Thursday, September 24, 2015

Capitalism for the common good

Pope Francis confuses unneighborly, exploitive secular materialism, the reduction of man to utilitarian/hedonic units, and the spiritual isolation and dysphoria that entails, with the wealth-building and virtual communion of free-market capitalism. CNN reports:

In the chapter on economics, Francis argued that while it can be good for development, capitalism lacks morals and promotes selfish behavior.

“What the Church criticizes is the spirit that capitalism has encouraged, utilizing capital to subject and oppress the man,” Pope Francis wrote in his book, titled “Dialogues between John Paul II and Fidel Castro.” CNNMoney obtained a copy of the book in Columbia University’s library.

He added that capitalism “develops with characteristics of individuality, in a life where men look for their own good and not the common good.”

Baloney. The free market serves the common man’s interests better than any other economic system. The great leaps in the common man’s standard of living were initially pursuits of passion by innovators looking to profit the lives of others. This requires great ingenuity and perception of people’s needs, learned through close, personal interaction, to address shortfalls and uncertainties in the current order’s ministry to economic man. Free-market experiments are selfless in that they commit men’s savings, industry, and genius to aid others in the struggle of life, with remuneration always coming afterwards. The free market ensures the lessons of what people want, communicated by losses and profits, accrue to the entrepreneur.

I’ll paraphrase my 2013 article on envy at Red Pill Report:

Prosperity is sustained by allowing those who acquire property, whether by luck, hard work, or talent, to keep it for reinvestment. The feedback loop between the producer and his market, which signals human wants and desires, dead-ends when government confiscates his property for redistribution. George Gilder writes: “Entrepreneurs must be allowed to retain wealth for the practical reason that only they, collectively, can possibly know where it should go, to whom it should be given.”

Knowledge of his market sets the businessman apart. He knows better how to invest his winnings than anyone else. Government redistribution cannot meet or supersede the value provided by capitalists. Simply put, government lacks the knowledge. By divorcing the capitalist’s wealth from his knowledge, confiscatory taxation destroys wealth.

For example, Jerry Jones bought the Cowboys for $140 million in 1989. Now the Cowboys are worth $4 billion, a 900 percent increase in value after inflation. If Jones left me the Cowboys in his will, they wouldn’t be worth half as much my first day on the job. I don’t know how to run the Cowboys. I don’t have the knowledge to sustain, let alone build, that kind of value. Jerry Jones evidently does. The profits from that venture, then, belong to him, he who knows best how to keep giving what people want, and even what they don’t yet realize they want.

The capitalist might well hoard his wealth and say he’s made enough, and withdraw from the supply side of the economy. That is the retirement attitude, the slow entropy of static savings and triple-A bonds to consumption and inflation. The risk of retirement is not knowing if you’re savings will outlive you, like letting off the gas and not knowing if you’ll make it to the top of a hill. Retirement’s view of current levels of wealth’s sufficiency is a perilous trait for people in the prime of life and society in general, for legacies cannot sustain successive generations. More wealth must be created, or the standard of living will plummet.

Our society is witness to the temptation to live off the past. Slick corporatists beg politicians for fiscal stimulus for favored projects. Established, calcified big business welcomes regulation as a barrier of entry to competitors. Unions legislate demand for their services to guarantee future income. Welfare dependents pass on entry-level jobs to enjoy perpetual holiday and checks in the mail. Gilder writes:

The so-called me generation of egocentric men seek not the productive adventure of enterprise, but the comfort and security of the welfare state, even if disguised in the form of protectionist tariffs, parity systems, or other invisible handouts. ... Even among exceptionally ambitious and committed men, self-love leads not to the giving of oneself and one’s wealth to the realm of chance and fate, shaped by the decisions of others in the market; rather it leads to a quest for power over others, in an effort to impose the fail-safe fantasies of radical politics.

This is true selfishness, seeking the rents of big government, the guarantees of socialism, or its many manifestations, in an inherently tumultuous, unpredictable world; recoiling from the risks and dangers of using your gifts to minister to others in the marketplace. Socialism l isolates economic man from the real ways he can improve his neighbors’ lot. Socialism, not capitalism, causes men to overlook each other and to look after number one instead, seeking security in a piece of the economic pie, shrinking for the lack of mutual beneficence in society.

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