A Response To A Syndicalist

An Instagram user by the name of Syndicalist Kartoffel  recently made an attempt to criticize capitalism through a multitude of occurrences in which he believes are the result of capitalism, and not greater government regulation and centralized planning. My response to each of his points will be in italics.

This is the argument that was provided: 

1. Worker exploitation that occurs under the capitalist framework.

The exploitation theory is the cornerstone of capitalist criticisms. Put simply, while the worker should receive the full future value of their labor now, the capitalist pays the wage earner less than the future value that is produced by their labor in the present. The issue with this is that future goods are less valuable than present goods, in that people would prefer an $11,000 sum of cash and a four-bedroom home today as opposed to a $15,000 sum and a five-bedroom home fifty years from now. Because of this, the capitalist is truly not exploiting anyone. In fact, he is lessening the hindrance of wait time for income from the worker or workers [1] . Allow an example. Let us imagine a scenario in which there exists no capitalist, and people desire to produce an automobile over a five year period. But, before you can produce an automobile, you must have parts(crankshafts, rings, pistons, etc.)delivered, and the tools to construct the vehicle. The automobile assembly is the final phase of automobile creation, it is not the sole. Further, let us imagine that the automobile will sell for $75,000. Only at the end of the automobile construction could they receive this amount following the actual sell of the vehicle. However, with a multitude of capitalists in the mix, the workers are paid every so often, thus negating the 5 year wait period that they would endure in the capitalist absence [2] . In short, the worker is engaging in a fully informed, voluntary market transaction with the capitalist, whereas in the absence of the capitalist he would be forced to amass capital goods to last him until the end of the production process at which point he could sell his completed product in the market.

2) Long hours for low pay.

In the last two decades, capitalism has lifted more than a billion people worldwide out of poverty, while the share of people in developing countries living on less than $1.25 a day has been cut in half. In China alone, 680 million people have been rescued from poverty, and the extreme-poverty rate has gone from 84 percent in 1980 to less than 10 percent today. In Africa, inflation-adjusted per capita incomes rose by an astonishing 97 percent between 1999 and 2010. Hunger in India shrank by 90 percent after the country replaced 40 years’ worth of socialist policies with capitalist reforms in 1991 [3] . Also, Walmart, McDonald’s and other firms often accused of exploitation by paying employees “slave wages” elected to raise wages in the face of competition, not government force [4] .

3. Unemployment.

Nickell, Nunziata, and Ochel (2005) and Daveri and Tabellini (2000) found that higher labor taxes reduced employment. Quan and Beck (1987) and Nistor (2009) found that areas with greater human capital investment (i.e., education) had lower unemployment rates and greater employment growth [5]. Further, state intervention in the market through artificial price floors and unnecessary regulations that heighten labor costs raises unemployment rates. Economic freedom does not [6]. 

4. Zero-hour contracts.

Zero-hour contracts have their benefits for both employers and employees. For unpredictable scenarios, say an over-packed restaurant on a Monday night, or a desire to meet high customer demands in a hotel with only a few permanent employees, zero-hour contracts are perfect. And, since there is no assurance of hours, this allows great flexibility for people in the absence of being tied to a laborious work schedule [7].    

5. Never-ending class war.

It is actually economic freedom and market globalization that enhance social harmony. It is through business and market competition that people of different faiths, skin colors, and cultures are required to cooperate. People act within their self-interest, and under capitalism, you can significantly increase your acquisition of resources by cooperating with other people [8]. The pervasive class war is exacerbated through the rhetoric of left wing ideologues that focuses on demonizing the “top 1 percent,” ignoring the existence of economic mobility, and dodging numbers on wage growth. For example, of the households that were in the lowest earnings bracket, nearly half had moved up to one of the higher earnings brackets by 2007 [9]. 

6. The existence of mortgage, rent, insurance, bills, taxes, debts, loans.

Mortgaging is incredibly important and actively incorporates swarms of people in benefiting portions of the public. [10] It is rent that provides people of several financial firms, such as Easthall Park, with a means of income [11]. Insurance reduces risk to life or property, it also promotes family stability [12] . In a world with a perfect financial market, financial bills would not exist. Unfortunately, this is not going to be the case for nothing in this world is perfect [13]. Taxes are the means of funding governmental services and programs, taxes are inherent under the government system. Chances are any capitalist would be willing to cut taxes whenever possible, because tax cuts spur economic growth [14]. And furthermore, do you not support fiddling with the tax code to make the rich “pay their fair share?” After all, the 100 richest people in 2012 are said to have held enough wealth to end global extreme poverty four times over [15]. If you’re opposed to even a minimal flat tax, your disgust should be focused at government. 

7. You only get what you can buy.

This is an extraordinary phenomena called living within your means.  Had we had pure capitalism for the last six decades, the median household income would be $330,000, not the current $53,000 [16]. Such an income would definitely increase purchasing power.

8. No right to goods or services you need.

The issue I have with this is not only the lack of an empirical argument to defend this, for regardless of how the means of production are owned under the various economic systems there is no empirical evidence to prove positive rights exist, but also what such a belief implies. You essentially believe in slavery. If you believe in positive rights, in that your rights entitle you to goods and services that people are obligated to provide, then a right to education permits the enslavement of professors and a right to healthcare permits the enslavement of doctors [17] .  

9. Cuts to essential services.

Capitalism has done more for the poor than the government has ever done [18].  Looking at capitalism, the reason why it is such an effective economic system is because of the incentives it provides link together self interest, cooperation, and resource scarcity in such a way that it is the greatest means of poverty alleviation in the history of man [19]. 

10. Cuts to welfare benefits.

Welfare has been nowhere near as productive as those on the Left believe. $21.5 trillion has been invested into the  War on Poverty [20] and its most shining results are a destroyed black community [21] and an unaffected poverty rate [22]. Private charity is less of a hindrance to economic growth than government welfare.

11. Denial of needed benefits.

The mechanisms under capitalism allow everyone to achieve a respectable standard of living with regard to their biological abilities. So, capitalism actually reduces the demand for needed benefits through the improvement of the economic situation of the masses [23].

12. Drugs denied due to cost.

The true reason drugs are denied due to astronomical cost is because of government protected monopoly rights of large business corporations, not private ownership of the means of production [24]. To continue, it is the free market and international free trade that drive down the cost of products through competition [25].

13. Health care cuts due to cost.

For this specific criticism, I would like to take the time to address the economic phenomena referred to as the rationing problem. What this concept states is that a valuable, scarce resource must be rationed by something, whether it be time, price, or some other force. Even universal healthcare cannot escape this principle. Sharon Shamblaw, a Canadian resident, was diagnosed with a form of blood cancer that required a specific form of stem cell treatment, and one of the facilities that could provide her with the treatment she needed had an eight month waiting period. She eventually died at the age of 46 [25]. And she is just one of countless people across the globe who were forced to endure a lengthy wait time under the universal healthcare system and ultimately perished. The demand for healthcare is infinite, the supply of it is finite, and as a result it must be rationed in some form or another, whether by prolonged waiting periods which cost lives or prices which may be deemed high. It is simply a matter of if you desire to pay with a greater risk of your life or a larger cash sum.

14. Anxiety, stress, depression.

Economically freer countries tend to have better living standards, lower infant mortality rates, and longer life expectancies [26]. If there were heightened amounts of anxiety, stress, and depression under the capitalist system, this would not be the case. 

15. Widespread poverty.

Those on the left desire to help the poor while they are poor, those on the right look at the direct cause of poverty and attempt to fix it. It is the infringement upon property rights that creates mass poverty in the first place [27], and low IQ that drives poverty on a smaller scale [28]. If you want to fix poverty, you must provide people with a reliable means to accumulate wealth, and the greatest system in the world at providing wealth to the masses rapidly is capitalism [29]. 

16. Widespread deprivation.

Capitalism inherited widespread deprivation, only to reduce it [30].

17. Evictions, homelessness.

Tom Sowell does a brilliant job of explaining why capitalism is not to blame for this [31]. America’s homeless are suffering from an elaborate compilation of government interference in the market that includes environmental zoning regulations and rent control laws [32].

18. Government prioritizing rich.

Capitalism demands minimal government interference in the economy, not extensive government overreach, which this is a result of [33]. 

19. Environmental destruction

President of Natural Capitalism Solutions and proponent of green development L.Hunter Lovins provides countless cases of economic freedom promoting green business and environmental protection [34]. In addition, pollution is a property rights issue, a stronger definition and enforcement of property rights provides heightened levels of environmental protection [35]. To quote Tom Palmer [36], “Many Western ecologists have argued for years that the causes of pollution are property rights and capitalism. That is an interesting hypothesis, and it is subject to an empirical test. Let us find an economy with no private property and no capitalism. The theory says that there should be no pollution or, at least, less pollution. But in fact, where there are no private property rights or capital markets, pollution is a nightmare. Some places in the Soviet Union have infant mortality rates that are higher than the rate in Burkina Faso, the poorest nation in Africa. Silesia in Poland has one of the highest rates of birth defects in the world.”

20. Burglaries, theft, muggings.

Private ownership of the means of production is not to blame for crime, this is a fallacy of causation. Just because Y (crime) occurs under X (private ownership of the means of production) does not mean X is to blame for Y. Human nature is rather tribalist and rampant with competition, therefore it seems capitalism, which strengthens ties and forces cooperation, would provide a greater motive to pursue peace, as all benefit in doing so. Moreover, there is a correlation between intelligence and crime [37]. 

21. Wars and terrorism.

Yet again, fallacy of causation. Just because Y occurred under X does not mean X caused Y. And further, free markets foster peace, not strife [38].

22. Refugees fleeing conflict, and migration to escape poverty.

People do not flee a country because of poverty alleviation, economic growth, and a higher standard of living. They may flee a country because of political persecution or economic despair, which is integral to the economic system of socialism [39]. People usually tend to flee when there is little food security, such as what is happening in Venezuela where citizens not only broke into a zoo to eat a horse [40], but have also consumed dogs, cats, and birds because of tremendous resource misallocation from socialist policies [41].

23. Racism, nationalism.

Regression analysis of up to 65 countries reveals that economic freedom is positively related to tolerance towards homosexuals, especially in the longer run, while tolerance towards people of a different race and a willingness to teach kids tolerance are not strongly affected by how free markets are. Stable monetary policy and outcomes is the area of economic freedom most consistently associated with greater tolerance, but the quality of the legal system seems to matter as well [42]. 

24. Under socialism, there is access to all goods and services according to needs, far shorter work weeks, and cooperation, not competition.

Socialism did not provide the world with a shorter work week. Nor did laws mandating shorter work weeks. To quote economist Robert Whaples [43], “Historically employers and employees often agreed on very long work weeks because the economy was not very productive (by today’s standards) and people had to work long hours to earn enough money to feed, clothe and house their families. The long-term decline in the length of the workweek, in this view, has primarily been due to increased economic productivity, which has yielded higher wages for workers. Workers responded to this rise in potential income by ‘buying’ more leisure time, as well as by buying more goods and services. In a recent survey, a sizeable majority of economic historians agreed with this view. Over eighty percent accepted the proposition that “the reduction in the length of the workweek in American manufacturing before the Great Depression was primarily due to economic growth and the increased wages it brought.” The same applies to child labor, it was capital accumulation and greater economic productivity that reduced the demand for child labor [44]. As for cooperation, competition demands cooperation, and competition is incredulously advantageous in terms of providing economic growth for the masses. Perhaps this is why my system is the greatest mechanism for poverty alleviation in history and yours is arguably the greatest inducer of it.

Conclusion: Refrain from blaming government mishaps on private enterprise. That is all.

Citations:

[1]

http://www.academia.edu/17150577/AN_ANALYSIS_OF_TIME_PREFERENCE_THEORY_OF_INTEREST_AND_ITS_IMPACT_ON_THE_BUSINESS_ENVIRONMENT

[2]

https://www.amazon.com/Capital-Interest-Eugen-Von-Bohm-Bawerk/dp/8177554751

[3]

http://www.nationalreview.com/article/358771/capitalisms-triumph-michael-tanner

[4]

http://www.unbiasedamerica.com/media/facing-competition-mcdonalds-increases-wages

[5]

https://files.stlouisfed.org/files/htdocs/publications/review/11/01/1-18Garrett.pdf

[6]

http://www.heritage.org/testimony/2013/06/what-is-minimum-wage-its-history-and-effects-on-the-economy

[7]

http://www.capify.co.uk/advantages-disadvantages-zero-hour-contracts/

[8]

https://object.cato.org/pubs/efw/efw2005/efw2005-2.pdf

[9]

http://www.aei.org/publication/thomas-sowell-on-economic-mobility/

[10]

http://www.streetdirectory.com/travel_guide/71011/home_loans/role_of_mortgage__mortgage_broker.html

[11]

http://www.easthallpark.org.uk/rent-main-header/importance-of-rent/

[12]

https://www.linkedin.com/pulse/7-reasons-why-insurance-important-martin-waiguru

[13]

http://treasurytoday.com/2003/06/trade-finance-bills-of-exchange

[14]

http://www.poverty.ac.uk/report-developing-countries-wealth/super-rich-could-end-poverty-four-times-over

[15]

http://www.aei.org/publication/sorry-new-york-times-tax-cuts-sure-do-lead-to-economic-growth/

[16]

http://reason.com/archives/2013/06/21/federal-regulations-have-made-you-75-per

[17]

https://fee.org/articles/the-perils-of-positive-rights/

[18]

http://reason.com/archives/2014/12/17/governing-vs-giving

[19]

http://www.heritage.org/report/why-does-economic-freedom-matter

[20]

http://www.forbes.com/sites/louiswoodhill/2014/03/19/the-war-on-poverty-wasnt-a-failure-it-was-a-catastrophe/

[21]

http://www.nationalcenter.org/P21PR-WarOnPoverty_010814.html

[22]

http://www.heritage.org/poverty-and-inequality/report/the-war-poverty-after-50-years

[23]

http://capitalism.columbia.edu/theory-capitalism

[24]

http://www.intelligencesquaredus.org/debates/blame-big-pharma-out-control-health-care-costs

[25]

http://townhall.com/columnists/justinhaskins/2015/12/17/draft-n2094739

[26]

http://www.heritage.org/international-economies/report/how-economic-freedom-promotes-better-health-care-education-and

[27]

https://www.mercatus.org/system/files/ch2.pdf

[28]

https://www.amazon.com/IQ-Wealth-Nations-Richard-Lynn/dp/027597510X

[29]

http://americanpolicy.org/2012/11/19/private-property-ownership-is-the-only-way-to-eradicate-poverty/

[30]

http://www.forbes.com/sites/objectivist/2013/02/25/capitalism-in-no-way-created-poverty-it-inherited-it/

[31]

https://www.amazon.com/Basic-Economics-Common-Sense-Economy/dp/0465002609

[32]

http://www.heritage.org/civil-society/report/americas-homeless-victims-rent-control

[33]

http://www.economist.com/news/leaders/21598996-political-connections-have-made-many-people-hugely-rich-recent-years-crony-capitalism-may

[34]

https://www.amazon.com/Climate-Capitalism-Age-Change/dp/0809034735

[35]

http://www.heritage.org/index/book/chapter-1

[36]

https://www.cato.org/publications/commentary/why-socialism-collapsed-eastern-europe

[37]

http://www.utdallas.edu/news/2012/5/1-17541_Study-Prison-Inmate-Intelligence-Influences-Miscon_article-wide.html

[38]

https://www.cato.org/publications/commentary/future-depends-capitalizing-capitalist-peace

[39] http://www.businessinsider.com/immigrants-who-escaped-socialist-countries-warn-the-us-2012-8

[40]

http://www.dailymail.co.uk/news/article-3745368/Desperate-Venezuelans-break-zoo-slaughter-horse-meat-country-s-crippling-economic-crisis-leaves-thousands-starving.html

[41]

http://www.usatoday.com/story/news/world/2016/05/18/venezuela-food-shortages-cause-some-hunt-dogs-cats-pigeons/84547888/

[42]

https://ideas.repec.org/p/hhs/lunewp/2012_010.html

[43]

https://eh.net/encyclopedia/hours-of-work-in-u-s-history/

[44]

http://capitalism.org/children/what-halted-child-labor-in-factories/

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