you)? Hasn't someone already granted corporations the same rights as an individual? Seems to me that whatever regulations we've put on corporations we've also counteracted by giving them human rights. Obviously, corporations are run by people, but are not themselves people. We'd have punished them a long, long time ago if they really are people.

Though I'm not exactly sure what kind of economic government we do have. It seems to operate under a general capitalistic ring, but I'm feeling obvious socialist undertones. The income tax smacks of it. Throw in some Orwell control, and that seems to be what we're living with now. So I wanted to ask what your views are on what Ron Paul proposes for our economic system. Do you think laissez-faire could lead to rich elites in wealth and corrupting the free market? Or do you think it will more or less run itself if we let it be (so long as people don't infringe on rights)?

The interesting thing about this proposed economic system is just that: it has only ever been proposed. No genuinely free market system has existed, according to research I've done. Maybe we should give freedom a shot, eh?

 

[PaulShark]

I'll bring up a current sub-point, or a possible transition issue. If Ron Paul proposes cutting government immediately, that would cut American jobs in an era when corporations aren't exactly hiring. Sure taxes will go down as well, but what would incentivize the corporations to begin hiring again?

With the lack of government jobs, people will flood to corporations, and corporations won't pick them up immediately. What I hope comes of this is greater private competition and greater market creativity. With more rules it's more difficult to create creativity and competition. At the same time however, monopolies need to be prevented (essentially the capitalist version of modern-day government), and SOME rules need to be enforced to ensure less corruption. Corporations are just as corruptable as government. Back in ye olde times, government acted nothing more than a simple referee and an enforcer. It did not monopolize, and it did not provide many jobs. Government is the first step, but in many ways, corporations are just like socialist government. The idea of limited liability is socialistic. The idea that the people in a corporation are not entirely liable for themselves. Where the rest of society must pick up for their mistake.

Pure capitalism is sole proprietorships, partnerships, and co-ops, with a limited liability. Corporations have the same problems government has. The idea of personal responsibility. Sure prices of items from corporate enterprises may seem cheap at first for a society, but the society in many ways pays for the corporation. This is why we have those bail-outs and the idea of "too big to fail". It isn't sustainable. Corporations will grow into these monopolies to the point where they emulate a government system. Don't get me wrong, borrowing money is a good thing, but pepetural borrowing to the point where a debt can never be paid back, and debt by stealing money from a people through inflation and printing money is grossly wrong. We need to give power back to the individual. Just my 3am rant.

 

[HigherVision]

Private businesses in a free market are organizations that have to compete against each other to win over customers' business. Government on the other hand is an organization that is compulsory, you are forced to pay for their 'services' under the threat of violence. Why on earth would anyone want the latter to 'regulate', i.e. fuck up and rig, the first? Think about it. This is what government 'regulations' are really all about:

 

[rag-time4]

However, I was talking with someone that warned against aristocracies and corrupt monopolies forming as a result of these policies... if there are no regulations on small businesses and on corporations, they'd just grow bigger and bigger. But I had to laugh at that. Don't we already have that problem? Aren't there already wealthy elites in power (private owners of the Fed, I'm looking at you)? Hasn't someone already granted corporations the same rights as an individual?
Though I'm not exactly sure what kind of economic government we do have. It seems to operate under a general capitalistic ring, but I'm feeling obvious socialist undertones. The income tax smacks of it. Throw in some Orwell control, and that seems to be what we're living with now. So I wanted to ask what your views are on what Ron Paul proposes for our economic system. Do you think laissez-faire could lead to rich elites in wealth and corrupting the free market? Or do you think it will more or less run itself if we let it be (so long as people don't infringe on rights)?

The interesting thing about this proposed economic system is just that: it has only ever been proposed. No genuinely free market system has existed, according to research I've done. Maybe we should give freedom a shot, eh?

Attempting to address your (abridged) post in order...

Ron Paul certainly favors laissez-faire capitalism. He refers to his economic philosophy as "Austrian School economics" or "free market economics" and uses these two terms interchangably.

I tend to agree with the person you were talking to. Capitalism lends itself to wealth accumulation and, through the process of competition, monopolies will emerge. With accumulation of wealth can come increased power to influence governments, markets, and the activities and beliefs of others. I don't think it's anything to laugh at, but I do agree we are already there. One problem in our nation is that the influence of corporations and the mega-rich on our government is far out of hand. The corporate and wealthy sector uses the government in its own interest, so dismantling power chokepoints in the government will shake things up for certain. It will be on the American people to use our LIBERTY to organize, protest, and resist where necessary and form new organizations and institutions for checking corporate power.

Corportations were given personhood status very shortly after ratification of the 14th amendment, which also, it can be argued, used emancipation of black people as a cover for putting all Americans into second class citizenship - becoming subject to government jurisdiction rather than sovereign State citizens. The vast majority of 14th amendment cases argued before the Supreme Court have been concerning corporations, according to the DVD "The Corporation".

The economic government we have is called "Keynesianism" or "Keynesian economics." This belief system generally seeks to promote economic growth and stability by using government spending, sometimes deficit spending, to stimulate the demand/consumption side of the economy. In American practice, government spending is out of control due to total fiat currency - unlimited debt, unlimited printing of money, unlimited government spending. Austrian School economists generally don't believe that this is sustainable, in part because overabundance of currency leads to sloppy investment, which causes economic bubbles. Interestingly, you can look up "economic bubble" on Wikipedia and see that Austrian School ideas about economic bubbles are not widely accepted in public. Notably, however, Ron Paul has made several public predictions about future economic crashes due to economic bubbles. In 1983, Dr. Paul predicted the crash of 1987, and in 2001 Dr. Paul predicted the housing market crash. These predictions can both be seen on youtube.

Ultimately, I don't think that laissez-faire capitalism in and of itself is capable of producing free markets. Austrian School economists, from my brief study of them, do not agree with Karl Marx' view of the capitalist / worker relationship and the power relationship involved. I think their arguments against Marx' position on this rely on straw man tactics, and tend to not hold up. Because of the capitalist / worker class struggle, I think that both sides apply pressure to one another as part of the marketplace which disrupts the free market. Also, the power relationship, I think, produces a business cycle related to overproduction and underconsumption, where the working class struggles to gain more of the products for itself, while the capitalist class struggles to maintain more profits for itself.

I do think that Laissez-Faire policies are the most compatible with individual liberty, but I also believe that people need to freely form more cooperative and collective businesses to help ensure that class struggle doesn't disrupt market activity, and to ensure a more equitable distribution of social and economic power.

 

[Carlybee]

The Myth that Laissez Faire Is Responsible for Our Present Crisis

http://mises.org/daily/3165

 

[rag-time4]

The Myth that Laissez Faire Is Responsible for Our Present Crisis

http://mises.org/daily/3165

Great article! I agree that our system is not a laissez faire system and hasnt been for some time. I havent read through the whole thing, but I did read the section under the Marx heading. I saw the article discuss Marx' view on capitalist wages, and I think Marx' view on that is/was correct. The article also talked about government intervention and its failures, and I think the article is correct. The part of Marx' views about forming a powerful state are where he is weak, but I think that a lot of what he said about power relations in capitalism were correct. The question is what to do about it. State power lends itself, even if democratic, lends itself to takeover.

From what Ive read, the article doesnt discuss corporatism - the use of state power by corporations.

 

[awake]

As I understand it, Ron Paul is more or less in favor of economic individualism and laissez-fair capitalism. He hasn't specifically said so, or I've yet to hear it from him, but I think he does advocate it. Laissez-faire essentially translates to "let it be" and the gist of these policies is that the people run the system; let the free market grow and produce goods and have free trade... let individuals pursue selfish interests so long as they do not infringe upon the rights of others.

Well, that sounds fine and dandy to me. I'm not an economics person, but I think I can understand a theory that is good and doable. However, I was talking with someone that warned against aristocracies and corrupt monopolies forming as a result of these policies... if there are no regulations on small businesses and on corporations, they'd just grow bigger and bigger. But I had to laugh at that. Don't we already have that problem? Aren't there already wealthy elites in power (private owners of the Fed, I'm looking at you)? Hasn't someone already granted corporations the same rights as an individual? Seems to me that whatever regulations we've put on corporations we've also counteracted by giving them human rights. Obviously, corporations are run by people, but are not themselves people. We'd have punished them a long, long time ago if they really are people.

Though I'm not exactly sure what kind of economic government we do have. It seems to operate under a general capitalistic ring, but I'm feeling obvious socialist undertones. The income tax smacks of it. Throw in some Orwell control, and that seems to be what we're living with now. So I wanted to ask what your views are on what Ron Paul proposes for our economic system. Do you think laissez-faire could lead to rich elites in wealth and corrupting the free market? Or do you think it will more or less run itself if we let it be (so long as people don't infringe on rights)?

The interesting thing about this proposed economic system is just that: it has only ever been proposed. No genuinely free market system has existed, according to research I've done. Maybe we should give freedom a shot, eh?

First off, good job recognizing that the 'corporations run wild' argument is exactly what government has given us. Laissez-faire has been tried in elements and degrees, but its full scope has never been brought into realization. The reason I believe is that it would take a spiritual shift in many people who view violence as a proper means of human interaction.

Monopolies exist because governments issue it. Government has spread the world over and controls and abuses us all. The whole concept with out government corporations would 'run wild' is a another gigantic lie that helps the state hide and thrive.

Like a hostage taker the state convinces you that freedom is scary and that there is nothing worth seeing or doing. If you leave they cease to have any power or meaning.

Is a 'let it be' system "fair"? Who knows, but we already know what we have is not "fair". Taking by way of threats of violence is the ultimate in not fair.