On a recent episode of Lions Of Liberty, Marc Clair interviewed John Perkins, author of New Confessions of An Economic Hitman. During the discussion, Mr. Clair described the power of government leveraged by big business as a chicken and egg situation. This is not an uncommon conclusion considering that libertarians and anarchists point to the government as the problem while progressives point to the greed of business as the source of corruption. However, assessing the question logically, one of these is clearly the primary culprit.
There are three possible configurations of any social structure: statelessness where business is subject completely to the whim of the market (i.e. anarchy), a coexistence of state and business, or complete ownership of the means of production by the state (i.e. communism or socialism). Needless to say, any practical application of the middle configuration would appear on a continuum between no state and complete control by the state. It is in this configuration we find ourselves today.
Where states exist, state actors claim powers which exceed natural rights. For example, the U.S. federal government claims a power to tax citizens (i.e. expropriate private property) as a means of raising funds to maintain government agencies. Such a power does not naturally exist and could not be exercised by someone outside of the government.
Since humans act purposefully, applying available means to achieve desired ends, it would be natural for anyone claiming the power of expropriation to exercise that power when they deem necessary. Similarly, anyone not directly possessing such power would seek avenues through which it could be wielded on their behalf. In a free market, businesses have no such power to expropriate: they must serve consumers in order to reap benefits from them. However, when the power of the state can result in greater profits for less cost, businesses will naturally seek access to that power.
In a stateless society, no person, group, or business can legitimately claim powers over others. The state introduces such claims to power and, as a result, the corruption inherent in it.
As has been mentioned here many times, one of the most important historical developments for liberty is the Internet. Before this technology became widely accessible, people around the world were limited in their sources of news and communication. Now, the unfiltered truth about drone bombing in Yemen or the quelling of a popular Catalan secession can be at the fingertips of nearly anyone around the globe within hours.
The technology is not without its pitfalls. The advent of social media and search engines, for example, made available powerful tools of propaganda and mass manipulation. For the time being, the potential for abuse remains in the hands of private citizens. While the largely progressive agenda currently being perpetuated through search engines and social media is at best undesirable, its damage pales in comparison to the potential manipulation of state actors. While this remains the case, alternatives will continue to enter the market, limiting the potential adverse impact of the bigger services.
It was inevitable that proponents of state power would eventually look for opportunities to control such powerful tools of manipulation. Having lost control of the narrative through mass media, and growing ever concerned over the increase in popular uprisings, state advocates now seek control over that which now threatens their hold on power. Some of this effort, such as net neutrality, will appear benign. However, the goal will be an ever increasing hold on all communication and the elimination of competition. In such a world, the efforts of centralization can begin anew and we’ll all be the worse for it.
While first use of the term “capitalism” is often attributed to Marx and Engels, it slightly predates their application and originates from use of the term “capitalist” as many as 200 years prior. Regardless of its history, it was applied by communists of the 19th century as a pejorative, a tendency that remains to this date. However, capitalism merely describes the natural economic actions of human beings.
When Robinson Crusoe found himself alone on his island, his first order of business was survival. This included both shelter and sustenance. To achieve the former, Crusoe could not forsake the latter; the acquisition of food and fresh water was necessary to sustain him while he constructed viable protection from the elements.
Time being limited, Crusoe had to find means of increasing production of sustenance to free him up for building shelter. As a result, he would save some fish for coming days in order to amass materials for a net. In other words, he accumulated capital (fish), to sustain him on the days his time was spent on constructing a net. The net, in turn, provided him increased output of fish (i.e. capital), freeing his time to construct shelter.
In short, improving life can only occur when capital is accumulated and applied toward innovation and increased productivity. Capitalism describes this natural economy in a world of scarcity. Any interference with capitalism runs counter to nature and inevitably leads to a degradation of conditions. As Ludwig von Mises put it in Historical Setting of the Austrian School of Economics:
Governments, political parties, pressure groups, and the bureaucrats of the educational hierarchy think they can avoid the inevitable consequences of unsuitable measures by boycotting and silencing the independent economists. But truth persists and works, even if nobody is left to utter it.