Capitalism, Democracy, and Utopia

[Kate87]

My contention is that capitalism is not compatible with democracy. First I want to define democracy because I noticed that Objectivist's use the term in a very specific way.

Ayn Rand Lexicon:

“Democratic” in its original meaning [refers to] unlimited majority rule . . . a social system in which one’s work, one’s property, one’s mind, and one’s life are at the mercy of any gang that may muster the vote of a majority at any moment for any purpose.

I want to make it clear that I am not using the word democracy to mean unlimited majority rule. Rather I am using "democracy" to mean a system of representative government through elected representatives, ie a "representative democracy". For example both Britain and America are representative democracies even while one is a constitutional republic and one a constitutional monarchy. Here is a quote by Ludwig von Mises which expresses sympathy for fascism (there are other quotes from Hayek and Friedman in this article http://www.salon.com...libertariansim):

It cannot be denied that Fascism and similar movements aimed at the establishment of dictatorships are full of the best intentions and that their intervention has for the moment saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.

Unfortunately in every actual case of a respected economist arguing for radical capitalism, that economist also has sympathies with fascist dictatorships. With Friedman it was Pinochet. With Mises it was Mussolini. With Hayak it was Pinochet also. I think the reason this has always happened with respected radical capitalists is because they are the ones who best know that an electorate would never accept their policies in a million years. Even if you managed to persuade 90% of people to accept the policies, the 10% would riot for a revolution. These respected economists know this and for this reason, radical capitalism is a utopia. I use this word to mean it is a perfect system which could never and will never happen in reality unless it was combined with taking away people's right to vote for their representatives which is undemocratic.

Edited December 22, 2012 by Kate87

[Nicky]

Friedman, Mises and Hayek never sympathized with fascism. Not with Pinochet's fascism, and not with Mussolini's fascism. You're just making up lies.

They sympathized with liberal economic policies. Also, fascism is not just the absence of democracy. A liberal monarch or dictator is not a fascist.

Edited December 22, 2012 by Nicky

[Kate87]

Friedman, Mises and Hayek never sympathized with fascism. Not with Pinochet's fascism, and not with Mussolini's fascism. You're just making up lies.

They sympathized with liberal economic policies. Also, fascism is not just the absence of democracy. A liberal monarch or dictator is not a fascist.

I just found these two sources regarding Friedman. To be fair, they persuade me that Friedman doesn't have any sympathies with fascism:

Letter from Friedman to Pinochet:

http://wwww.naomikle...het-letters.pdf

PBS interview:

http://www.pbs.org/w...riedman.html#10

Having read these, I think Friedman genuinely visited many states including fascist and communist in order to honestly advance his policy advice. With Hayek, I have not been so convinced in my search (http://coreyrobin.co...k-von-pinochet/):

[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism. My personal impression. . . is that in Chile . . . we will witness a transition from a dictatorial government to a liberal government . . . during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement.

This quote is explicitly endorsing temporary dictatorship as solution against what he views as an increasingly illiberal democracy. I find this an interesting argument and wonder how this can be rejected from an Objectivist perspective? Ie, why don't you guys try to infiltrate the military in order to form a military dictatorship with a view to dismantling the welfare state and instituting a republic with free market capitalism enshrined in the new constitution? I find this unacceptable as it is antidemocratic, but wonder how Objectivism could reject this solution?

I don't have time to look into Mises at the moment, but will come back to him.

I definitely don't appreciate your accusation of me making up lies. That's not my style, I look at the evidence and see where it leads no matter where that place may be.

I do take your point about "liberal dictators" not being the same as fascists.

Edited December 22, 2012 by Kate87

[Dante]

This quote is explicitly endorsing temporary dictatorship as solution against what he views as an increasingly illiberal democracy. I find this an interesting argument and wonder how this can be rejected from an Objectivist perspective? Ie, why don't you guys try to infiltrate the military in order to form a military dictatorship with a view to dismantling the welfare state and instituting a republic with free market capitalism enshrined in the new constitution? I find this unacceptable as it is antidemocratic, but wonder how Objectivism could reject this solution?

Quite easily. Ayn Rand strongly believed and argued that the ultimate driver of history is philosophy, not politics. No political system can survive for any extended period of time which is not supported by the intellectual, cultural, and philosophical trends of its people. Simply put, the prevailing philosophy of a populace leads, and politics follows. Capitalism cannot survive in a nation without a supporting philosophical base that is well-articulated and accepted as true by the people of that nation. This was precisely what she spent her life trying to create and promote. There is only one way to get a capitalist government in America, or any other country, and that starts with a cultural and intellectual acceptance of the foundations of capitalism, not a military coup.

[SapereAude]

You should note Kate, that the use of "dictatorship" to refer to a government that holds power without the consent of the governed is very recent and as such those value judgements can be flawed as you already noted that you were mistaken about Friedman.

You need to be careful in your definitions. An authoritarian democracy can be fascist while a liberal dictatorship can, in theory at least, be relatively free.

If generally interested in learning more on this topic there is a good book by Jacob Talmon about the concept of "totalitarian democracy" which he believes could apply to such as the Nazis.

Edited December 22, 2012 by SapereAude

[Spiral Architect]

Mises was critical of all central planning. The only possible exception could come from the ethics of emergencies but I cannot find a quote from Mises on the subject. I have a good reference library on Mises and while I certainly have not looked through all the books I checked the classics on Socialism and Liberalism and came up boxcars. Considering he FLED Austria when the Nazi machine got rolling I’d say he rightly feared it.

As also evidence, Mises not only systematically continually proved central planning was impossible but his economic calculator smashed the idea so he would never endorse Fascism or any variant of central control of the population.

Also, it should be noted, while working in Austria in the 20's he once wrote that Germany was a country falling apart and a populace ready for "strong man". He did not endorse the idea but was cautioning students that bad ideas will lead to a dictatorship. History proved him right.

[Spiral Architect]

Also, capitalism and fascism are contradictions. Capitalism is a system of Government that protects individual rights while Fascism is a government that is designed to violate them. In fact the hallmark of Fascism is its weird premise of claiming to support individual ownership of property while demanding that there is no individualism at all and that everyone serves the State. Basically it is the illusion of ownership while the truth is the State owns you and by extension all that you do.

Don’t make the mistake of assuming the Capitalism is about economics as a primary when it is a derivative. A free economy is one of many aspects of a free society, and naturally a free people will save for the future to create savings, or capital. This is what caused Marx to popularize the term Capitalism since he saw liberal societies, including the mixed monarchies and of Europe in the 19^th Century I might add, capitalistic since freedom caused savings to be generated and he simply focused on how “bad” it was for people to keep wealth for themselves – I.E. capital to flow to those who created it versus those who labored. Marx ignored freedom and made Capitalism about economics instead of what it is really about, individual rights, and then reversed engineered his system from there.

[Nicky]

With Hayek, I have not been so convinced....

This quote is explicitly endorsing temporary dictatorship as solution against what he views as an increasingly illiberal democracy.

....

I do take your point about "liberal dictators" not being the same as fascists.

I'm confused. Do you accept that supporting an economically and socially liberal, unelected leader is not support for fascism, or don't you?

If you do, then what exactly makes Hayek a fascist sympathizer?

Edited December 23, 2012 by Nicky

[moralist]

My contention is that capitalism is not compatible with democracy.

Capitalism certainly isn't compatable with the liberal Democratic public union majority in California who are able to vote for their own wages benefits insurance retirement and disability.

In your opinion, with what is Capitalism compatable?

[Kate87]

I'm confused. Do you accept that supporting an economically and socially liberal, unelected leader is not support for fascism, or don't you?

If you do, then what exactly makes Hayek a fascist sympathizer?

Sorry the quote above makes him a sympathiser of dictatorship.

With Mises, it looks from the quote in my OP that he does sympathise specifically with fascism. So, so far Friedman is exonerated but Hayak sympathises with dictatorship and Mises with fascism.

[tadmjones]

and the answer is.. capitalism is only compatible with a system that recognizes individual rights, does democracy recognize individual rights?

[Kate87]

Capitalism certainly isn't compatable with the liberal Democratic public union majority in California who are able to vote for their own wages benefits insurance retirement and disability.

In your opinion, with what is Capitalism compatable?

Pure laissez faire capitalism I think is a utopia and is therefore not compatible with reality. This is because in the best case scenario, a sizeable minority of people would riot to protect the welfare state. This is because the welfare state is relied upon by people and does correct some real injustices in society. For example, if you are born to lazy parents who spend their money on alcohol and not elementary education, you could potentially start life with a huge disadvantage by not being able to read or write properly. To argue that charities would find this disadvantaged child and fund her education I think is unrealistic. Or to argue that the parents would be charged with neglect and sued by the state to fund her education I find unrealistic since the parents are alcoholics and do not care. The child would be left languishing.

[Kate87]

Capitalism could be enacted in reality by a dictatorship, but would soon be changed since dictatorships collapse given enough time.

[Nicky]

I definitely don't appreciate your accusation of me making up lies. That's not my style, I look at the evidence and see where it leads no matter where that place may be.

In the OP, you claimed that Friedman, Hayek and Mises sympathized with fascism. That claim wasn't based on any evidence, it was a lie.

We proved you wrong on every single count. You even admitted to not knowing anything about them, and had to look into it to search for any evidence that might back up your original fabrication.

Of course I'm gonna accuse you of making up lies. All you do is make up lies.

[Spiral Architect]

Sorry the quote above makes him a sympathiser of dictatorship.

With Mises, it looks from the quote in my OP that he does sympathise specifically with fascism. So, so far Friedman is exonerated but Hayak sympathises with dictatorship and Mises with fascism.

Mises was critical of all central planning. The only possible exception could come from the ethics of emergencies but I cannot find a quote from Mises on the subject. I have a good reference library on Mises and while I certainly have not looked through all the books I checked the classics on Socialism and Liberalism and came up boxcars. Considering he FLED Austria when the Nazi machine got rolling I’d say he rightly feared it.

As also evidence, Mises not only systematically continually proved central planning was impossible but his economic calculator smashed the idea so he would never endorse Fascism or any variant of central control of the population.

Also, it should be noted, while working in Austria in the 20's he once wrote that Germany was a country falling apart and a populace ready for "strong man". He did not endorse the idea but was cautioning students that bad ideas will lead to a dictatorship. History proved him right.

I'll even say it one more time since you ignored it - Mises and the Austrian School of economics completely demolished the idea of central planning. There is no way Mises would endorse a system of government he was critical of, in writing and his most celebrated works, and a government he actually fled when it came knocking.

[Spiral Architect]

Pure laissez faire capitalism I think is a utopia and is therefore not compatible with reality.

LFC is not utopian, at least not by Objectivist standards. I’m sure you will get some utilitarian’s that think that but the idea of LFC is not “the greatest good for the greatest many” or argued for since it will produce the perfect future. Yes, it will produce the most good but it will not be perfect and that is a derivative. People can make bad choices, and will. A free people will have the chance to fail. The idea of a utopia is a straw man here because LFC is not argued for its societal benefits but because it is necessary to live and thrive as a human. It’s practical in that it is necessary to sustain oneself as a man and it is ethical since it puts his survival in his hands.

Edited December 24, 2012 by Spiral Architect

[Spiral Architect]

Capitalism could be enacted in reality by a dictatorship, but would soon be changed since dictatorships collapse given enough time.

Logically, what you just wrote is:

A government that protects rights could be enacted by a government that violates rights.

or

Individual Rights can be created from violating Individual Rights

I have to ask, are you familiar with Objectivist theory of government? You have good questions but you’re just rushing in with a Hodgepodge of progressive miseducation and generalized knowledge of socialism and capitalism from somewhere else, then template that knowledge onto perceived errors that violate what you do know about Objectivism. Then blasting away. It might really help you clarify things if you start over and look at the subject fresh then try to sort through the contradictions that will present itself.

[Ninth Doctor]

Concerning Mises and Mussolini:

http://archive.mises.org/18257/mises-on-fascism-again/

It's hard to top this claim for mendacity.

[Kate87]

In the OP, you claimed that Friedman, Hayek and Mises sympathized with fascism. That claim wasn't based on any evidence, it was a lie.

It was based on the Salon article..... and the quotes I have been quoting throughout the thread..... duh.

Concerning Mises and Mussolini:

http://archive.mises...-fascism-again/

It's hard to top this claim for mendacity.

Good find. Mises conclusion:

But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.

He is essentially arguing that fascism is better than either communism or socialism. Ie support fascism in the short term to make it more likely that liberalism will win long term. How can Objectivism disagree with this?

Quite easily. Ayn Rand strongly believed and argued that the ultimate driver of history is philosophy, not politics. No political system can survive for any extended period of time which is not supported by the intellectual, cultural, and philosophical trends of its people. Simply put, the prevailing philosophy of a populace leads, and politics follows. Capitalism cannot survive in a nation without a supporting philosophical base that is well-articulated and accepted as true by the people of that nation. This was precisely what she spent her life trying to create and promote. There is only one way to get a capitalist government in America, or any other country, and that starts with a cultural and intellectual acceptance of the foundations of capitalism, not a military coup.

But with Communism, alternate ideas are often repressed by the government. Culture and intellectual activity are repressed. So capitalism cannot be accepted by any of the people because they won't know about it. Are you sure you wouldn't support fascists under such circumstances?

Btw, we still have Hayek as a sympathiser with dictatorship (liberal or not) too.

Edited December 24, 2012 by Kate87

[moralist]

Pure laissez faire capitalism I think is a utopia and is therefore not compatible with reality.

That's true. The moral ideal of totally unfettered Capitalism only works for decent Americans who govern themselves. For those who do not, there is government taxation regulation and litigation as deserved compensation for their moral failure.

This is because in the best case scenario, a sizeable minority of people would riot to protect the welfare state.

Look again... the moochers who fail to govern themselves and the public union looters who service their immoral demands to be served at the expense of others comprise the political majority. They're running the show now, because there are simply not enough Americans left in America.

This is because the welfare state is relied upon by people and does correct some real injustices in society.

It corrects nothing.

There is nothing more injust than giving the unearned to the undeserving.

This is nowhere more obvious than in completely liberal Democrat controlled California where the unholy alliance of moochers and looters have formed an unstoppable political force which now has the ability to vote their own wages benefits insurance retirement and disablilty. I look forward to the day when they collapse the government with their own unproductive dead weight.

Edited December 24, 2012 by moralist

[softwareNerd]

... ... in the best case scenario, a sizeable minority of people would riot to protect the welfare state. ... ...

This is the core of your argument (apart from arguing about what Mises etc. said).

People often claim that one cannot have an Objectivist society unless everyone is Objectivist. You're relaxing that condition, saying that one cannot have a Capitalist society unless nearly 100% were for it. And, you back this up by saying that the small, but sizable minority would riot. In a previous post you hypothesized that 10% of the population rioting would be enough.

I don't understand this. If you argued that one needs 51% of the population convinced, there may have been something to that (though history shows that it is not). However, instead of claiming that one must "convince the majority", you claim that one must convince a small but sizable minority. It's a pretty arbitrary assertion, with nothing to back it up.

By your logic, we only need to convince 10% of the population, because once we do, they would riot and therefore get their way!

[moralist]

This is the core of your argument (apart from arguing about what Mises etc. said).

People often claim that one cannot have an Objectivist society unless everyone is Objectivist. You're relaxing that condition, saying that one cannot have a Capitalist society unless nearly 100% were for it.

This implies a broader question: How do you live a good life in an evil world?

The solution is found in the inherent moral protection of doing what's right.

[Dante]

Btw, we still have Hayek as a sympathiser with dictatorship (liberal or not) too.

Two words for this, and the whole thrust of this thread: who cares?

This thread basically amounts to digging up obscure quotes from libertarian theorists to try to argue that they, personally, sympathized with some fascist regime or another. You start with the ridiculous bolded claim that "Unfortunately in every actual case of a respected economist arguing for radical capitalism, that economist also has sympathies with fascist dictatorships." You argue this from your sample size of three (which has since been whittled down to maybe one) and your uncritical reading of a singe Salon article, as it turns out. But these are not even your most significant errors.

This whole line of argument is fundamentally religious in its approach, and it shows the inability to focus on ideas rather than people. You try to take individual people (none of whom were actually Objectivists anyway) and attempt to discredit a philosophy by showing some quotes about their views on particular regimes. However, a philosophy does not stand or fall based on every single view of its advocates. That's a religion you're thinking of. For example, Jesus is claimed to have lived a sin-free life (which theologically is integral to whether or not he can save others), and therefore Christianity lives or dies based on whether every single word and action of his can be defended. Cults or governments centered around one person operate the same way. You seem to view systems of ideas through the same religious lens, but there's a problem; it doesn't work that way. Even if you had done your homework and gotten your facts right before starting this thread, it wouldn't matter one bit. You cannot discredit a system of ideas by pointing out flaws in the people that advocated them. So, I conclude with the same two words... who cares?

[Kate87]

By your logic, we only need to convince 10% of the population, because once we do, they would riot and therefore get their way!

If you can convince 10% of the population to riot, then yes you are a political force worth reckoning with. Note that probably 50% of America wants to see less government and less taxation but guess what? They are not rioting. Why? Because they are living the good life, pursuing values, and not living under tyranny. If you took away all welfare, a sizeable minority would suffer enough injustices to riot.

You argue this from your sample size of three ....

...

You cannot discredit a system of ideas by pointing out flaws in the people that advocated them.

As far as I know these three are the main respected economists who argued for radical capitalism. They all won Nobel prizes and they were all highly respected amongst their peers. You could include people like George Reisman or 100 other economists, but I would say they are in a lower intellectual league than these three. These three essentially influenced the development of the 20th century and beyond.

I think my argument can discredit their ideas because I am attacking the application of their own ideas to actual reality. In other words, the reality they inhabited included fascists and dictators - because they knew their capitalist ideas were unrealistic, they supported these dictators as a short term solution to stop communism. I think their application is an entirely logical conclusion of the ideas themselves and I wonder how Objectivism can reject the conclusions also?

I can reject dictatorships because I believe in democracy, but why would an O'ist reject a dictator that was spreading Objectivist ideas and ideals? Say a hypothetical dictator simply changed the law to make 90% of tax collecting illegal and punishable by death? On what basis could Objectivism fight this since tax is theft, and the dictator has just outlawed theft?

[softwareNerd]

If you can convince 10% of the population to riot, then yes you are a political force worth reckoning with. Note that probably 50% of America wants to see less government and less taxation but guess what? They are not rioting. Why? Because they are living the good life, pursuing values, and not living under tyranny. If you took away all welfare, a sizeable minority would suffer enough injustices to riot.

On the idea that 10% of the population will rise up to riot, you have nothing but your assertion. You make the marxist mistake of thinking that people have class ideologies. It is almost certain that most of the 10% who disagree will be very comfortably off. In the U.S. the states that have rich folk -- California, New York, New Jersey -- are much *more* likely to vote for welfare-statist policies. Anyhow, it's all fantasy and rationalization, with zero evidence or historical precedent to back it up.

BTW: You are wildly off base when you say that 50% or Americans want to see less government and less taxation. I'd guess a little over 50% might answer yes if they're asked such a question at an abstract level, but if you ask about the actual referents you'll find a completely different picture. Ask if government should allow gay people to marry, ask if the government should stop the drug-war, ask if social security should be privatized, ask if schools should be private, ask if subsidies should be cut back for the health-care of the poor and the old, and so on. You might find less than 10% who want government involvement reduced meaningfully in most such areas.