Capitalist Overlords

It has been observed that if you truly want to turn your brain into pudding, spend some time arguing on the internet. While not strictly true (and even less literally true – your brain will not become a product hawked by Bill Cosby, no matter how much foolishness you subject it to), it is very likely that you will expose your mind to enormous quantities of inanity, inaccuracy, stupidity and deceit if you interact with other “netizens.” Yet not all on the Net is noise – there are rational and thoughtful people posting rational and thoughtful comments and observations. Such aren’t evenly distributed – you’ll find far more quality on certain news sites than you will on YouTube’s comment threads, for example – so being selective in what and where you read is certainly prudent. But from time to time it’s fun to delve into the muck, to see what nonsense is burbling therein.

One gem I recently came across was a bit of sarcastic condescension phrased as:

Bow down to your capitalist overlords.

This would be funny if it weren’t so ignorant. Unfortunately, when it comes to what “capitalist” and “capitalism” mean, ignorance is all-too-often the order of the day. Capitalist overlords is a contradiction, a non-sequitur, a meaningless confluence of two words. Trotting out Merriam Webster, we find this definition for capitalism:

a way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government.

Overlords are the government, even if one is broad with the term. The writer of the phrase in question clearly has a skewed and inaccurate understanding of what capitalism is.

Sadly, as I’ve discovered from (what some might say is excessive) perusing of the Internet, this misapprehension is far too common. While it’s easy and tempting to dismiss this sort of ignorance as par-for-the-course, there lies a real danger in its propagation. If things aren’t going well in the economy, and people mistakenly believe that the economy is capitalistic in nature, they’ll blame the principle of capitalism for things going poorly, dub it a failure, and cast about for alternate economic systems. The misapprehension and ignorance absolves the actual economic system we have and deflects blame from those actually responsible for the problems.

What is the system we truly have, if not capitalism? Many have dubbed it crony capitalism, a term that Wikipedia defines as

an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.

This is a fairly accurate if incomplete description of how this country operates. It’s incomplete in that it doesn’t directly note the treatment of non-cronies, although the inference is there (if you’re not a crony, you don’t get the favoritism, and thus suffer in comparison). Non-cronies (i.e. most small businesses and many large ones) tend to get the short end of the stick. Government regulates them, often under the pretense of protecting the public, more and more every year.

Businesses and economic transactions are heavily regulated in our economy. Yes, we are considered mostly free in the economic freedom rankings (we are currently 14th, with Hong Kong at #1), but a ranking that’s relative to other nations isn’t an actual measure of economic liberty. Try engaging in any sort of economic transaction by the book. Even if your side of the transaction is what you might consider totally free, i.e. you pay cash for a good or service (and exclude the restrictiveness of government issued fiat money for the moment), the other side is certain to be controlled by a tome’s worth of rules and regulations (not to mention that in many cases your transaction is taxed by the government). None of those rules and regulations fit into the proper definition of capitalism, because to own something is to be able to do with it as you wish, as long as you respect that which others own (i.e. a free market with property rights). Nor does crony capitalism, since it involves significant government control of the rules of transaction.

“Crony capitalism” maligns the word capitalism, and for that reason I’ve eschewed the phrase in favor of the simpler “cronyism.” We could also call our system economic fascism, although that particular “f” word is heavily loaded with other historical significance. Some have used the term corporatism, and back in the 1930s, when the principle came into vogue not only in Germany and Italy but in the United States as well, some called it planned capitalism.

We don’t have capitalist overlords, but we do have economic overlords of various sorts. The person who offered up the phrase likely was referring to big corporations and their CEOs, putting forth the notion that they are the real power in the nation. But even if true, even if one takes the notion to a tinfoil-hat extreme and presumes that there’s a “star chamber” or covert Bilderberg group running the world, “capitalism” has nothing to do with it. It is incorrect to presume that private ownership of industry exists only in a capitalist economic system. Capitalism requires freedom from government coercion and meddling, and this doesn’t really exist in the world (though Hong Kong comes pretty close, from what I understand). Of course, there’s no system that’s purely and fully implemented, nor will there ever be one. Even a completely capitalist state would inevitably have some laws that intersect with economic transactions, and even a fully communist state would have some sort of currency. But, if we are going to seek to lay blame on a system as the cause of our economic troubles, we should determine the prevailing component of our system.

Many point at the financial melt-down in 2008 as a failure of capitalism and the result of deregulation. Yet at that time the financial industry was both massively regulated and deeply intertwined with a government that actively manages the money supply, interest rates and just about every aspect of transaction. If things fail under such an arrangement, the blame necessarily lies at the feet of regulators i.e. the government. The years since that meltdown and the beginning of the Great Recession have seen massive government involvement in the economy. Hundreds of billions of tax and government-borrowed/printed dollars have been spent by the government as an attempt at “stimulus.” Regulation after regulation and rule after rule have been piled on the economy. Major private-sector decisions have been subject to government approval or disapproval, the former often with long lists of demands and mandates. It’s impossible to deny that government is deeply enmeshed in our economy, and that involvement grows greater every year. So, how can we blame “capitalism” for the fact that the economy is, to be generous, sluggish? We cannot. Capitalism has been beaten down and replaced by cronyism/corporatism/fascism/planned-capitalism, a system that may retain the superficial “private ownership” element, but is grossly different from actual capitalism. Besides, do you really “own” something if your ability to use or sell it is so heavily restricted by the government?

Capitalist overlords is a nonsensical phrase, uttered by an ignorant or stupid person. It is certainly impossible to correct the sum total of ignorance in the world, but we can at least challenge the ignorance and stupidity when we are confronted with it. Capitalism isn’t a panacea, it won’t produce utopia, and one will find unfortunate outcomes even in a purely capitalistic system, but blaming capitalism for the current state of things is grossly incorrect. Allowing that blame to remain absolves the true culprits from deserved blame and discourages the sort of correction (i.e. moving things towards a more capitalistic system rather than away from it) that’s needed.