Tuesday, December 5, 2017

Quit Modifying Capitalism!



A few weeks ago Andy Kessler raised an interesting point in his piece, “Quit Modifying Capitalism” in the Wall Street Journal of November 20, 2017 (page A15 if you’re curious).  As Kessler suggested, capitalism is capitalism, and socialism is socialism.  Why cover up with meaningless qualifications?  Kessler had in mind such modifications as "democratic capitalism," "social capitalism," "ethical capitalism," even "free market capitalism" — you name it.

Norman G. Kurland
In response, Norman Kurland, president of CESJ, sent a letter in to the Journal, which we summarize in this posting.  He agreed that capitalism is capitalism, so why bother to modify or try to argue in its favor by quibbling about essentially meaningless qualifiers?

Case in point, some years back, Michael Novak gave exactly the same definition of his "democratic capitalism" as Martin Green did for his "democratic socialism"!  Evidently, once you start qualifying what something is, it ends up both everything and nothing.  As G.K. Chesterton once said, "If use of capital is capitalism, then everything is capitalism."  The same might be said of socialism, i.e., if acting in a social manner is socialism, then everything is socialism.

This is what happens when you start in qualifying things, and trying to make a bad thing good, or vice versa ("When I called you a bloodsucking tick, I meant it in a nice way!").  Interestingly, as Norm noted — "Ironically, both 'capitalism' and 'socialism' originated as pejoratives.  The difference is that socialists were much more successful in spinning the term, while capitalists have fought a rearguard action since the socialist Louis Blanc gave 'capitalism' its modern meaning in 1850."

As he continued:
And that meaning?  A system in which some people control capital — things — to the exclusion of others.  “Capitalism” is “thing-ism,” putting things above people.  This was something neither Adam Smith nor Jean-Baptiste Say had in mind when formulating their theories.
And the solution?  Karl Marx thought the way to restore justice is to abolish private ownership of capital.  Lawyer-economist Louis Kelso had a better idea: make it possible for everyone to own capital, but without redistribution or burdening the taxpayer with the cost.
Kelso’s invention of the Employee Stock Ownership Plan (ESOP) was a first step away from the injustices of both capitalism and socialism.  This is a just, third way in which everyone controls his or her life, and safeguards liberty, by having private property in capital.
What America and the world needs is something that will do for all forms of capital what Lincoln’s 1862 Homestead Act did in a limited way for land.  That is, reform the tax and monetary system to enable every child, woman, and man to purchase capital on credit collateralized with insurance, and pay for it out of the future earnings of the capital itself.

Yours, etc.,

Norman G. Kurland, J.D.
President
Center for Economic and Social Justice

1 comment:

Baseball Billy said...

People will read Mr Kurland's comments and it will sink in, despite the fact that the term, "Social justice," is part of the CESJ's name and 99% of the country does not know the real meaning of the term. As Norm has said in other places, the Federal Reserve should be restored to its original purpose, being a source of funds for private investment in productive assets.