Friday, May 17, 2013

Unchecked capitalism

I miss this blog. It really makes me sad how little I've written here lately.

Because most of the people I talk to about politics seem to come from a left-leaning perspective, I tend to think a lot about the morality of markets. On the other hand, I can always count on the Catholic Church to keep things interesting by showing a firm, classical opposition to free markets such as that enunciated recently by Pope Francis. Thus I'm reminded that attacks on market liberalism come from both modern, progressive perspectives as well as classical, conservative ones.

As a side note, the one breath of fresh air I get when talking politics while living in France is that the word "liberalism" hasn't changed meanings as it has in America. Thus, while American "liberals" are actually the left, in France "libéralisme" is more associated with the right, at least with regards to the economy. It makes discussions much more clear, since the word is associated with its content, rather than with a political movement.

One thing that's striking about how both the modern left and classical conservatives respond to markets is how amazingly similar it sounds in terms of ideas. That is, you would expect that these two very different ideological groups would have two very differential ideological reasons for critiquing markets. What I hear is impressively similar: markets turn our attention toward the idols of money and greed, and they create a society that abandons the poor and the ideal of greater equality.

But on a good day, both the left and the Catholic Church might even be drawn to admit no other institution than those of property rights and free trade has done a better job in the history of civilization of raising people out of poverty, creating the innovative solutions that lead to better health and higher living standards. Where did it all go wrong?

One of the things I noticed in the article on Pope Francis was this little phrase:
Unchecked capitalism had created “a new, invisible, and at times virtual, tyranny”, said the former Cardinal Jorge Bergoglio.
No, I'm not talking about the thing the Pope actually said. I'm talking about the phrase there at the beginning of the sentence. "Unchecked capitalism." There it is.

For all the historic connection of capitalism with "laissez faire" and the idea of individuals gone wild doing whatever they want with their own money, the truth is that in principle the market is a very restrictive system. It's really in our nature to do almost the opposite of what the market demands: to demand or forcibly take what we feel we deserve, to respect property rights only when it seems good for the rest of us.

What doesn't get said enough in these discussions is that the modern lords of finance have not driven us all to ruin simply by acting on their own behalf. No, they are publicly designated to act on everyone's behalf. Private individuals who gamble their own money and lose are not bailed out. But bankers who gamble everyone's money are bailed out, because it turns out everyone is depending on them.

A system should not be called a "free" market because we see people acting in a free and unrestrained way. This is simply a mistake in terminology. A truly free market is one in which we are all equally restrained by the same rules. Only within the restraints of mutual respect for property rights can we then be allowed to act freely.

The symptoms that Pope Francis points to are real signs that our culture does have a real problem, and the problem is largely that something has been left unchecked. Properly speaking, however, it isn't capitalism that has been left unchecked. It's a few croneys who vie for the backing of society. Wealth is not inherently bad. Getting or securing your wealth by forcing others to support you is bad.

In short, we need to go after the bankers.

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