The Free Market As Utopia

January 8, 2009

[First published March 22, 2006] As a freedomist, I often despair of intellectuals ever seeing the free market as it really is. First, the name for it that has stuck like glue is “capitalism,” which immediately shunts perspective onto the track of wealth, huge corporations, capital formation, and such. In this view, the utopian nature and idealism of the free market is lost.

Moreover, through socialist polemics and constant mindless repetition, capitalism is portrayed as the incarnation of greed. You know how this goes. Entrepreneurs and business people are only out to make a profit, and economic competition as nothing more than capitalists climbing over each other to profit from the poor. This is viewed as he antithesis of economic system wherein each tries to help others and provide for their needs, rather than people trying to get rich at each other’s expense — an outlook that lies at the root of much leftist and socialist thought today. Even many that strongly support a free market, see greed as its driving force. This not only gives ammunition to the enemies of this freedom, but also mischaracterizes it altogether by reference to something that is an aspect of the system and not its central, psychological dynamic.

Imagine a utopia where people are highly motivated to provide services and fulfillment to others, usually total strangers. They see this as being in their own self-interest. Many of these people also spend sixty to seventy hours a week trying to provide such services. Also, imagine — unbelievable as it may seem — that in this utopia some of these people spend their life savings and borrow huge sums of money to discover or provide new things that they believe other people might want. That is, in this society the chief preoccupation of people is to satisfy the wants of others, or to determine how they might do this, and do so with the least expense to those getting the services or goods.

Such an unbelievable other-directed society does seem utopian. But if we could have such a society, would it not be inherently moral? Is this not the dream of many communitarians, philosophers, and theologians — that people spend their time, energy, and resources to provide others with what they need and want?

This utopia does exist. It is the free market.

Lawyers, doctors, teachers, intellectuals, writers, authors, journalists, movie stars, business owners, financiers, stockowners, and all other individuals making up the whole population comprise the free market, as do all large and small businesses. The automobile repair shop, the computer discount house, the Italian restaurant, the Chinese laundry, the small Catholic college, the mom and pop grocery store, and so on and so on, exist to give people a particular service. If this service is unwanted or the business charges too high a price, then it goes bankrupt. Moreover, entrepreneurs are constantly trying to invent new businesses or services that will fill some need or want not yet recognized by others. If no such want exists, or its fulfillment is not worth the cost, the businesses fail. Such working and striving to satisfy others is a moral ideal. Due to near 200 years of socialist misinformation and distortion, that this is the essence of the free market is widely unappreciated.

Of course, profit is involved, but in spite of socialists having turned this into an expletive, the idea is simple – people often do things for the benefits they receive, which may be monetary, but also may be love, prestige, power, and psychic satisfaction. Nothing evil, greedy, or exploitive about this. One can easily describe the “profit motive” of those on the left when they write their anti-capitalist or anti-American polemics, although through their control over the major media and the educational institutions, they have managed to identify capitalism as uniquely driven by a profit motive.

And what is not much taught or much discussed is how we all have immeasurably benefited from a technological revolution that began in the eighteenth and nineteenth centuries, one that was really a revolution in freedom. As government loosened its stranglehold on national economies and foreign trade, as it allowed creative and enterprising people to produce new things, there was a surge in new inventions, new businesses, and the earnings and wages of the poor. Before this revolution, laws tied workers to a farm or manor and forced them to live the most basic and poorest of lives. They often faced the threat of starvation if a harvest was meager, if they lost or broke their tools, or if they were dispossessed of their land by the government or feudal lords. They wore the most basic and plainest of clothes and ate the simplest and cheapest food. The revolution of freedom liberated the poor from this kind of servitude, assured them of a basic wage, and enabled them to improve their consumption. Much to the complaint of the upper classes, which saw this as “putting on airs,” the poor began to dress in better, more colorful clothes, and to eat a greater variety of foods.

Just consider how freedom promotes a continuous reduction of the cost of goods compared to the average wage, such that even the most complex and advanced products are available to the common person. An example of this is the rapid evolution of the handheld calculator.

When I was a graduate student working on my M.A. thesis in 1960, I had to calculate statistics on a large Monroe mechanical desktop calculator. I had to punch the numbers into it, move some switches to do a specific calculation, and physically crank it (like starting an old car) to get the results. By computer standards today, this Monroe was painfully slow and clumsy, but it was still better than doing the arithmetic by hand. I could calculate sums, cross products, and correlations, but it took me about two months and a sore arm to do all the necessary calculations. My university paid about $1,100 for the machine then, or about $6,408 in current money.

By the early 1970s, I could pick up a handheld Hewlett Packard electronic calculator that would do all these calculations and many more, such as logarithms and trigonometric functions, store one figure or calculation in memory, and function on a small battery. It cost about $400, or about $1,709 in today’s dollars.

Now I can get such a handheld calculator for $10; paying slightly more will get me a calculator that will do much more than the obsolete Hewlett Packard. And for about $900 I now can buy a personal computer — for example an iMac with monitor, keyboard, modem, CD drive, and an internal hard disk — that has a capability undreamed of a mere decade ago and on which I could have done all the necessary calculations for my M.A. thesis in seconds, not months. This is comparable to the free market, through innovation and competition, bringing the price of a new automobile in 1960 down to the cost of a new shirt today — which makes one wonder what the price of an automobile now would be without any government regulations on its production and quality.

I did my Ph.D. dissertation on the Northwestern University mainframe, a central IBM computer worth tens of millions of dollars in current money. It had a memory of 36 kilobytes and filled a huge, air-conditioned room with its blinking lights, spinning tapes, massive central processor, very slow printer, batch punch-card input, and bustling attendants. The whole atmosphere of computer, lights, air-conditioned room, and all the rest created a feeling of almost spiritual mystery. To use this monster, I had to learn to write my own computer programs, and to change some of its functions I had to rewire part of the computer. That was in 1962 and 1963.

Today I sit before a flat seventeen-inch color monitor connected to a new Macintosh G5 that has one gigabyte of memory (nearly 28,000 times the memory on the mainframe), a 28.5-gigabyte hard disk, a DVD-rewritable drive, a cable modem, and a color printer. The total cost of all this was about $3,500. Incredible power at an unbelievably low cost compared to what I could have bought only one human generation ago. This is the fruit of people being free to search and think of ways they can satisfy the needs or desires of others, and to invest their time and resources in trying to do so.

Link of Note

”A Shiv in the Back: How politicized college courses mangle education” (10/6/2004) By Bruce Thornton

A review of Ben Shapiro’s Brainwashed: How Universities Indoctrinate America’s Youth.

Among other comments on the leftist nature of the American university, note this:

On issue after issue—tax cuts, liberal media bias, “social justice,” and the general evil of stupid conservatives and Republicans—the University speaks with one mindless voice, repeating clichés and stale progressive ideas with nary a nod to any opposing viewpoint.

This numbing orthodoxy partly results from old-line Marxist received wisdom that, despite being repudiated by history, lives on in the groves of academe like some wood-boring beetle. Despite its success at creating wealth for vast numbers of people, capitalism is condemned for increasing poverty and income inequality. For example, a tenured professor at the University of Texas calls capitalism “‘a system based on exploitation and domination and racism and war — and lots of other things.'” An article assigned in a geography course — yes, geography — at UCLA stated that free-market capitalism “‘do[es] not have a good track record in feeding people, nor in tackling the underlying structures of poverty which consign over one quarter of the world’s population to hunger.'” As compared to what other economic system, one might ask? “Last time I checked,” Shapiro responds, non-market systems “had starved twenty million people in the USSR, thirty million people in China, and millions more throughout the world.” This disconnect between ideological bromides and the simple facts of history, evident in the presumed bastions of critical thinking and factual accuracy, should disturb us all.

Incredible! And The Horror Continues As The Threat Increases

January 8, 2009

[first published March 25, 2006] On the right, North Korea vs. South Korea at night. Also, consistent with this picture, read this from several years ago, which seems to apply today as well:

1. North Korea’s population requires about six million tons of food for each person to have a minimum diet. The regime controls all farming, all agriculture, and can only produce about four million tons. This causes a food shortfall of two million tons, or 33 percent below what is minimally required.

2. Kim has imposed rationing, and his handouts are the only way to legally obtain food. There are no independent channels of distribution, except for the black market. This means that people get food as Kim and his thugs’ desire.

3. Thus, Kim’s food distribution system is highly unequal. Food is put aside first for “patriotic rice” and “military rice.” This has resulted in Kim cutting the consumption of 700g of food a day per person by 22 percent, or to 400g a day, well below the minimum consumption of rice set by the World Food and Agricultural Organization.

4. This is not all. In this “classless” communist society, the regime has divided North Koreans into a rigid hierarchy of three classes, and fifty-one subdivisions, depending on a person’s status within the communist North Korean Workers Party and the military, their perceived faithfulness to communism, and family backgrounds. In other words, Kim uses the very food people need to live as a tool to reward and punish his subject slaves. Thus, vast numbers of people whose loyalties are questioned or may be deemed useless to the regime do not receive enough food to live long. The worst off are those people and families incarcerated in Kim’s concentration or forced labor camps. They receive the lowest food allowance of all, in spite of their being forced to work from 5 am to 8 pm.

5. There are no hospitals, doctors, or medical distribution and supply companies independent of the regime. All are nationalized. As with food, therefore, medical treatment and medicine is distributed as reward and punishment. Not surprisingly, medicine is in short supply and not available everywhere. Thus, the diseases associated with famine and malnutrition often get no medical treatment at all. Even a cold under such conditions can be mortal. And only half of the population is now inoculated for such diseases as infantile paralysis and measles.

6. Attempts on the part of the South Korea, the United Nations, and the United States, the major giver, to provide food aid have not worked well. In 2002 food aid was 62 percent under its target, but even if the target were reached , it would not substantially improve on the food available to the average Korean, because the food is not equally distributed. But it is not. The regime will not guarantee that food reaches those who need it most, it does not allow aid givers to carefully monitor who gets the food, and in some cases, it has redirected the food to its favorite classes or to the military.

7. Aside from the daily accumulation of dead, the effects on the living have been disastrous. Long-term malnutrition has affected about half the living, and caused underdevelopment in children–their growth is stunted and they are excessively thin. There is wide-scale dwarfishness and, most important from any humanitarian point of view, their brain development has been retarded. Moreover, malnutrition has fostered rickets, scurvy, nyctalopia, hepatitis, and tuberculosis, among other diseases. North Korea is one of the few countries in which population mortality rates have been increasing. The life expectancy has fallen to 66.8 years from 73.2; newborn mortality rate has increased from 14 to 22.5; and the rate for those less than five years of age has increased from 27 to 48 per thousand.

And so on.

Now, incredibly, that Stalinist dictator of North Korea, Kim Jong-Il–that warden of the world’s worst border to border, open air concentration camp; that overseer of mass starvation of his slaves while he loads his dinner table with delicacies procured by his chiefs from around the world; that mass murderer; that drug smuggler; that multimillion dollar counterfeiter of American currency; that material supporter of terrorism and supplier of nuclear technology and devices; that possessor of nuclear weapons and the missiles that could reach Hawaii and Alaska– is continuing to work on nuclear warheads for his missiles and on a longer range missile that could reach major American cities.

Were this evil man to appear to succeed with only reasonable credibility, the world would enter a new and most dangerous time. For then, Kim’s credibility about using his nukes would be absolute, and no American president could risk San Francisco or Chicago on the assumption that Kim did not have this capability, or was bluffing. And Kim would no longer be deterred from threatening Japan, South Korea, and the U.S. with his nukes unless we….

No threat that we would turn North Korea into a moonscape could be realistic, for it would be obvious to everyone that we would not risk the loss of several million American lives (along with economic, social and political chaos) that would follow Kim’s inevitable pre-emptive attack on the American homeland.

All political calculations are based on assumptions and a calculation of the risk of being wrong versus the probability of being right. Even if we had intelligence that cast doubt on Kim’s ability to create warheads from his nukes and to develop ICBMs with sufficient accuracy to hit an American city, the horrible human cost of being wrong would have to determine our policies

What to do? Assassinate him, as I have urged (here, and here). Now. There can be no moral inhibition here. He is the world’s most evil and dangerous man. The worst threat to all humanity.

Related links

“NKorea weapons ‘could not hit US'”:

North Korea does not yet have an operational missile that could hit the continental US, a US report says. But its weapons could target South Korea and Japan, and it is working on a longer-range solid-fuel missile.

RJR: Ahh, bad headline. Hawaii and Alaska are part of the U.S.

” North Korea Touts First-Strike Capability”:

North Korea suggested Tuesday it had the ability to launch a pre-emptive attack on the United States, according to the North’s official news agency. A Foreign Ministry spokesman said the North had built atomic weapons to counter the U.S. nuclear threat…. The North’s spokesman said it would be a “wise” step for the United States to cooperate on nuclear issues with North Korea in the same way it does with India.

RJR: Just wait until they APPEAR to have such a capability for the demands Kim will make.

” KOREA: We’d Rather Starve”:

North Korea says it wants to end UN food aid by the end of the year. The UN World Food Program (WFP) has provided 300,000 tons of food to North Korea this year, 90 percent of which has been delivered. South Korea has sent 500,000 tons. That keeps about a third of the population from starving to death (by providing about half a pound of grain or rice per day per person.) Harvests were better in the north this year, but the real reason for getting the WFP out is the hundred or so inspections UN personnel make each week to insure that the food goes to the people who need it. The South Korean food comes with far fewer inspections attached. China has also offered 150,000 tons of food a year, and South Korea has been generous with contributions of fertilizer. The north would rather starve than be scrutinized. These inspections bring too many North Koreans into contact with foreigners, and this leads to more North Koreans finding out about the outside world, and that North Korea is not the workers paradise, and best run country on the planet. North Korea has received some $2 billion in food aid over the last ten years. As a result, the government has not had to buy and import any food. Despite that savings, much of the food donated has been diverted to military use, or for sale in the black market. 

“N.Korean defector says disabled newborns are killed”

“The Great Famine of 2006: A Long, Hungry Winter Sets In; The World’s Last Chance to Prevent It Slips Away”

“Up-to-date news on the food situation in North Korea :

LFNKR still receives stories about starvation like those heard back in 1996 to 1997. In one case, steamed bread was reportedly stuffed with human flesh. In another case, parents exchanged children with another family to eat them.

“Australia bombs impounded N-Korean drug ship”:

Two Australian fighter jets bombed and sank an impounded North Korean cargo ship on Thursday in what Foreign Minister Alexander Downer said was a strong message to Pyongyang about its involvement in drug running.

“Lawmakers prod US on N.Korean refugee act”:

The U.S. government has failed to implement 2004 legislation aimed at promoting human rights in North Korea and giving asylum to refugees from that communist state, senior U.S. legislators said.

RJR: This is a balancing act on the part of Secretary Rice. We are trying to get international control of Kim’s nuclear weapons development, and need China and South Korea in the process, but both side with Kim in opposing our implementing the refugee act.

“U.S. finds a new way to pressure N. Korea”:

Six months after the Bush administration blacklisted a bank in Macao accused of laundering money for the North Korean government, senior administration officials said the action had proved to be far more effective than anyone had dreamed…. In interviews, several present and former administration officials said that the administration had concluded that the six-nation talks intended to persuade North Korea to give up its nuclear arms were unlikely to succeed unless they were accompanied by these direct, punitive actions.

RJR: Finally, but it takes being mugged by reality to do it. This is the sorry history of middle-level State Department officials dealing with thug rulers. But it is an intrinsic problem for democratic officials, who habitually project their democratic norms onto the thugs that rule by the smoking gun.

A novel about two lovers who travel in time back to 1906 to foster the democratic peace and prevent the world wars and mass democide. Free download in pdf.