The value of an ideology or principle is halved for every adjective that precedes it. Rather than understanding a concept with its weaknesses as well as its strengths reformers pretend they can perfect it with the correct qualifier. Thus Elizabeth Warren claims to be a capitalist, but advocates ‘accountable’ capitalism; indicating she knows little about capitalism. Capitalism is held accountable at every cash register. It is Ms Warren who refuses accountability for the policies she advocates.
Marco Rubio is not much better with his ‘common good’ capitalism. Both leaders indicate that they can somehow tweak the free system of exchange to achieve better aims for society, but their concept of the common good is often antithetical to the discreet good. Hayek warned that central control of economies inevitably involves the use of government force because people do not agree what the ‘common good’ is. When political leaders lament the failure of capitalism to deliver what they want, they are really saying they do not want to pay the price. The original sin of American politics is to promise benefits without paying for them, hiding the costs in cross subsidies, mandates, proxies and regulations. This economic obfuscation layers perverse incentives that distorts the markets for which the government never acknowledges its accountability. Ms. Warren’s own lack of accountability is the bigger problem.
Rubio and Warren do not want to shed capitalism because everybody likes the endless stream of cool and cheap stuff it delivers, so they call it capitalism even if the policies they advocate belong to anti capitalist ideologies. But the greater good of capitalism is the experimentation and innovation and the advance of knowledge. It functions best when knowledge and power meet. Those with political power do not possess the knowledge, because it is determined by an ongoing experimentation that is thwarted by central power which is exerted only on the fixed information we have today. Hayek also warned in The Constitution of Liberty that those with the most knowledge often advocate a control that inhibits the growth of knowledge; enforcing the best solution we have today from a position of authority may avert a better solution in the future. Stagnation results.
By now this blog must seem like a promotional vehicle for Kevin Williamson, but he remains one of the most insightful (and prolific) political writers in my opinion. In National Review he writes Marco Rubio’s Half-Baked Political Philosophy:
He is wrong about a great deal. He worries about the “financialization” of the U.S. economy, which is largely a myth. (The share of assets controlled by financial firms has held steady around 2 percent for a long time.) He worries that the lack of satisfying employment in certain communities has led to substance abuse and a decline in marriage without considering the possibility that the unemployment is a symptom of the same noneconomic pathology as the addiction and family dysfunction. “Diagnosing the problem is something we should be able to achieve across the political spectrum, though even that seems challenging at times,” he writes. But Dr. Rubio has got it wrong. “Ultimately, deciding what the government should do about it must be the core question of our politics,” he continues. Misunderstanding the problem and then reorienting government toward the execution of a program of therapy dreamt up by quacks with no special expertise or genuine knowledge of the disease in question is exactly the catastrophe you get when you encounter the word “diagnosis” in a sentence written by a lawyer.
Capitalism is what happens when government respects property rights, which include the rights to trade and to work. What we need from men in government is not the quasi-metaphysical project of reinventing capitalism in the name of the “common good.” What we need from government is — government. The government in which Senator Rubio serves cannot manage to appropriate money through regular order, to cease its own ruinous accumulation of debt, or to secure a clear and lasting military victory over a rabble of half-organized fanatics festering in the wilderness of Afghanistan. So, no, I do not think they know how to run Apple or Facebook or Ford. If Senator Rubio cares about the common good, then he can butt right out while the people who produce the goods and innovations that bring with them such ancillary benefits as jobs and tax payments do what they do.
Read the whole thing. Like all ideologies capitalism evolves with experience and adjusts to failures and social evolution. It never achieves perfection, but its endurance indicates a strength that competing ideologies lack. We can learn much from the ones that failed, though it seems every generation is cursed to try them again. The ones that succeed are subject to be taken for granted. It is the job of the educational institutions to transfer the understanding of our critical institutions, and their failure is crippling.