Dear Friends,
It seems to me, that the just distribution of societies goods, is of paramount concern to everyone who lives on the planet. The debate has been going on as long as humanity has strode the globe. Today the anti capitalists shout social justice as an vacant moniker. An empty bucket the listener puts whatever idea or notion of what he or she believes justice to be. Never actually defined except with emotionally charged rhetoric and slogans. Our collective lot is lowered thusly.
Social justice, most often, really means the distribution of the goods of society… through political favor. Another term for this is crony capitalism and/or oligarchal capitalism. Everyone knows, at a gut level, that crony capitalism is wrong but few actually understand why. It is the why of it that lets us effectively argue against crony capitalism and understand it‘s effects.
One reason distribution of goods through political favor is bad is that it sets up a whole host of pernicious incentives. These all create the conditions that make people despise work and despise the wealthy. No society becomes wealthy or even well fed that eschews work and hates the wealthy. Veblen said in America people don’t hate the rich because everyone in his heart believes that someday he might become rich. A more human hearted ethos I cannot imagine, But as poverty and deprivation are the wages of indolence, comfort and wealth are the wages of capitalistic virtue.
Lets say that a country is effective at protecting some native industry against competition. Innovation in that industry will slide. It is simply the nature of business and humanity. As the efficiency and innovation slips openings will appear, that other countries economies can take advantage of, where the protector counties laws are not in effect. When this happens, the industry protected will move very quickly, to the competing country. The workers laid off will be only trained to work in the old, formerly protected, industry. They will be expensive to retrain and what will they be retrained for?
In most countries where oligarchal capitalism is the primary means of distribution we see a few families have all the wealth of the country the rest impovershed. These few families are the only people allowed to open businesses. As a result the most competent people in those countries are kept out of business. Keeping competent people out of a counties economy puts that country at a disadvantage to the rest of the World in competitiveness and innovation. This naturally results in the lowering of the mean standard of living in a country… even for the few families!
Protectionism also protects competing counties from your products. Take the example of Brazil in the 1980’s. They sought to protect their nascent computer industry from competition and foster it’s growth by implementing protectionist measures. Imports of foreign computers was discouraged. The result was that every other industry in Brazil suffered slower native computers and less efficient software just as all their competitors were advancing quickly in efficiency from the implementation of state of the art computers. Every other industry suffered and the nascent computer industry collapsed. The lowered GDP will effect every Brazilian for generations.
The ideal for a capitalist society is to create the conditions for perfect competition to thrive. Industries that have perfect competition have low profit margins and high innovation rates. Low profit margins mean the products are available to the majority of working people. Television sets and computers are examples.
Unfortunately it is in the nature of democratic governments to lean towards crony capitalism. The elect who get power always owe some powerful faction or other. The rewards for support are always political protection of the supporter’s goods and despoiling the goods of the supporter’s competitors. Otherwise why support a politician to the tune of millions of dollars, and thousands of man-hours of donated labor. If we accept that people are rational maximisers then we must also accept this fact about the nature of democratic government.
Since democratic government is at the core of every efficient capitalist republican government then we must find a means to control this natural behavior in our elected officials. We here at the International Capitalist Party have the means at hand. It is a NUMA. Were it implemented in Oligarchal Capitalist countries, their economies as well as their standard of living, would be greatly improved.
