The Flaw of Capitalism
In a somewhat lengthy but accessible polemic at Forbes, tech strategist Sramana Mitra attempts to make the case that Capitalism is flawed:
The banks, however, are another matter altogether, and this is where I think capitalism has hit a roadblock. The government has intervened to save many of them, and now, these bailed out banks want to hand out billions in bonuses to their non-performing employees. Capitalism gave way to welfare economics, and now the government has to intervene further to limit these looters from behaving badly by imposing taxes and regulations. A whole messy cycle that brings me to the core “bug” in the system that Rand once sold me on, fully and completely.
Too many sacred tenets in Rand’s philosophy stand violated. Integrity, justice, fairness, work-ethic, excellence–all have fallen prey to greed. Rand’s flaw? She assumed integrity is implicit in the characters of the “leaders.” It isn’t. And hence again, most intelligent people are coming to the conclusion that the government must intervene to stop further shameless looting of taxpayer money. Free-market capitalism gets halted, regulation makes sense.
First of all, “free-markets” do not imply there is a lack of fraud regulation. Free individuals can communicate and collectively punish offenders more ruthlessly than a government can. The State remains necessary for the enforcement of contracts between free agents.
The other notion I find fascinating is that we somehow Free Markets invested too much stock in “integrity.” The reality is that the more we rely on The State to regulate, the more we invest in the “integrity” of politicians who are increasingly less accountable.
The dangerous notion, however, is that markets can be destroyed. You can’t destroy a market, you merely shift it. Decisions that are removed from what we consider a traditional free-market and placed in the hands of The State still occur. But all you’ve done is created a Market of Influence, and in the process removed the majority of people from having a say.
The more authority you remove from capital and consumer markets and invest in government, the more powerful the engine for graft and fraud. Concentrated power is far easier to co-opt, purchase and subvert.
“Markets” are not a theory, they are a fact. There will always be markets determining what resources are available and how they are allocated. The difference comes with how much freedom you have as an individual, and how much of a say you have in the outcomes. Doubling-down on a State-run market isn’t an act of “avoiding the flaws of Capitalism,” it’s just a riskier way of abdicating responsibility, and pushing all your chips into the middle for the most powerful to play with.
Maybe Mitra is right, and Capitalism is flawed. But it’s better than the alternatives, and handing control to The State only shifts the activity to the highest of high-rollers.
ObamaCare loses heart
You can read the Bloomberg article for yourself:
Cardiologists Crying Foul Over Obama Medicare Cuts
I want to draw your attention to these excerpts:
Obama and his allies in Congress are pushing to extend coverage to the 46 million Americans without health insurance, at a potential cost of $1 trillion over a decade. The separate Medicare proposal, announced July 1, slashes projected spending for care by cardiologists and oncologists by more than 10 percent each, while paying family doctors 8 percent more and nurses an additional 7 percent.
The cuts would be “impossible” for some small-town cardiologists who rely on Medicare patients, said Zia Roshandel, a heart doctor in Culpeper, Virginia. The town of 10,000 people is about 60 miles southwest of Washington.
Roshandel and two partners see perhaps 50 patients a day at his practice, the local hospital and a community clinic for the indigent, the 40-year-old said in a telephone interview. Medicare accounts for two-thirds of their clientele, he said.
Already squeezed by government and private insurers, Roshandel said he has cut office hours, forgone paychecks and shifted his 12 workers to a high-deductible insurance plan over the past two years. The latest proposal would push him out of private practice altogether, most likely to a hospital in a larger community less reliant on Medicare, he said.
And here’s the rub of single-government-payer. One-size-fits-all is doomed to fail, because there is no universal intelligence or bureaucrat that can properly allocate resources with the same efficiencies as a free market. In this case, the doctor will have to pick up and leave his patients behind, because the system rewards his being part of a larger collective practice in a bigger community.
That also ignores the other conundrum of the healthcare debate: if you do succeed in shifting resources to preventative care, you simply create a larger population of people who will eventually succumb to heart disease and cancer. Unless you decide to ration, restricting access to only the young…
Bald Faced Lies About Markets
Saying that ‘libertarianism is wrong because Free Markets don’t exist’ is like saying ‘fur coats are dumb in cold weather’ because we’ve never seen a Sasquatch.