Romney should defend the morality of capitalism … here’s an example

Lynne Kiesling

In the wake of the “you didn’t build that” discussions of the past few days, David Brooks writes

The Romney campaign doesn’t seem to know how to respond. For centuries, business leaders have been inept when writers, intellectuals and politicians attacked capitalism, and, so far, the Romney campaign is continuing that streak.

One thing is for sure. As Arthur Brooks of the American Enterprise Institute has said again and again, it’s not enough to say that capitalism will make you money. You can’t fight what is essentially a moral critique with economics.

Romney is going to have to define a vision of modern capitalism. He’s going to have to separate his vision from the scandals and excesses we’ve seen over the last few years. He needs to define the kind of capitalist he is and why the country needs his virtues.

Steve Horwitz’s speech suggestions for Romney address some of Brooks’ claim that the core issue is the morality of market exchange and institutions:

My opponent is right in saying no one does it alone.  He is wrong in thinking that is a condemnation of free markets and legitimately accumulated wealth.  Markets are the most extensive and profound process of human cooperation we have ever discovered.  The way to ensure that such cooperation continues peacefully and with mutual benefit is to allow people to try (and fail!) through the market to provide what others want and to keep the wealth they thereby earn, and to face the consequences of failure.  Free markets are human cooperation;  government redistribution is not cooperation, it is coercion.  The justification for the wealth earned in the market is not that people do it alone.  It is instead that allowing people to become wealthy by selling what others want to buy is the best way to ensure peaceful social cooperation and to improve the lives of the least well off.

Bravo. That is a vision of the morality of market exchange and market institutions that I share wholeheartedly.

But does Romney believe that? Do Republicans believe that? Is such a vision of market processes consistent with the policy actions and positions of either Republicans or Democrats, elected or voters?

I don’t think so. The major party duopoly members have demonstrated repeatedly that they are both parties of Big Government, separate branches of the Authoritarian Party, particularly taking into account their shared advocacy for the use of digital surveillance, drone strikes, and an imperial foreign policy. That shared belief in hierarchy and authority and control directly contradicts the moral vision of market processes that Steve lays out.

The cronyism is so ubiquitous and so embedded in the political process that neither branch of the political duopoly can articulate that vision credibly, and I doubt that either one actually believes in it.

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12 thoughts on “Romney should defend the morality of capitalism … here’s an example

  1. I am sorry that I cannot agree. Political campaigns are not philosophical debates. Most voters do not have coherent philosophies. Philosophical arguments will make their eyes glaze over. Arguments must be addressed to them in terms of deeply held beliefs in their communities.

    Here is a link to a Romney video responding to Obama:

    I think it is excellent. Obama speaks for himself, Mr. Gilchrist speaks for himself as the epitome of an American small business owner, and Mr. Romney speaks for himself. The sequence of pictures of and supporting words by Mr. Gilchrist is a pitch perfect refutation of Obama on the level of broadly shared and deeply held beliefs about family, labor, and America. It is rational in that Gilchrist’s words are statements of plain fact that support his conclusion. The emotion, and it is full of emotion, are carried by the images and the music.

    As for your philosophical predilections. Bravo. But please recognize that very few people are willing to contemplate a complete reconstruction of the American regime right now. In that sense, the overwhelming majority of Americans, as much as 3/4ths of all adults, are small c conservatives.

    We can see that the current regime is on the path to bankruptcy and dissolution, and if that were to happen, I would want to be on your side. But, the overwhelming majority of Americans want the President to steer the ship of state away from the rocks and back into navigable waters.

    Obama’s statement showed that he is committed to a transformation of the existing regime as radical as the one you would like, just in the opposite direction. That is why it could cost him the election.

  2. I saw that video earlier today and it is excellent. I would just note that such a strategy is as much a complement as a substitute for the type of speech I “wrote.”

  3. That is a good ad for Romney, but he’ll have to keep them coming. Especially, reinforcing the idea that investors seeking profits is what creates jobs. That the more capital available for workers to use, the higher their wages will be.

    It’s amazing how few people seem to realize that the reason Americans have such a high standard of living is the high amount of capital per worker we have. Demonizing the people who amass that capital isn’t a good way to encourage them to do even more.

  4. Gingrich and Dobbs were the most vocal that TARP, at a minimum, should be delayed.  Instead, the GOP flinched.  You can’t put the genie back in the bottle.  And, you can’t pretend that capitalism is less corrupt than communism and other such.  So even if Romney wins and then convinces some portion of the public that free markets are the best alternative, it is likely that the level of corruption and cronyism in capitalism will be exponentially higher because now we have proof that the supporting institution were built on phony trust.

    In capitalism, like-minded people are grouped to compete against other groups of like-minded people.  Financial crises occurred because the like-minded groups were aggregated and became indistinguishable within the duopoly.  We were all on the same side of the trade including banking CEO’s and Senators.

    The trick isn’t to find fools who will again blindly subscribe to the free markets rhetoric.  There are plenty of people who have short memories and creative ways of rationalizing the failures of recent past.  Instead, the trick is to find enough people who will take the opposite side of that trade and not get “aggregated” again.  Don’t give the former aggregators a second bite at the apple, at least not yet.

    The back of corruption and cronyism will not be broken so figure out how to move your group of like-minded people toward the top of the heap.  That’s capitalism.

  5. That’s not even close to ‘capitalism’, Krakow. You’re making the ages old error of making the perfect the enemy of the good.

    There are problems with a fractional reserve banking system (and shadow banking system), but the benefits of having one outweigh those problems. Far outweigh them. We’d all be living in log cabins and plowing our fields behind horses without the modern financial system.

  6. I would be the loudest to hail that constitutions, patents and central banks drive innovation and consumption. And I would have been happy to put my group of like-minded people in competition with your group of like-minded people to reap the rewards. But the logical option to compete with you was buried when Greenspan flinched. So now we are destined to again end up on the same side of the trade with corruption, not competition, taking center stage. Speculation and inflation bubbles have benefits but without competition, what is capitalism?

    “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.”

  7. That was a foolish thing for Greenspan to say. He should have pointed out that in the three decades since the end of the Volcker recession there have only been three recessions; two of them short and mild. In the preceding thirty years (1953-82) there were seven.

    If Greenspan had been still in charge in 2008 we might very well been spared the worst of this recession. If Scott Sumner is right, that is, that the Fed’s overly tight money policy is the major culprit.

  8. “That was a foolish thing for Greenspan to say.”

    Unfortunately, when faced with the greatest pressures of his life, Greenspan abandoned free markets. I remember asking others, “Now what?”. Given that the words from the Fed are so scrutinized I refuse to diminish what he said as simply being foolish. Greenspan is an idiot.

  9. The important part of that sentence was “Greenspan abandoned free markets”.

    Mickey Rooney happens to be greatest childhood actor ever. But you probably know that if you watched SNL.

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