What is the answer to Detroit?

I was watching a show Forgotten Planet and one particular episode caught my attention. It was an episode on Detroit, its heyday and its demise. For a long time Detroit was seen as the industrial mecca in the US, turning out automobiles, steel works, mining operations and one of the country's best school systems. But all of this was to come to an end in the wake of economic policies and disastrous government programs. Detroit now sits in ruin. So what would it take to return this city to the forefront of production and the ability for its citizens to prosper? Is the answer to just get government out of the way?

In an article written in 2013 Patrick Barron makes his case for a "Free Detroit".  His idea is to rid the city of all regulations and all taxation. Barron asks, "What if Detroit became a free city in which government provided for public safety, honest courts, protection of property rights, and little else? Might not unabated free enterprise take hold as it always has in America?" adding next, "All that Detroit really needs is economic freedom and secure property rights. Give Detroit its freedom from all manner of government, including the federal government. Declare Detroit a free city. (You can rest assured, Detroit, that America will come to your rescue if those bloodthirsty Canadians attack!) In other words, no one would pay any federal taxes whatsoever or be subject to any federal regulations whatsoever. Wouldn’t it be nice not to pay federal taxes, not even Social Security and Medicare taxes? Do the same with Michigan taxes. No taxes BUT also no federal or state aid either."

How can they have it both ways? You cannot allow zero taxation and have a funded government, even miniscule government compared to the current model.

The rest of the article reads pretty much how one can envision any free marketer article going. Cooperative experiences between citizens without the need for bureaucratic red tape, restrictions licenses, regulations and of course the end to the state sponsored welfare state.

All of these things are in line with the thinking of most Laissez Faire proponents, and of course with most who are familiar with the great Henry Hazlitt and Ludwig von Mises.

What Detroit has become is, in large part, due to the enormity of its city government, the State Government and helped along by the Federal Government. Programs that were meant to help the poor or working poor were in fact reducing them down to a life of dependency, and of course when the government finally runs out of other people money to give away, catastrophe ensues. The lesson to be learned from its fall is that there is such a thing as too much government.

But what is the answer to get it going again?

As Mr. Barron states it may lie in doing the complete opposite of the cause.

In response to Barron's writings on Detroit Chief Investment Officer of Universa Investments LP Mark Spitznagle writes, "Detroit can correct its past public-sector ineptitude and abuses by unleashing the private sector’s vast potential, rooted in the metropolitan region’s vibrant entrepreneurial and manufacturing culture, skilled workforce, and a robust technology base nurtured by world-class institutions like the University of Michigan. The city’s position on an important border crossing and access to an enormous fresh-water supply from the Great Lakes, not to mention the business community’s unrelenting support, enhance its prospects further."

Echoing the late Murray Rothbard, such a collapse “is the ‘recovery’ process, and far from being an evil scourge, is the necessary and beneficial return, says Spitznagle.

I think Detroit can be the greatest study of if and how free market and Austrian economic principles and policies can work. Whether it succeeds or fails will be the greatest milestone in the sake of accepted economic means to ends.

The War Boom Fallacy

There is a persistent fallacy that is used by people in terms of economic thought and practice. The War Boom Fallacy is The Broken Window Fallacy used to try and explain War Time economics. Under the theory war brings jobs, production and wealth to workers and producers. At its base is the assumption that ALL things produced in War or for War are needed. War being described as the engine for new prosperity and returned wealth gains not only for the individual workers but also for the State through higher tax rates. Economists have long warned that war is not a driving force behind the building of capital but the greatest destroyers of capital. This fallacy has been used for decades following the great depression and the ending of World War 2 and again when used to explain lower unemployment numbers during the Bush years in office. 

This piece by Jeffrey Tucker in 2004 puts into detail the War Boom Fallacy.

"FEE.org caught this revealing piece from the Washington Post: “Across America, War means Jobs”

 In this corner of a critical presidential-election battleground state, the economy is surging with the urgency of a boom. But it wasn’t President Bush’s tax cuts, Federal Reserve interest rate policies or even a general economic turnaround that did the trick. It was war.
In the first three months of this year, defense work accounted for nearly 16 percent of the nation’s economic growth, according to the Commerce Department. Military spending leaped 15.1 percent to an annualized rate of $537.4 billion, up from $463.3 billion in the comparable period of 2003, when Bush declared major combat operations in Iraq over. …
It is impossible to know how many of the 708,000 jobs created in the past three months are defense-related, since the Labor Department does not track defense contractor employment. But anecdotal evidence suggests the contribution is significant….
In inflation-adjusted terms, the war’s cost will surpass the United States’ $199 billion share of World War I sometime next year. Coming on top of three major tax cuts, that spending will drive the federal budget deficit to more than $400 billion this year. That borrowing will eventually have to be repaid in higher taxes or reduced government services and benefits.
Economists have long argued that war is an inefficient use of government revenue. A dollar spent on a highway not only employs workers but also creates a lasting, broadly shared benefit for the economy. A dollar spent on military equipment is soon lost to enemy attack or the rapid wear of war. If it bought a bomb or bullet, it simply explodes.The families of thousands of National Guard members and reservists have been dealt severe financial blows by the extended deployments of breadwinners…."

The frenetic activity is repeated all over the country. New kilns in California bake ceramic body-armor plates. Apparel plants in Arkansas, Alabama, Florida and Puerto Rico struggle to keep up with uniform orders. Once-idle textile mills in South Carolina spin rugged camouflage fabric. Army depots operate 24/7 to repair and rebuild the wreckage of war in time to ship it back with the next troop deployment.

Many of the younger adults and children are being feed this fallacy and are accepting it without question, aided by Public and Private school curriculum and professed by Economists of the Keynesian School like Paul Krugman. Krugman uses this fallacy without delay in defense of war time spending and stimulus spending by government. He goes even so far as to joke (at least that is what I hope he was doing) that to aid in a recovery from the slump driven by the ever long Iraq and Afghanistan Wars, a housing market collapse and a tanking Wall Street,an Alien Invasion, even if false, would jump start the machines of war and the country and it's economy would be saved.

In Mid 2011 Krugman was a guest on CNN's  "Fareed Zakaria GPS"

"If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months," he said. "And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better--"
"We need Orson Welles, is what you're saying," Rogoff cut in.
"There was a 'Twilight Zone' episode like this in which scientists fake an alien threat in order to achieve world peace," Krugman said. "Well, this time, we don't need it, we need it in order to get some fiscal stimulus."

 Krugman and the Keynesian School Economists who favor this fallacy fail to recognize the fact that as War Produced goods are built and destroyed products built outside of this false demand are what are wanted by consumers rather than required for war time measures. The theory is as if to say that to stimulate an economy citizens should burn their clothes once a year and replace them, this of course would lead to a rise in demand for clothes but at the expense of savings for other wants and needs, this false demand being used as an example would be fit if not for the thousands of other markets that would be wanting this policy in place to support a false demand for their products, we would see the annihilation of virtually every good in the name of economic steadiness and security. Carpenters not doing well, burn the houses and stores. Auto Industry sluggish, force people to crush their cars once every few years.So on and so on until every good becomes disposable by mandate and is done so to fabricate and support an economic lie.

The War Boom Fallacy or known better as the Broken Window Fallacy brought to us by Frederic Bastiat (The Law) and reaffirmed by Henry Hazlitt (Economics In One Lesson) is a leading factor in the US economy due to it's military budgets and affairs around the world. This act of destruction of goods to strengthen an economy is ridiculous in theory and practice yet is still the most taught fallacy to students through public education. I say to these students and teachers alike, burn your books, your clothes, your beds and backpacks, smash your computers, TVs, your cell phones, in the name of a fallacy you hold to be true, destroy your goods and wait for the stimulus and economic boom to kick you in the rear.

A great paper on the numbers and stats of the "General Discussion of Pre and Post WW2 economics" can be found here. Authored by David R. Henderson this working paper lays out the numbers of the myth and dispels false impulses with clear understanding.

Also look into the Great Myths of the Great Depression by Lawrence Reed, found here, these two essays can be the starting point to your own understanding of the Broken Window fallacy redressed as a War Boom Fallacy.

What are you paying for?

The raging wildfires in California brought up a unique point to my wife and she asked me to expound on it here.

When the people of this nation are extorted for billions of their hard earned dollars every year, when they are forced to pay the privilege of subservience, there is some level of belief that the funds they are paying in are going to be used for somewhat basic needs and variable necessities. But what if it doesn't? What happens when everything you thought you were funding is actually a farce? What is to be made of the fact that even for that belief in the priorities of the government your money is not being used in the ways it is advertised to you? What happens when a person is further hurt by the inefficiencies of government and their misuse of money?

Taking the recent wildfires raging in California as an example. The people whose homes are on the edge of destruction are probably expecting some sort of government intervention based on the money they have been forced to pay for services currently held in monopoly by the state and local government. But what is happening? The fire departments are deciding which homes to save and which ones to overlook. So who decides on the triage status of these properties? Who gets to decide if a home is to be saved or allowed to be destroyed? How should those people who have paid for a protectionist service such as a fire department be compensated for the inability of the department to provide the service they are intended for? What recourse do those that have now paid for services, and not received appropriate actions from these mandatory services, really have?

The same can be said of police departments and their "services". If a man is injured or killed and has paid for these protectionary  government agencies, what now happens to reclaim losses or injuries? The agency has obviously not performed a duty right? The police slogan being to protect and serve, the first mentioned duty as protectors has not been provided. In the instance of a man being robbed, the police are in most cases called after the act has taken place, these crimes go mostly unsolved as clues can not or will not (willfully) not be found. A great deal of what police officers do are what is known as reactionary measures. This means that police by and large do not stop crime from happening but merely respond after a crime has been committed. They try to recreate a scene and to collect information to further an investigation of the matter. This leaves people to still be victims and no recourse for the inability of police to "stop" crime from happening. Now this problem could be solved by the hiring of a private security force, to dispel any threats against the life and property of a contracted client. Mostly wealthy individuals choose this route as their preferred choice, knowing that in the instant a threat is made their personal protection agency and its enforcers are there to act. So what happens if a private security firm fails in their actions. The contract, if written to include clauses, could provide all recourse measures, including recuperation of monetary losses.  


It is a failure of government that highlights the free market alternative for fire and police services. In a world where people are free to choose their own protection and not be forced to submit authority or be extorted for money to fund mandatory services, a market of competing and cooperating companies is possible. Think of a service that includes the service of fire suppression and prevention for a fee, by contract and with means to collect losses if they occur. Think of a service that allowed person to hire security forces for themselves and to also collect looses on the occasion of breach of contracts or failure to provide adequate services to the contract holder. This is not so out of the ordinary or far fetched, it is simply a new way to look at the choices, preferences and right of association and contracts of free people and free markets. All the services currently held in monopoly by government can be provided in a market without the use of force or coercion.

Top Ten Capitalist Arguments – Explained

I found this rather interesting post on Reddit which sent me to this Liberty.me users profile. Ethan Glover gives an excellent rebuttal to this video trying to give a false impression of Capitalism.

It is not often that I respond to these things of such low quality as the video below. I vowed a long time ago that I am done with anarcho-communists. I do not debate them, and I do not talk to them. After many attempts of communicating with them, with 100% accuracy I was exposed to the most vile of creatures totally unable to act like adults, or even like human beings. I don’t like to generalize entire groups. I was sent a message by an anarcho-communist with some very helpful and enlightening information that gave me a better understanding of their philosophy once. Will Moyer, a leftist, wrote a brilliantly put together article that I responded to in “The Limits of Will Moyer“. But any efforts I have made to talk to them directly have resulted in the most pathetic and lowest of treatments.

The reason I so thoroughly enjoyed Will Moyer’s article is because, unlike the video below, it was not full of SCE (sarcasm, cynicism, exaggeration). His article made his points directly and he proved that he had an understanding of “right libertarianism,” or synonymously, and more accurately to me, anarcho-capitalism. He did not mince words and was not afraid to go against libertarianism, but at the same time he did not treat his writing as a BuzzFeed Top 10 list. It was meant to be of high quality, and it was meant to be taken seriously.

The video below was made for attention and makes no attempt to understand capitalism, but rather it only illustrates a reconfirmation of biases. I respond to it only at request, and grudgingly so. If the video creator wanted to be taken seriously he would have sucked it up, cut out the childish SCE and utilized a little CHI (curiosity, humor, impudence). Or to put it in other words, there’s no problem with disagreeing and rejecting the arguments of others, but if you don’t want to be torn apart, try to have some fun and create a real discussion. This video, in its despicably low BuzzFeed sarcastic style, does not deserve a bit of respect. I’d be willing to point out the positives in all other cases as I did with Moyer, but this will simply be the crumpling and throwing away of an undeserving piece of junk.

A note on how to read this article: This is not a thorough break down of anything in particular. Rather, it is merely a response to a poorly put together, quick list of arguments against capitalism (which are actually arguments against socialism). For the best way to follow this article, watch the video one item at a time, and then read the appropriate response. For example, watch #10 from the video, then read #10 in the article. #9 from the video, then #9 in the article and so on.

10. Capitalism promotes innovation

Many people do indeed fall into taking easy jobs and not looking for upward mobility. Of course, the socialist answer is usually to force everybody into a single system of being equally poor. Not everyone is capable of being innovative, and not everyone wants to sit around playing the guitar all day. Most people take normal jobs that require simple work and live their life outside of work. Work does not have to be some amazing thing that we love to do, there are always going to be shitty jobs out there to be done. What we can do is allow adults to make their own decisions, and run their own lives. You simply cannot force everyone to be an artist. If everyone were innovative, there would be no such thing as innovative.

Not only that, but the source that the video uses to show that only 13% of people are disengaged at work is a worldwide poll. The four highest countries for most engaged are the United States (mixed-economy, partially capitalist), Canada (mixed-economy, partially capitalist), Australia (market economy, third freest economy in the world), and New Zealand (market economy, fourth freest economy in the world). The most disengaged? East Asia (which with the exception of newly capitalist systems such as China and Hong Kong, most countries in East Asia have socialist command economies), Sub-Saharan Africa (a highly underdeveloped region with a long history of socialism and communism), and South Asia (a highly liberalized area, it’s fastest growing nation, Sri Lanka recently took on some capitalist policies). [Source]

As for the source on people not responding to financial incentive? Massively taken out of context. First, the study found that when it comes to mechanical skills, people respond to financial incentives, and when it comes to cognitive skills people respond to different kinds of incentives, but we’ll get back to that. The economic law that says people respond to incentives is still true. If you don’t pay a programmer enough, he’ll quit for a higher paying job. However, once the pay is good enough, he’ll start to look for other incentives like the ability to be autonomous and creative. What does this mean? High value employees are capable of demanding more, and do so. This is something we have found through capitalism. It is the still generally free market in the software world that has recognized this. This is why you see such incredible innovation in the workplace in places like Google and Amazon. This has been known for a long time, this research is only repeating what has already been discovered in, and put into practice in the free market.

Within the highly capitalist software industry, this is also where you see things like Apache, Linux, and Wikipedia. Large open source projects that are dependent upon free labor and donations. The “open-source way” does call for people to lead projects, but it also welcomes free labor. Open source has become one of the best ways for young people to gain experience and work with big projects. This is why they’re so popular. It provides an opening, and the people who are at the top, leading the project and running the show? They’re being paid. Of course, they’re being paid. It’d be silly to think that wasn’t the case. Open-source is a huge industry. All of this is a part of the free market. Being free of charge has nothing to do with socialism. This entire video is an idiotic misunderstanding of a simple word that can be looked up in the dictionary in about two seconds. Socialism means collective ownership. Guess what? The Wikimedia Foundation, The Apache Software Foundation, and Linux distributions such as Fedora? All owned and operated by full time employees.

Queue the canned rants about “global inequality” and how it’s not fair that everyone doesn’t have the same piece of the imaginary pie. First of all, wealth is not distributed, it is created. It is the socialist nations who end up poor. It is not the fault of capitalist nations that that is the case. It is the fault of the governments for holding people back and not allowing them to adapt to the world and build better lives for themselves. Second, you don’t need to be rich to innovate, the greatest innovators throughout the world come from humble and poor means. It is their striving to build something that pushes them into innovating in the first place. Does this mean it is capitalism itself that promoted that innovation? Sort of, on a general scale. But take it down to the individual scale as the video has, and it’s more because those innovators wanted to get rich and share their ideas.

Then there’s the idea, that’s repeated many times throughout the video that “capitalist education” destroys creative thinking and critical thought. Of course, the video is ignorantly referring to public schools, the exact thing it had just called for by saying that we are more than capable of providing education for everyone.

9. Free markets increase economic development

Immediately after saying the word “free market”, the video starts talking about the IMF, World Bank, and Free Trade Organization. These are not free market organizations, and it must be said that it is impossible to force free market on anyone. At that point, it is by definition, not free, nor capitalism. People must be able to trade among themselves freely in order for there to be a free market. You’d think that’d be obvious, right? It then suggests that protectionist policies such as anti-trust laws and banking bailouts are good for economies, and all the evidence that shows that protectionist policies are only to protect special interests (shocker!) don’t matter.

On the internet being a major innovation, let’s consider first where innovation on the internet has come from. To the government, the internet was nothing but a tool for the military, they had no idea of its power. It was only until the private sector started building on it that it became what we know of today. The internet that the video refers to is pure private sector. Not only that, but just because entrepreneurs use roads to drive to work, that does not mean the government is responsible for their innovations. In the absence of government, roads will still exist, just cheaper and more efficient. If the government never created the “internet”, it still would’ve been created, probably by the same private sector contractors. The internet and GPS, today, are old technologies that are only useful to the average person because of innovative entrepreneurs in the free market.

8. Markets are a rational means of organizing economic life.

The fact that the U.S. wastes so much food is a sign of prosperity (obviously). That prosperity comes from better technology and a (relatively) free market. The starving nations around the world (which are mostly under socialism and dictatorships) lack the agricultural technology that countries like the U.S. do. Even still, countries like the U.S. continue to send them food and care, causing their populations to rise disproportionally to their technology. This only makes things worse than they are. Socialist programs of just giving things away with no consideration as to the consequences and potential alternatives (such as abandoning intellectual property and business regulations that may allow companies to help these countries) are what cause the mass poverty in poor nations.

The New Deal (mentioned in one of the videos sources), by the way, destroyed the economy and it was only after Roosevelt’s death and the removal of his policies that the economy recovered from it and World War II.

As for planned obstination, this is primarily caused by inflation, which is caused by central banking. As the dollar loses value, people have less to spend, so they demand cheaper products. Companies respond to this demand by making… cheaper products. In order to do this, they must use lower quality material. This is as opposed to the post world war two era in which socialist public works programs were being dismantled and the pent up economy went through a major boom. This was an era in which cars, clothes and appliances were made to be very sturdy and long lasting. Today, people simply cannot afford such things and must choose lower quality products.

These cheaper products do not generate more profits, because they are lower priced products for lower priced material. Without planned obstination, there would be higher priced products with higher priced materials that would be more durable, and would not be replaced nearly as much.

When Keynes said that technology would lead to 15 hour workweeks he ignores the entire purpose of technology. Technology allows us to advance society. As technology rises, we create different kinds of technological jobs. The purpose of technology is not to create an imaginary, impossible Peter Joseph world. It is to raise the standard of living and to solve problems. Robots have replaced menial factory line jobs and have allowed more people to take on more challenging jobs in robotics and electronics. This is a positive that the video was complaining doesn’t exist from the very beginning. You don’t create more challenging jobs by playing the guitar for no pay, you do it by innovating in the free market to meet customer demand.

The videos source, which complains about people working longer hours, makes no mention of things like inflation and high tax rates. The countries mentioned such as the United States, Canada and Japan all have some of the highest individual tax rates in the world. As always, the socialist answer is just to pass regulation to shorten the workweek, which inevitably leads to mass poverty because no one can afford to live and afford all the socialist publics works programs at once. As for the article on “bullshit jobs,” it’s just a lot of complaints about necessary jobs and how the author wishes he could spend his life doing nothing productive.

You can work as long as you want, the free market (again) is by definition free. The market isn’t some magical being that doesn’t let you do less work. It is, however, inefficient and bad for the people to hire 100 people to work for half an hour each. To quote the video, “How stupid is that?”

The claim that everyone is working “bullshit jobs” to buy “bullshit products” is.. well.. bullshit. It’s entirely subjective opinion. My smartphone is not a bullshit product, nor is my laptop. I don’t own any bullshit products, because I don’t choose to buy products that I think are bullshit. I think socialist books are bullshit products and a waste of money. But some people don’t, so be it. Nobody “makes me want” anything, that again, is a bullshit argument. If you buy one thing over another, that does not make you superior, that makes you human.

7. We can prevent bad business practices through ethical consumerism.

The very first argument is that the media (state controlled) is advertising products to people and are, therefore, catering to the evil corporations. Advertising, overtime, has become much more subtle, internet marketing is about advertising products to people who already want that product. This has happened because people have begun to ignore advertisements, this is why adless mediums such as Netflix have become so popular over things like cable.

Yes, vegging out on the couch and watching TV is bad for you, but will it program you to go out and buy stuff? No. In the end, it is the individuals choice and responsibility to do so. Everyone, including the commentator of this video, has found a great product that they like (and is, therefore, subjectively not bullshit) through advertising. Advertising is not only a great way to drive down costs of certain things like YouTube (ads are the reason it’s free) but it’s a great way for us to discover new products that we might enjoy. A personal lack of self-control is no reason to vilify the entire thing. That’s like saying Mountain Dew should be illegal because I enjoy it too damned much.

But, the point of saying advertising is bad is because companies won’t advertise their own bad practices. Yes… that’s an actual claim. At no point have I ever heard a capitalist claim that companies should self-police. What I have heard is that the market is capable of self-policing. This means that there is no need for government intervention. Especially when there are things like Consumer Reports and the thousands of systems for product review out there such as with Amazon and eBay.

Just because single products bring multiple products together, it doesn’t mean a thing. Individual products and companies speak for themselves. What the video is referencing (but coyly doesn’t mention) is the “business practices” of companies in foreign socialist nations in which workers are treated like cattle, thanks to bad economies and regulations created by their governments.

At the end of this rant, the video says you can only vote with your money if you actually have any money. This shows a total misunderstanding of what voting with your wallet means. First of all, politics currently control and dictate most business products, especially things like food. Businesses can not cater to their customer because they are either held back by protectionist regulation or must use protectionist regulation to get ahead. Voting with your wallet has nothing to do with moving companies actions by yourself, it’s about making your own decisions. Yes, this gets increasingly harder as countries become more socialist, that does not negate the purpose.

6. Government regulations address the question of bad practices.

No. They don’t. They create them. This is not capitalism, it’s got nothing to do with it. What the video complains about is actually socialism.

Capitalism: The possession of capital or wealth; an economic system in which private capital or wealth is used in the production or distribution of goods and prices are determined mainly in a free market; the dominance of private owners of capital and of production for profit.

Socialism: A theory or system of social organization based on state or collective ownership and regulation of the means of production, distribution, and exchange for the common benefit of all members of society; advocacy or practice of such a system, esp. as a political movement.

The enforcement of collective ownership and social organization is government. The government, through socialism, chooses certain companies over others by creating protectionist regulations.

“Worker control” already exists due to government regulation, they’re called unions, and they only make things worse by deluding supply and demand.

5. Don’t you buy things from corporations? Doesn’t that make you a hypocrite?

No.

4. Capitalists put risk into their businesses.

It was challenging for Nazi’s to take power, and because it’s challenging to start a business, then it’s wrong? Wait, what if it’s challenging to build a socialist system that doesn’t collapse in five years? Does that make it wrong? This has nothing to do with challenge, it’s about the fact that when someone puts blood and sweat into building something, you can’t come along and claim that it somehow equally belongs to everyone on earth.

People voluntarily build businesses, other people voluntarily work for those businesses. In the same way that this video creator thinks you’re stupid for buying a smartphone instead of socialist literature, he thinks you’re stupid for working for a private company rather than working for the government or a cooperative. It is actively saying that you are too dumb to manage your own life and instead, your life should be run by a British teenager on the internet.

Socialists want to exercise their power over others by destroying systems that everyone explicitly agrees to and is perfectly happy with. Thankfully, they’re unwilling to take the risks of gaining actual support and tend to enact what they want through groups like the democratic party in the hopes that one day, the government will put a gun to your head and tell you that you own nothing, no matter what your personal beliefs are.

3. Living standards improve overall, even for the poor.

Living standards improved under Nazism and Fascism, therefore, it’s not a good thing that living standards improve under capitalism. Again, the video is going immediately towards the Nazi’s and saying, “Look, they did it!” If the video claimed that socialism improves living standards for the poor (as it does temporarily) I could claim the same thing. What’s more important is that capitalism and free trade permanently raise living standards and does not lead to mass famine and poverty as socialism and Keynesianism does.

Argentina has always had economic troubles and experienced the usual boom bust cycles that any Keynesian economy does. There’s nothing wrong with worker cooperatives and are perfectly welcome under capitalism. If they work, if they can meet customer demand, then they are totally OK. I would love to see more attempts at cooperatives, but only if they compete on the free market where people can decide which is best. It is important to mention that there are both pros and cons of co-ops. It is also important to remember that the customer is more important than the employee. This does not mean it’s OK to commit criminal actions against employees, but to say that working is a personal decision that is about serving others for the sake of future personal benefit.

2. Capitalism is the result of human nature.

First of all, capitalism has existed for at least 150,000 years. Second, of course it came after humans, humans created trade. Capitalism being a result of human nature has nothing to do with genetics as the video author very well knows. It’s about the fact that trade is a part of communication. It’s what allows us to build societies. The division of labor is the entire reason modern society exists.

Communicating with others and having friends has nothing to do with communism.

Communism: A theory that advocates the abolition of private ownership, all property being vested in the community, and the organization of labor for the common benefit of all members; a system of social organization in which this theory is put into practice.

The video is trying to suggest that capitalism means you can’t live with friends, have relationships or communicate. However, it is in communism that it becomes impossible to solve disputes because there is no recognition of ownership. Such a society quickly devolves into a primitive state.

Capitalism does not force you to charge your friends to help you to move. This, as the video creator and everyone on earth knows, is a ridiculous thing to say to begin with. Capitalism thrives on, and asks for cooperation, it is built on cooperation. Competition is not the opposite of cooperation, nor is it the only foundation of capitalism. And yes, competition is natural, if it weren’t, sports wouldn’t have been around for well over 4,000 years.

And then we get back to how public schools are capitalist schools. Over and over, this video talks about socialism and calls it capitalism. The public education system (which this video creator should adore) teaches an over exaggerated idea of “sharing is caring”. They do not teach fundamental reasoning, negotiation and critical thinking skills. If we had a capitalist education system, there surely would be plenty of schools that did just that, but alas, we have a socialist one.

1. Capitalism is the only system that’s possible.

No one is saying this. In fact, it is very rare to see capitalism today. It certainly does not exist in the US or UK. But the video doesn’t talk about that and the historical effects of socialism. Instead, it queues the pictures that are purely a result of the tragedy of the commons and the lack of private property. When all land is unowned, people have no incentive to take care of it.

It’s been proven time and again that the environment is not headed for collapse, and when the economy collapses it is often due to Keynesian practices and central banking which creates ridiculous and unnecessary boom/bust cycles.

The only need for social change is the need to get rid of government to allow people to act like adults and make their own decisions instead of bending to these ridiculous “common good” arguments that have never had a lick of actual reasoning behind them. (Mostly because there is no such thing as a common good, it’s an impossible concept.)

The only way you’re ever going to convince everyone that all companies should be cooperatives is to force it on them by regulation. The fact is that structured companies, which are responsive to the customer, not some bratty socialist employees, will always out compete them and the customers will always choose them as superior businesses.

As for anarcho-syndicalism in the Spanish Civil War, this system was indeed forced on those peaceful non-criminals who did not want it. The punishment for using money was death. There is no possible way to force a particular kind of anarchy without the use of coercion, in which case, it is inevitably a state. Of course, this is only in the few areas that anarchy was established. In the grander sense, the Spanish Civil War was fought between Nazi and Italian Fascist supporter Dictator Francisco Franco against the Soviet Union.

I get that anarchy makes places better than they are, I’m sure those parts of Spain under anarchy were in a better position than being under a long series of dictators who were constantly at war for the entirety of Spain’s history. Is this really the best case for “left libertarianism?” If so, it’s got nothing to stand on.

Conclusions

In reality, this video gives no real arguments against capitalism and why it is criminal. There are a lot of arguments against socialism and the usual whining of, “Why isn’t everyone as economically ignorant as me? I’ll make them that way!”, but nothing with any real content.

When the video says not to use, “rehashed, terrible phrases that mean nothing [that] are often completely inconsistent with reality” it ignores the fact that the video uses a stereotypically wrong view of capitalism pushed by socialist government and it ignores the realities of economics, something socialists like this have never been able to get straight in their entire history.

Bastiat On Economic Protectionism

A PETITION From the Manufacturers of Candles, Tapers, Lanterns, sticks, Street Lamps, Snuffers, and Extinguishers, and from Producers of Tallow, Oil, Resin, Alcohol, and Generally of Everything Connected with Lighting.

To the Honourable Members of the Chamber of Deputies.

Open letter to the French Parliament, originally published in 1845 (Note of the Web Publisher)

Gentlemen:

You are on the right track. You reject abstract theories and have little regard for abundance and low prices. You concern yourselves mainly with the fate of the producer. You wish to free him from foreign competition, that is, to reserve the domestic market for domestic industry.
We come to offer you a wonderful opportunity for your — what shall we call it? Your theory? No, nothing is more deceptive than theory. Your doctrine? Your system? Your principle? But you dislike doctrines, you have a horror of systems, as for principles, you deny that there are any in political economy; therefore we shall call it your practice — your practice without theory and without principle.
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us ^[1].
We ask you to be so good as to pass a law requiring the closing of all windows, dormers, skylights, inside and outside shutters, curtains, casements, bull's-eyes, deadlights, and blinds — in short, all openings, holes, chinks, and fissures through which the light of the sun is wont to enter houses, to the detriment of the fair industries with which, we are proud to say, we have endowed the country, a country that cannot, without betraying ingratitude, abandon us today to so unequal a combat.
Be good enough, honourable deputies, to take our request seriously, and do not reject it without at least hearing the reasons that we have to advance in its support.
First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?
If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.
If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.
Our moors will be covered with resinous trees. Numerous swarms of bees will gather from our mountains the perfumed treasures that today waste their fragrance, like the flowers from which they emanate. Thus, there is not one branch of agriculture that would not undergo a great expansion.
The same holds true of shipping. Thousands of vessels will engage in whaling, and in a short time we shall have a fleet capable of upholding the honour of France and of gratifying the patriotic aspirations of the undersigned petitioners, chandlers, etc.
But what shall we say of the specialities of Parisian manufacture? Henceforth you will behold gilding, bronze, and crystal in candlesticks, in lamps, in chandeliers, in candelabra sparkling in spacious emporia compared with which those of today are but stalls.
There is no needy resin-collector on the heights of his sand dunes, no poor miner in the depths of his black pit, who will not receive higher wages and enjoy increased prosperity.
It needs but a little reflection, gentlemen, to be convinced that there is perhaps not one Frenchman, from the wealthy stockholder of the Anzin Company to the humblest vendor of matches, whose condition would not be improved by the success of our petition.
We anticipate your objections, gentlemen; but there is not a single one of them that you have not picked up from the musty old books of the advocates of free trade. We defy you to utter a word against us that will not instantly rebound against yourselves and the principle behind all your policy.
Will you tell us that, though we may gain by this protection, France will not gain at all, because the consumer will bear the expense?
We have our answer ready:
You no longer have the right to invoke the interests of the consumer. You have sacrificed him whenever you have found his interests opposed to those of the producer. You have done so in order to encourage industry and to increase employment. For the same reason you ought to do so this time too.
Indeed, you yourselves have anticipated this objection. When told that the consumer has a stake in the free entry of iron, coal, sesame, wheat, and textiles, ``Yes,'' you reply, ``but the producer has a stake in their exclusion.'' Very well, surely if consumers have a stake in the admission of natural light, producers have a stake in its interdiction.
``But,'' you may still say, ``the producer and the consumer are one and the same person. If the manufacturer profits by protection, he will make the farmer prosperous. Contrariwise, if agriculture is prosperous, it will open markets for manufactured goods.'' Very well, If you grant us a monopoly over the production of lighting during the day, first of all we shall buy large amounts of tallow, charcoal, oil, resin, wax, alcohol, silver, iron, bronze, and crystal, to supply our industry; and, moreover, we and our numerous suppliers, having become rich, will consume a great deal and spread prosperity into all areas of domestic industry.
Will you say that the light of the sun is a gratuitous gift of Nature, and that to reject such gifts would be to reject wealth itself under the pretext of encouraging the means of acquiring it?
But if you take this position, you strike a mortal blow at your own policy; remember that up to now you have always excluded foreign goods because and in proportion as they approximate gratuitous gifts. You have onlyhalf as good a reason for complying with the demands of other monopolists as you have for granting our petition, which is in complete accord with your established policy; and to reject our demands precisely because they are better founded than anyone else's would be tantamount to accepting the equation: + x + = -; in other words, it would be to heap absurdity upon absurdity.
Labour and Nature collaborate in varying proportions, depending upon the country and the climate, in the production of a commodity. The part that Nature contributes is always free of charge; it is the part contributed by human labour that constitutes value and is paid for.
If an orange from Lisbon sells for half the price of an orange from Paris, it is because the natural heat of the sun, which is, of course, free of charge, does for the former what the latter owes to artificial heating, which necessarily has to be paid for in the market.
Thus, when an orange reaches us from Portugal, one can say that it is given to us half free of charge, or, in other words, at half price as compared with those from Paris.
Now, it is precisely on the basis of its being semigratuitous (pardon the word) that you maintain it should be barred. You ask: ``How can French labour withstand the competition of foreign labour when the former has to do all the work, whereas the latter has to do only half, the sun taking care of the rest?'' But if the fact that a product is half free of charge leads you to exclude it from competition, how can its being totally free of charge induce you to admit it into competition? Either you are not consistent, or you should, after excluding what is half free of charge as harmful to our domestic industry, exclude what is totally gratuitous with all the more reason and with twice the zeal.
To take another example: When a product — coal, iron, wheat, or textiles — comes to us from abroad, and when we can acquire it for less labour than if we produced it ourselves, the difference is a gratuitous gift that is conferred up on us. The size of this gift is proportionate to the extent of this difference. It is a quarter, a half, or three-quarters of the value of the product if the foreigner asks of us only three-quarters, one-half, or one-quarter as high a price. It is as complete as it can be when the donor, like the sun in providing us with light, asks nothing from us. The question, and we pose it formally, is whether what you desire for France is the benefit of consumption free of charge or the alleged advantages of onerous production. Make your choice, but be logical; for as long as you ban, as you do, foreign coal, iron, wheat, and textiles, in proportion as their price approaches zero, how inconsistent it would be to admit the light of the sun, whose price is zero all day long!

Frédéric Bastiat (1801-1850), Sophismes économiques, 1845

Governor Rick Scott and Half the Truth

Governor Rick Scott of Florida released this statement via email earlier today.

 

Breaking News From Governor

Good Morning from Orlando!

It’s official - Florida’s unemployment rate dropped from 6.7 percent in October to 6.4 percent in November.

We haven’t experienced an unemployment rate this low in over five years (July 2008).

At 6.4 percent, we’re well below America’s 7 percent unemployment rate, and we added 6,000 new private sector jobs.

We’ve cut taxes, made government more effective and provided for a brighter future for Florida families. The result: an opportunity economy that created more than 446,000 private sector jobs since December 2010.

To learn more about Florida's incredible turnaround story, click HERE.

Today’s news is great, but we’re not finished. We’re proposing to cut your automobile taxes and fees by $401 million in our next budget. In 2009 those fees were raised, and we’re going to undo that 54 percent increase.

As we continue into the holiday season, Ann and I wish you and your family a healthy and prosperous 2014.

Rick Scott

Governor

 

While this is a great piece of campaign material it of course has its half-truths and full lies. Lets take a look.

1.       Florida’s unemployment rate dropped from 6.7 percent in October to 6.4 percent in November.

Historically employments rates rise beginning in the end of the month of October and will continue until the beginning of January. This sleight of hand trickery is used in almost every political advertisement in an effort to catch reactions on the state of the economy. This is what I would label as the half- truth. It was not the actions of Rick Scott or his administration that led to this rise in employment, but merely out of necessity of the private sector business owners in response to increased shopping during the holiday months. In these months (Oct-Jan) the semblance of an economic recovery or increase will always attract politicians willing to take that easy half-truth and label it their own handiwork

2.       At 6.4 percent, we’re well below America’s 7 percent unemployment rate, and we added 6,000 new private sector jobs.

This statement has multiple falsities in it. Number one is the assumption, though generally wrong, that the national unemployment numbers are at a much lower rate than what they are in fact. The Federal Government uses a few different ways to fudge these numbers, such as not taking into account people who had completely exhausted all unemployment benefits and have decided not to look for work. This miscalculation can lead to an annual increase of 2% on average. Another way to hide the unemployed is to give them a new status, the new term for 2013? Disabled.  The rate of increase of person applying for disability insurance in the State of Florida has risen somewhat proportionately to the decline in unemployed persons receiving benefits.  

The second folly of this statement is the private sector job creation claim. First and foremost, Government does not in any way, shape, or form, have the ability to create a private sector job. ALL jobs created by any government fall under GOVERNMENT JOBS. This CANNOT be stressed enough.  Government is the antithesis to a free market and its increasing regulation a hindrance on business. The numbers put forth in this letter are also in error; according to the Bureau of Labor Statistics (http://bls.gov/eag/eag.fl.htm) the State of Florida gained 9,395 private sector jobs in November of 2013 which is where Governor Scott’s office would have gotten their numbers. This is a lie on their part, but why? Why would they purposely alter the numbers to show less private sector job growth? One has to look at the other sectors to find this out. In November of 2013 the State of Florida’s Government grew by 1,070 employees, this 1 to 9 rate is about equal to the 5 previous months average increase of newly hired government workers. While Government increases so does the tax required to keep it running.

 

3.       We’re proposing to cut your automobile taxes and fees by $401 million in our next budget.

The truth about this one is that while Rick Scott may be taking the glory for this one it was not his idea at all. In 2013 two bills were presented in the Florida House and Senate

HB 61 - Motor Vehicle License Taxes

Sponsored by: Hill (CO-SPONSORS) Eagle; Hood; Santiago; Stewart

Filed Sept 18th

 

SB 156 - Motor Vehicle License Taxes

Sponsored by: Negron (CO-SPONSORS) Benacquisto; Clemens; Evers; Brandes; Hukill

Filed: Sept 12th

 

Both of these bills were for lowering the auto registration fee and this bill was talked about LAST session by BOTH Negron and Hill. So how convenient coming up on an election year that Rick Scott can now wave this as his idea and watch the GOP panties drop….. Oh but I forgot to mention this is all after the fee was raised under the GOP congress in 2009.

 

Not as truthful or transparent as anyone would like their politicians to be, Rick Scott has led his campaigns and administrations on half-truths and lies. In 2014 there are multiple reasons to make Rick Scott a one term Governor.