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Even at their best, people are arrogant, prideful, avaricious, covetous, and irrational beings, capable of the most horrendous evil. We are also the first to declare ourselves enlightened and inculpable. We convince ourselves that material and technological advancement is somehow evidence that we are on a path to irreversible redemption. We rationalize that this is somehow an ascendant, political path. We’re on the right side of history, we like to think. We fashion ourselves as noble creatures while ignoring the worst kind of news, rationalizing an inexhaustible historical archive of evidence proving otherwise.
That’s not to say that human beings are not capable of amazing invention, cooperation, and compassion. We are. Our laws, customs, norms, institutions and moral codes provide us with a framework for civility and order. Domesticated humans have evolved as both fragile and advanced creatures, but like all domesticated animals, we are also capable of nearly immediate reversion to our undomesticated selves.
Capitalism, as we in America describe it, rests on a single principle: the right to property. This right extends to both the tangible and intangible, ones stuff and the fruit of ones labor. No person or institution has the right to take what is not theirs without the consent of the owner and just compensation. We make a single exception to this principle; we allow the government to take, that is to tax. However this taking is limited to what is necessary to fund and execute a finite number of collective functions.
Societal advancement provides no safe haven from human nature. Poverty, bad luck, poor choices, indolence and stupidity still abound. Likewise, wealth, luck, good choices, perseverance and intelligence continue to benefit those so blessed, motivated or inclined. Politics can’t alter those factors, much as politicians may promise otherwise. Capitalism, however, rewards intelligence, perseverance, and good choices; when it does, the results can be stunning. The vast wealth garnered in commerce by just a few Americans can seem disproportionate, even unimaginable, however it is precisely this wealth that overwhelmingly funds our government and provides resources for our churches, charities, and institutions. This wealth is neither ill-gotten nor tainted. It was not stolen from customers. It was not coerced from labor. It was earned — each cent — in commerce.
The world of commerce is a hard, competitive place but there are also times when a dedicated woman can write a few children’s novels and accumulate more wealth than the Queen of England. Nonetheless, there are very few situations where market position is not constantly threatened by innovation, obsolescence, competition and resource availability. Just as politics can’t arbitrate the fundamentals of individual success, neither can it control the spoils and trajectory of commerce. Attempts otherwise always result in failure.
Marketplace fundamentals will always overwhelm the best intended law, or the most clever regulatory scheme. Banking regulations in the 1930s meant to manage the risk of another depression were eventually undone by technological advances in the liquidity of pooled investments, causing the S&L crisis despite the many regulatory countermoves. Three-quarters of a century later, attempts to promote home ownership could not erase the fact that poor credit scores were evidence of high risk and this led to a cascade of reactions that led to the Great recession. This bubble could not have been created without the Federal Fannie/Freddie implied guarantee and their near-monopoly on mortgage funding (combined, of course, with the Federal Reserve’s control over money supply and interest rates.)
Moves as simple as “cash for clunkers” send unpredictable and disruptive waves through the economy. Now, as the Federal government faces unconscionable deficits, taking wealth from the checkbooks of future generations, it turns where it must to fund its irrational unfunded promises: commerce and the wealth of all those involved in commerce. This is a money grab and no more — and to justify this additional taking, disguised as a tax, capitalism and capitalists must first be demonized. It’s only fair, they will say. “Everyone should pay his fair share” is the mantra. Needless to say, this is self-destructive behavior. Despite what Hillary Clinton or Elizabeth Warren may say, everyone knows that private commerce is the source of all wealth and prosperity, and all taxes.
And if there is one key to success in commerce, it is this: undercharge and over-deliver. The government thinks it can survive by doing the exact opposite, but it is profoundly wrong. There is nothing immoral about capitalism or capitalists. The essential tenets of capitalism are written into the Ten Commandments: thou shall not steal; thou shall not covet. These represent the basis for capitalism: the right to property. What’s mine, is mine, what’s yours is yours. Any claim I may have on what is yours is false and wrong, even if I rely on the authority of government to take it for me.
Let us pray…
Image Credit: Flickr user Catholic Church of England & Wales.