Saturday, November 22, 2008

Capitalism, China, and the U.S.

Do Americans Understand the Concept of Capitalism?

Twenty years ago or so products from China started showing up on American shelves. Things like pot holders, and cheap little ceramic statues.

I'm old enough to remember when the same thing happened with Japanese items, but it was cheap transistor radios and other electronics, remarkable in that the Japanese industry would revolutionize the way electronics were designed, manufactured, and marketed. Look at the percentage of the electronics market they own in the U.S.--almost all of it. There are no TVs made in America, the last time I checked.

But it doesn't matter me that the Japanese have done so well. They are our political friends; we helped rebuild their nation after WWII.

But the revolution came to Japan first, not America. Americans refused to listen to W. Edwards Deming, widely credited with improving production in the United States during World War II, but laughed at--by Americans after the wa--because of American egotism: American manufacturing had proven itself during war-time production, and now it was king.

Japanese was not king, it barely existed. The Japanese were hurting economically, and being the smart people they are, they knew that quality goods would sell if they only manufactured them inexpensively enough. America laughed at those early Japanese products because we thought quality meant expensive, but we bought them because they worked--and because they were inexpensive.

As for the Chinese products America began to see two decades ago, I was incensed to see them in our stores, on our shelves, competing with products made in free nations. Anything that had a tag that said "Made in China" I put back, and bought more expensively--when there was a choice.

The world has changed. No longer can you just put back things "Made in China" because so much of what is for sale is made there. Thousands of dogs and cats died a year ago because of tainted food products; the year before that it was children's toys painted with lead. After the pet food scandal, the very same scandal erupted in China itself, with the tainting chemical being in infant formula.
The Chinese industrial revolution is filled with unethical practices, but with fear of the government: the man who owned the toy factory that used lead-based paint committed suicide because it was more honorable to him than being put to death by the Chinese government for his "mistake."

"You may remember when the world was divided between communism and capitalism, and when the Chinese were communists. The Chinese still call themselves communists, but now they’re also capitalists," writes Robert B. Reich, the twenty-second United States Secretary of Labor, serving under President Bill Clinton.

But saying China is capitalist is like saying America is socialist--true, yet not true. The bigger truth is, we are becoming more like a socialist nation than the Pilgrims could have imagined; they gave up communism in the spring of 1623.

Gus Van Horn quoted The New Republic: "It's too bad for many reasons that, 'this nominally communist country now [only] seems more capitalist than Wall Street'" [italic added by Van Horn] He then added his own observation:

"The people [of China] have come to expect the fruits of capitalism (e.g., high wages and a good standard of living) while remaining ignorant of the nature of capitalism. True, they may blame the government when things turn sour, but this will likely be for the wrong reasons. Anyone who expects a government to be able to turn things around by any means other than simply protecting individual rights will be repeatedly disappointed.A blind rebellion is unlikely to result in China ending up free. Worse, capitalism will get the blame for the uneven and unsustainable growth pattern that has resulted from foolhardy attempts at central planning on both sides of the Pacific." [emphasis added]

Unfortunately, what Van Horn forgets to say is that most Americans are ignorant of the nature and the source of capitalism.

"The gap between China’s rich and poor is turning into a chasm," writes Reich. "China’s innovators, investors, and captains of industry are richly rewarded. They live in luxury housing developments whose streets are lined with McMansions. The feed in fancy restaurants, and relax in five-star hotels and resorts. China’s poor live in a different world. Mao Tse Tung would turn in his grave.

"Capitalism has won hands down. The real dividing line is no longer economic. It’s political. And that divide is between democracy and authoritarianism. China is a capitalist economy with an authoritarian government."

In the sense that the use of capital exists in China and that its users are allowed to profit, it may be called capitalist. But in the sense that politics is the dividing line, America is becoming more like a socialist nation every day.

"Capitalism is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned," wrote Ayn Rand. Private ownership means private decisions about the use of the property, and money is property because it was created by the minds and labor of those who earned it, not by the government that printed it.

But soon we are to see "the shared presumption that the way forward is always through moderation and compromise." And we will see it in the way Americans handle the incoming administration of Barak Obama and the Democratically-controlled Congress.

Rights, as in property rights, as in money being property, are not something to compromise on. Compromising on rights turns them into privileges that are "allowed" by the government only to the point that we as Citizens allow; or so we thought. The overwhelming majority of Americans told the Congress not to use our money to bail out Wall Street's economic mess in the mortgage industry. They failed to listen. We did not vote the bums out of office, we increased the majority of the greater of the two sets of bums, the set which is more dangerous because they don't even give lip service to the free market as do the Republicans.

In the November 4th vote, Americans "presumed the way forward" was to compromise on their rights. This demonstrates we, as a nation, no longer understand the nature of how capital is created.

"The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve 'the common good', wrote Rand. "It is true that capitalism does[achieve the "common good"]—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice. What Is Capitalism? Capitalism: The Unknown Ideal 20

Americans voted in the most liberal legislator of our times, one who will not even acknowledge that associating with people who hate America and/or committed crimes against it is anything to own up to.

Clearly Americans do not understand the justice in capitalism, or we would not, year after year, treat our right to control our own property as a privilege granted by the government and as something we can allow to be compromised into obscurity.

See also: Obama's Continuing Socialism; Obama and the Fairness Doctrine; Al Gore and Coercion in the Free Market; No Justice in "Luck Egalitarianism"; Distribution of Labor, Capitalism, and Obama; Originalism and Obama; Artificial, Public-Financed, Non-Profiteering Indu...; Economic Freedom Needed in the U.S.

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