September 25th, 2009 8:10 am | by Marc Gallagher | Published in Bailouts, Big Government, Commentary, Economics, Free Market, Individual Responsibility, jobs, Liberty, Market Regulation, Maven Commentary, Money, Philosophy | 38 Responses
Michael Moore utilizes a word in the title of his new movie to elicit praise and respect from his Left-leaning fans and derision from his Right-leaning critics. Unfortunately for all of us, he uses the wrong word to describe his movie’s subject matter. It’s not capitalism, silly man; it’s corporatism. Therefore, I refuse to call his movie anything but what its true title should be: “Corporatism, A Love Story“.
Let’s head to Merriam-Webster to clear this up. Which one of the following best describes America today?
capitalism: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
corporatism: the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction.
The correct answer is, of course, corporatism. A key phrase in the definition of capitalism is “by investments that are determined by private decision“. How do government bailouts of private industry reconcile with this definition? They don’t. And if you think this is a recent phenomenon then I urge you to consider the Savings and Loan bailouts back in the 80′s and 90′s.
Another assertion in the definition of capitalism that does not compute in America today is that the prices, production, and distribution of goods are supposed to be determined by a free market.
A free market does not exist when we have the Federal Reserve artificially holding interest rates low, heavy government regulation of industries, and government subsidies that bastardize the natural rules of supply and demand. We haven’t had a free market in the United States for a very long time. Capitalism can not exist without a free market.
What we have in America is corporatism. And this is the essence of what Michael Moore is railing against in his new film. Unfortunately, he doesn’t offer useful solutions because he doesn’t even understand the problem.
The big corporations hire lobbyists to protect their own interests in their respective industries. The lobbyists go to Washington, D.C. and influence lawmakers to pass laws that give special advantage to the corporations. So, in essence what we have is corporations cozy in bed with the government while Joe Citizen sleeps naked on the floor.
The only sensible solution to this problem is to set the market free. In a free market Joe Citizen consumer has the power. He votes with his dollars. Badly run businesses fail because there just aren’t enough people voting with their dollars to keep them afloat. Well run businesses flourish and create opportunity for Joe Citizen and higher growth in production for the country as a whole. As a result less people are unemployed and innovation is encouraged.
Certainly some will fall through the cracks and will need help. This is why churches and charitable organizations exist. It is what they do best. They have a more natural incentive to help and will always do a better job than some government program.
It’s strange that Michael Moore believes that more government is the solution to a problem that is being made worse by that very same government. Moore got one out of three right. He is good at telling everyone about the problem. He confuses people by calling the problem something it’s not. His solution to the problem actually is part of the problem in the first place.
Granted, there’s never a “perfect” solution, but there is a “best” solution. It’s the free market silly man, not more government.
For more on Capitalism vs. Corporatism see this excellent piece from a year ago from Radley Balko at Reason.com.