Can capitalism be improved?

Aug 5, 2015

- By Bill Bonner

Bill Bonner
Paris, France

Dear Diary,

We're watching three things, in a desultory kind of way - US stocks, Chinese stocks and gold. None moved significantly yesterday.

So, we return to the Zombie War.

Let's preface today's comments by saying that we never know exactly what is going on, nobody does. All we can do is open our eyes and look...from one side, then from the other...through the glass darkly and then clearly...with malice towards none and a sly smile on our face.

That said, the "Zombie War" is our own invention. It describes the forces involved and what is really at stake. For example, why is there such a desperate struggle to keep the credit bubble inflating? Why not just let some of the air escape and allow asset prices to fall?

Because the forces on one side - zombies, cronies, and the feds -- want to tell other people what to do and live at their expense. And spending money that doesn't belong to them is one of the ways they do it. Where do they get the money? From credit - which they largely (but not completely) control.

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But who is on the other side? "Hard working, honest citizens," we might say. But they don't have to be especially hard working. Many never break a sweat. And honest? Not necessarily. They might cheat on their taxes or their wives; we don't know.

All we can say for sure is that they are not zombies, cronies, or government bullies.

On the other hand, there are plenty of honest, hardworking people who are actually in our 'zombie' category - through no fault of their own. People who are now collecting social security or medical benefits -- beyond what they contributed to the system -- for example. In some small measure, a person who parks in a "handicapped" space is enjoying a zombie privilege; someone else was forced to prepare the spot for him. Teachers, firemen, military or medical employee, accountants - a whole range of people who work hard and do an honest day's work - may be 'zombified' too. Their work may be unnecessary, unproductive or unfairly priced, thanks to the intercession of government. In many cases, in the absence of an active market for their services, it is impossible to know. A public school teacher might do excellent work, for example, but might enjoy compensation at twice the level of his private school peer. You might say he is 'half-zombie.'

So let's not take it personally. Instead, let us consider the nature of the system itself. Our friend Liam Halligan recently took aim at a new book - Paul Mason's "Post-Capitalism." We would not read the book. You can tell by the title that it is nonsense. It misunderstands 'capitalism' from the very get-go. The author seems to think that it is a precise system, with rules and principles that can be improved.

Mason writes that we can only "rescue ourselves from turmoil and inequality by moving beyond capitalism. " Thus does the author take his place in the long line of meddlers, bullies, and world improvers who think they are smarter than all the other people in the world - put together. Capitalism is not a "system" like democracy or a composting toilet. It is not something that anyone designed. It is not something that can be improved, consciously. It is the result - or should be -- of free markets, including the insights, work, gambles, and luck of millions of people all over the planet. Improve it? You might just as well 'improve' the price of Walmart stock or of a pound of peaches. Capitalism is not a system that you can take or leave, or take some parts of and leave the others, thereby making it more suited to your needs.

Capitalism is just what you get when you respect the rules of civilization. Don't kill. Don't steal. Don't bear false witness. The rest probably don't matter, but we haven't taken the trouble to think about them very much. Jesus condensed the rules into two big ones when he gave his 'Sermon on the Mount:' Love God. Love thy neighbor. The Jewish scholar Hillel put it in terms a child could understand: if you don't want anyone to do something to you, don't do it to him.

All the rest is detail. You can't both love thy neighbor and steal his stuff. And if you follow that rule, capitalism is what you've got. There is no way to 'improve' it.

But what ho! Along come some clever people with a good idea - Uber. You find a ride easily. Both rider and driver are tracked by the system to provide a quality/reliability trail on both sides. If customers don't like the service, they don't use it. Simple, right? Fair? Honest? Capitalism doesn't know or care. It's up to buyers and sellers.

Wait! Can we make this 'system' better? 'Yes,' say the cronies.

How? Shut it down!

That's what they police in Paris have tried to do. We got a report today that says it is illegal to use the Uber app. And in New York, Hizzoner Bill de Blasio wants to limit the number of new drivers Uber can take on. That's the way to boost employment!

And Hillary Clinton, champion of zombies and cronies everywhere, warns that the 'sharing economy' is going to have to get in line. She promises to take a 'hard look' at it if elected president.

Love thy neighbor - but only if he gives you a campaign contribution.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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1 Responses to "Can capitalism be improved?"

Arul Thareja

Aug 7, 2015

has anyone read John Hussman. More of the same from a different perspective. Although Bill you are still my favorite :)

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