Capitalism

[realitycheck44]

I have this completely horrible AP World History teacher. She is exceptionally dangerous to the class because she does not directly embrace socialism, she just gives quotes by socialists to support any viewpoint on the subject she might have. Up until now, I have been able (partially) to retain my sanity, but now I'm just lost. We are starting a study on World War I, the Great Depression, WWII and the Rise of Fascism. She has been talking about The Wasteland alot, especially the spiritual wasteland (ie the idea that people/humanity had lost a sense of itself and all that was good). She seems to express the view that this is all a result of Capitalism. She said that with World War I a significant change came over the world. A sense of disillusionment and irrationality happened. She made us look a Dada and surrealist art as an analogy to what had happened. Her view that she departed on the class was that the whole of western society and ideals all lead to a war.

The Great Depression was the topic of today. Instead of using my book, I decided to do some research on Encarta. For the causes of depression, it said was the widening of the wealth gap that caused the stockmarket crash. (searched Great Depression and clicked on causes). Apparently in 1929, the top .1% of the US population had a total income equal to that of the whole bottom 42% of the people. My teacher argued that this was due to the Capitalists greed and made everyone live in poverty. She went farther to say that the Industrial Revolution (along with Capitalism) caused Militarism, aggressive Nationalism, Imperialism, and the rise of Fascism. Her quote to us from George Orwell gives her opinion quite clearly "You've got to get rid of the troublesome person who points out that fascism and bourgeois democracy are tweedledum and tweedledee."

I am looking for a book, website, or simply discussion, that counters her view of capitalism. I do not know where to begin, since I know very little about history. Any help is very much appreciated.

Zak

[DavidV]

I think the single book that best addresses these issues is the The Ominous Parallels by Leonard Peikoff.

http://www.peikoff.com/op/home.htm

[realitycheck44]

Thanks. I'll definitely have to check it out.

Zak

[DavidV]

A word of advice for your studies:

Objectivism gives you a powerful tool for analyzing the material you hear in class: the ability to integrate facts from different disciplines, social movements, and time periods to form a consistent understanding of an entire culture. This ability allows you to critically analyze what you learn in class and distinguish the facts from bias and propaganda. It can also be a powerful motivator and aid for learning, one that your fellow students do not have, since from them studying history requires memorizing many disconnected facts – as it was for me when I took AP history.

In regard to your teacher, if you try to understand her philosophical framework, (obviously, it is a deeply collectivist one) you will find it much easier to understand where she is coming from. Don’t dismiss what she says out of hand, but learn to view her statements in the context of her philosophy, and integrate them with everything else you know about philosophy and history. In other words, don’t let your teachers get in the way of your learning.

[realitycheck44]

In regard to your teacher, if you try to understand her philosophical framework, (obviously, it is a deeply collectivist one) you will find it much easier to understand where she is coming from.  Don’t dismiss what she says out of hand, but learn to view her statements in the context of her philosophy, and integrate them with everything else you know about philosophy and history.  In other words, don’t let your teachers get in the way of your learning.

I had one philosophical talk with her. She told me Rand was a "dangerous" philosopher. She actually said "I don't understand how the factory worker deserves any less or advances society any less than an inventor". !? She admires Howard Zinn, Chompsky, etc. I try to do this as much as possible, but it is quite hard when she flat out denies facts. For example, she said the poor got poorer in the Industrial Revolution. Not the rich got rich faster than the poor, but that the poor actually got poorer and were worse off than before. I went home and checked some facts on the Net,and it simply isn't true. I don't usually bother arguing with her though because I'm sure she could simply say I got my info off a bias site. She's the teacher, so I wouldn't win.

Thanks for the advice, I will continue to try it.

Zak

PS: Is Thomas Mann's The Magic Mountain worth reading? She recomended it and I check on Amazon, the reviews say its either really good or boring. Nothing about bad philosophy or being wrong though.

Edited March 2, 2005 by realitycheck44

[softwareNerd]

TIA ran a series of article a while back (across 3 issues, as I remember). They chornicled the history of the depression.

More broadly, my guess is that if you look back for 200 years you will almost always find a set of people who think that "we had a golden age, but that changed 50 years ago".

[Tom Robinson]

She went farther to say that the Industrial Revolution (along with Capitalism) caused Militarism, aggressive Nationalism, Imperialism, and the rise of Fascism.

In fact, the opposite is the case. Capitalism means free trade, and the existence of free trade through much of the 19th century mitigated against war. As Ludwig von Mises wrote,

"In fact the internationalization of the capital market, together with free trade and the freedom of migration, was instrumental in removing the economic incentives to war and conquest. It no longer mattered for a man where the political boundaries of his country were drawn. The entrepreneur and the investor were not checked by them. Precisely those nations which in the age preceding the first World War were paramount in foreign lending and investment were committed to the ideas of peace-loving 'decadent' liberalism. Of the foremost aggressor nations Russia, Italy, and Japan were not capital exporters; they themselves needed foreign capital for the development of their own natural resources. Germany's imperialist adventures were not suported by its big business and finance." (Human Action, pp. 501-502)

Edited March 2, 2005 by Tom Robinson

[Praxus]

The Great Depression was the topic of today. Instead of using my book, I decided to do some research on Encarta. For the causes of depression, it said was the widening of the wealth gap that caused the stockmarket crash. (searched Great Depression and clicked on causes). Apparently in 1929, the top .1% of the US population had a total income equal to that of the whole bottom 42% of the people. My teacher argued that this was due to the Capitalists greed and made everyone live in poverty.

During the nineteen twenties the lower class actually had a very significant growth (in fact some of the fastest growth in wages in American history) in wages. So what we have here, is basically a person who doesn't understand the difference between the actual rise and wages and the rise in wages relative to the rich. The later being completely irrelevant to their prosperity.

She went farther to say that the Industrial Revolution (along with Capitalism) caused Militarism, aggressive Nationalism, Imperialism, and the rise of Fascism. Her quote to us from George Orwell gives her opinion quite clearly "You've got to get rid of the troublesome person who points out that fascism and bourgeois democracy are tweedledum and tweedledee."

Simply ask her to prove it. I bet she can't;)

Edited March 2, 2005 by Praxus

[A.West]

Realitycheck,

Leonard Peikoff, in "The Ominous Parallels," discusses in detail the bad philosophy in Mann's "The Magic Mountain" and describes how ideas like that paved the way for Hitler in Germany.

[gnargtharst]

Realitycheck44 said:

"...she said the poor got poorer in the Industrial Revolution. Not the rich got rich faster than the poor, but that the poor actually got poorer and were worse off than before. I went home and checked some facts on the Net,and it simply isn't true."

Just a thought: if she's the teacher, why are you doing the research? I think I'd be inclined to answer her claims with, "Really? That's contrary to what I thought. Where specifically did you get that information, so that I could look at it too and learn for myself?" Of course, for such claims, she'll have no evidence to offer. But at this point, your'e really not learning about the Industrial Revolution any more anyway, you're learning about the techniques of leftists (which is an important subject in itself).

On the offhand chance that her conclusions were the result of honest errors, she could potentially correct her errors while answering your questions.

[realitycheck44]

In fact, the opposite is the case.  Capitalism means free trade, and the existence of free trade through much of the 19th century mitigated against war.Human Action, pp. 501-502)

Her point was that Capitalsim requires an abundance of natural resources. The only way to get those, when you run out, is imperialism. That leads to militarism and nationalism.

During the nineteen twenties the lower class actually had a very significant growth (in fact some of the fastest growth in wages in American history) in wages.  So what we have here, is basically a person who doesn't understand the difference between the actual rise and wages and the rise in wages relative to the rich. The later being completely irrelevant to their prosperity.

Simply ask her to prove it. I bet she can't;)

Not to argue with you, and I don't know alot about economics, but according to Encarta (and supported by the textbook)"While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of this wealth produced. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers' wages grew by only 8 percent."

But the rich still needed the poor to buy products, so they invented "credit- an attractive name for consumer debt. People were allowed to 'buy now, pay later.' But this only put off the day when consumers acumulated so much debt that they could not keep buying up all the products coming off the assembly lines. That day came in 1929." (Encarta)

If the cause of the Great Depression was not the wealth gap, what was it?

Just a thought: if she's the teacher, why are you doing the research?  I think I'd be inclined to answer her claims with, "Really? That's contrary to what I thought. Where specifically did you get that information, so that I could look at it too and learn for myself?" Of course, for such claims, she'll have no evidence to offer. But at this point, your'e really not learning about the Industrial Revolution any more anyway, you're learning about the techniques of leftists (which is an important subject in itself).

On the offhand chance that her conclusions were the result of honest errors, she could potentially correct her errors while answering your questions.

I should have done that. Two reasons I didn't :

1. I didn't think of it because I'm not usually that nice. . I either tell them they are wrong and why, or I just keep my mouth shut. Arguing with her would have been futile, but this may work. I'll definitely use it next time she makes an absurd claim. (I'll let you know how it worked tomorrow probably )

2. Whatever she says, I don't know whether its false when she says it; it's only after researching on Encarta or the net that I find the truth.

Thanks everyone,

Zak

PS: Word isn't working right now, so I apologize for any spelling errors.

[Praxus]

Not to argue with you, and I don't know alot about economics, but according to Encarta (and supported by the textbook)"While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of this wealth produced. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers' wages grew by only 8 percent."

But the rich still needed the poor to buy products, so they invented "credit- an attractive name for consumer debt. People were allowed to 'buy now, pay later.' But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off the assembly lines. That day came in 1929." (Encarta)

Look up the wage rate statistics from the end of the recession in 1919 to 1929.

If the cause of the Great Depression was not the wealth gap, what was it?

The artificial expansion of the money supply is the main cause. This causes malinvestment, which causes growth in the inappropriate sectors, bad allocation of the work of laborers, etc... On top of this is the high tariff rates around the world which stopped Americans from selling their surplus’ to overseas markets. For more read this...

http://www.mises.org/tradcycl/econdepr.asp

Edited March 3, 2005 by Praxus

[realitycheck44]

That article is AWESOME! It was precisely what I was looking for. Thank you so much!

I'll be sure to post any further questions on the subject.

Zak

[Gabriel_S]

Her point was that Capitalsim requires an abundance of natural resources. The only way to get those, when you run out, is imperialism. That leads to militarism and nationalism.

This is essentially Lenin's 20th century update to Marx. As we know, Capitalism didn't collapse from it's own internal contradictions as Marx predicted. Lenin "explains" this failure by claiming that Capitalism avoided self-destruction by exploiting the Third World, i.e., by imperialism. Of course, your teacher has conveniently ignored the remaining history of the 20th century, which witnessed not the collapse of Capitalism but instead of Communism...

If the cause of the Great Depression was not the wealth gap, what was it?

While I'm quite hesistant to recommend anything by Rothbard, you may find this useful (it's a book length treatment of the cause of the Great Depression from one Austrian's perspective):

America's Great Depression PDF

Of course, I would highly recommend reading the appropriate sections of Capitalism: the Unknown Ideal that deal with subject.

[Praxus]

From what I have read Rothbard's economics wasn't the problem, only Rothbard's philosophy.

[realitycheck44]

Of course, I would highly recommend reading the appropriate sections of Capitalism: the Unknown Ideal that deal with subject.

I don't quite have it yet. Barnes and Noble hasn't had one in the like 50 times I've been in there. And not always the same on either. I've been meaning to order it (online), along with DiLorenzo's (sp?) How Capitalism Saved America

Zak

[$Rational-EGOIST$]

Here's another article on the real causes of the Great Depression.

Great Myths of the Great Depression, by Lawrence W. Reed.

[Tom Robinson]

That article is AWESOME! It was precisely what I was looking for. Thank you so much! 

I'll be sure to post any further questions on the subject.

Zak

Here, ladies and gentlemen, is a brilliant example of what a enormous boon the Internet has been to self-education. When I first became convinced that capitalism is the most moral and practical political-economy, finding supportive literature was a blindman's game of hit and miss. What took me years of combing through magazine racks and library stacks to attain, can now be had in a few days' time by WWW search engines. It's hard to be pessimistic when a young scholar like realitycheck44 asks a tough question and gets exactly what he wants in a day or so. It's also enormously gratifying to see someone get excited by new ideas.

Edited March 4, 2005 by Tom Robinson

[the tortured one]

A book I can heartily recommend to you is THE BIRTH OF PLENTY by William Bernstein. It was a fabulous book highlighting the growth of prosperity. the BIRTH OF PLENTY suggests - and supports with groundbreaking analysis - that from the dawn of recorded history through 1820, the 'mass of man' experienced essentially zero growth, both in economic standing and in living standards. It was only in the 19th century that the world's standard of living began to inexorably and irreversibly improve and that the modern world was born.

. He begins to ask why. He gives four reasons (property rights, scientific rationalism, Capital Markets, and Transportation/communication) though he makes a few errors (highlights the use of government in facilitating Transportation/communication, for example) but they are few and far between, and do little to detract from an otherwise great book.

The section you would be interested in is his section where he debunks two myths of Capitalism; that natural resources and imperialism create wealth. He demonstrates how some societies have a wealth of natural resources, but governmental interference in property rights and Capital Markets means they are squandered, and other areas with relatively poor natural resources can have a huge amount of wealth. Hong Kong, Singapore, and New Zealand, for example.

He also demonstrates that the most successful countries in the world today are a result of British Imperialism. The United States, New Zealand, Hong Kong, and Australia are all the products of British Imperialism, and they are extremely prosperous places. Likewise, the South American countries have a history of Spanish Hapsburgian mercantilist imperialism, and thus are relatively poor places.

Overal, a great book to read, with only a few sparse errors. But I think it would be perfect for debunking the myths your professor perpetuates.