Capitalism, Vulture Capitalism, Crony Capitalism, Fascist economics, Free Markets
Economic Darwinism or Free Markets?
Comments | Print friendly | Subscribe | Email Us
According to George Will:
“Newt Gingrich—the friend of his detractors, to whom he offers serial vindications—provided redundant evidence for the proposition that he is the least conservative candidate seeking the Republican nomination. He faulted Mitt Romney for committing acts of capitalism.”
Will is not alone; a cacophony of conservative voices, led by Rush Limbaugh and others, are roundly thrashing the Gingrich campaign for the attack ad posted by his PAC against Mitt Romney and his involvement in Bain Capital. The complaint is that this is a move to the left, a criticism of capitalism itself, one more befitting a Democrat than a friend of the market.
But is it?
Bain was a company that purchased “distressed” businesses and either turned them around or liquidated them. Sometimes referred to as corporate raiders, companies like Bain engage in “constructive destruction” as it has been termed, laying off workers, dismantling wasteful projects, and often simply liquidating assets for the purpose of making a profit. It is not illegal, and is a normal business practice in the modern market system.
The Gingrich people referred to it as Vulture Capitalism.
And so many on the Right got their tail feathers ruffled at this attack on capitalism itself.(After all, the Obama Administration can handle that chore nicely.) But what do we mean by capitalism?
Guess who made the following statement:
“Capitalism is that form of Communism in which the organising officials have a very large salary. That is the difference; and that is the only difference. Both presuppose property not personal, but Worked from a centre and distributed as wages. There is a third ideal; or rather a second. It is that individuals should own and be free.
The right and essential thing [is] that as many people as possible should have the natural, original forms of sustenance as their own property”
Who said this? Was it Barack Obama? Van Jones? Cass Sunstein? Some OWS protester?
No, it was G.K. Chesterton.
Chesterton was opposed to Capitalism as we understand the term today. He was not opposed to free enterprise, but to the big megacorporate system, the partnering of government and giant corporations. He hated what we today call crony capitalism, or what used to be referred to as Fascist economics. Chesterton believed in what he called Distributism. He thought as many people as possible should own as much as possible, and that the backbone of free enterprise is small business.
And with ownership comes responsibility, according to Chesterton. One does not enact predatory practices like pressuring companies that are hurting, buying them out, then closing them for a profit. Yes, it is legal, but is it ethical?
I suspect Chesterton would agree with the Gingrich camp’s criticisms of Romney, although he may disagree with their style and perhaps their wisdom. Nobody could conceivably call Chesterton a Leftist.
Which is why this recent move by many Conservatives to condemn the ad is wrong-headed. One could rightly condemn it for tactical reasons, but make no mistake about it; the Democrats were planning this very move. In some ways, getting this out now is a huge benefit to Romney; it will be old news by the general election. But come out it will; better now than later.
And it IS a valid criticism. Corporate raiding may be legal, it may be playing by the rules, but it may lack a certain degree of ethicality,, Also, this particular case suggests Romney’s job destroying ability may be greater than his creative powers. It is NOT an attack on free markets. If anything, it is an attack on the type of brown-shirt capitalism that emanates from the Democratic Party and the Obama Administration. What Gingrich’s people are saying is that Romney is more one of them, more a George Soros, than one of us. If we cannot criticize Romney for this then we cannot criticize George Soros for crashing national economies, hurting millions for his profits.
We hold standards all the time. A strong man who beats up his girlfriend is considered lower than scum. A robber who mugs a little old lady will catch hell in prison from the other inmates. Why? Because there is still a sense of unfair advantage, of using your power to hurt those who cannot defend against it. Yet we are to dismiss this sense when it comes to economic activity? Chesterton didn’t agree. There are codes of conduct. It is not attacking capitalism to attack abuses by individuals or companies in the market. How else do we keep everyone in line? People know where the boundary lines lie. Other people are the only market forces to keep the unscrupulous within those lines. Profit is one way people do that; the unscrupulous lose money by crossing the line. But societal disapproval is also a mechanism for disciplining the market. (Consider the Better Business Bureau and the power it wields.) The market is, after all, We the People.
The only other option is to impose the force of law. That is the way of the statist.
And Rush Limbaugh, who has been out front on this, has completely forgotten his own defense of Rick Santorum on charges of “Big Government Capitalism”. Limbaugh elucidated the difference between traditional Conservatism and it’s modern Libertarian incarnation:
“In certain things, conservatives actually do like a big government. For example, conservatives do want an activist government defending what’s right and attacking what’s wrong.” Big government may not be the term, but, for example: Conservatives do think that it’s the role of government to protect the sanctity of life, as does Rick Santorum. If government doesn’t, who else will? And it stems from our founding documents: Life, liberty, pursuit of happiness. The Declaration of Independence.
Clearly the government has a role here in defending life. If they don’t, who will? Also, the government should be used effectively to fight crime. Conservatives are all for, for example, the government fighting illegal immigration. Now, is that big government or is that responsible government? Big government is being misused here when applied to Santorum. Big government as it’s used today means welfare state, and Santorum does not believe in a welfare state. So the left is playing a rhetorical game here, folks, and I want to alert you to this. “Big government” has a specific meaning today, and it means welfare state. It means redistribution. It means high taxes. It means command-and-control of the economy. And that’s not what Santorum believes. So the left knows that “big government” is a negative. It is a harmful term to attach to somebody, and that’s why they’re trying to attach it to Santorum. But Rick Santorum does not believe in the big government of Barack Obama. It’s totally different thing for him.”
And yet the only thing the Gingrich camp is doing is chastising Romney for callousness and bad behavior. They are NOT demanding a government investigation. They are NOT demanding new laws or regulations. They are NOT seeking to prosecute anyone. If Santorum’s “Big Government” views are Conservative, why isn’t the Gingrich view that, yes, ethics have a role to play in the economy?
If we are unwilling to verbally address what may be unethical business practices by corporations, we are no different from the Left that refuses to address unethical governmental practices because their philosophy is officially pro-government. Both are equally onerous.
We should defend the free market with all of our strength; it is one of the fundamental building blocks of liberty. But that does not mean we defend every practice in that market.
Chesterton opposed economic social Darwinism; he did not oppose the free market.
Chesterton was roundly criticized by many for his notions of Distributism, because they presupposed a moral people; there were no disciplinary mechanisms built into this economic model. But the same is true of liberal democracy; the American Experiment presupposed a moral voting public. The Founding Fathers understood that America would fail should the public lose it’s sense of morality. When people stop governing themselves they have to be governed by force of arms. The same is true in an economic system. I don’t think that what the Gingrich people did was smart because of the timing, but I don’t think it was necessarily wrong, either.
I suspect G.K. Chesterton would agree.
Thanks to Jack Kemp for some excellent suggestions.