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Friday, August 8, 2014

Reviewing The Cultural Case For Capitalism Part 7 Of 12

In this week's episode of Jonathan Witt's A Cultural Case For Capitalism, Witt wants to answer the question of what Capitalism has done for us. And though he doesn't fully accomplish that task, he uses a sour grapes story to introduce the subject and makes at least one disturbing revelation about why he so favors Capitalism.

The sour grapes story Witt uses comes from Wendell Berry who is a neo-agrarian supporter. Berry is down on capitalism because of how his grandfather with his tobacco farm faired in a time when the American Tobacco Company dominated the scene by eliminating all competitors. Berry blames Capitalism via American Tobacco Company's monopoly for his grandfather's financial hardships because once establishing a monopoly, this company set the prices so low that Berry's grandfather could not make decent money from his tobacco crops. 

Witt wants to set the record straight that it was not Capitalism's fault. And though Witt makes a couple of valid points to contest Berry's claims, the direction Witt takes us is still unsettling. We won't go through his whole argument here, but we should note that Witt faults Berry for not protesting the product, which were cigarettes, being made. Rather Berry focussed on Capitalism. Witt faults Berry's grandfather's choices and the government for the grandfather's economic woes. This is because his grandfather's choice of crop to farm caught up to demand and the government instituted policies that hurt the market price of cigarettes.  

But Witt goes beyond that. Witt defends the monopoly and the profit policies pursued by the tobacco company. Witt wants to answer the question asked at the beginning: What has Capitalism ever done for us. He answers the question by describing how this particular tobacco company contributed to the economy. It contributed by producing an affordable product and by expanding tobacco farming in the region. So with results like that Witt asks, how could one fault either the tobacco company or the kind of capitalism it practiced?

We should note here that Witt has his own Wendell Berry moment of faulting the wrong thing. For while Witt finds fault with how Berry blamed capitalism and not cigarettes, he celebrates the establishment of a monopoly. This wrong, or at least inconsistent, for Witt to do. Why? It is because he believes in the free market and a free market relies on competition. But competition does not exist when a monopoly is in place--even Milton Friedman would acknowledge this. Thus, though a market for making cigarettes existed during Berry's grandfather's farming days, it wasn't a free market for the farmers. 

So it seems that having a free market isn't as important to Witt as he claims (he mentions "free market" in at least parts 1, 2, and 8 of this series). What is important is that business is in control of the market. This takes us back to our opening diagram (pictured below).


American Capitalism Today

By rejecting government, provided that Witt does not believe businesses should be run democratically, his acceptance of a business dominated market means that he is in favor of a business Elite Centered rule--and that rule is not just an economic one. And it appears that Witt recognizes the founder of the American Tobacco Company as having sole ownership rights of the company, since he found it, with no ownership considerations being granted to the farmers though they supplied the raw material for his business. Rather, according to Witt, these farmers are either to be grateful for the tobacco company doing business with them and expanding the number of farms, including the farmers who did not do well, or produce another crop. This, of course, provides further confirmation that Witt's views are in quadrant #3. And we should note that the further down in quadrant #3 one goes, the more tyranny will be practiced. In addition, the further to the left one goes in quadrant #3, the more wealth disparity will be seen (click here for the original explanation). This point about wealth disparity is what Berry is protesting in the first place.

But there is a more important observation to be made here. That observation revolves around the measurements Witt uses to justify a business or even economic system. To Witt, it is all about numbers. If a business or system is lowering the price of a product and expanding the number of employees, as the tobacco company referenced in this blogpost by Witt did, then no further questions are to be asked. We don't consider Berry's concerns about inadequate compensation for his grandfather's crops because Witt has already addressed them by blaming the farmers for their choices and the government for intervening. We simply look at the lower prices the consumers pay as well as the expansion in the number of tobacco farms. And to Witt, this is how Capitalism is to be judged. Capitalism is to be judged by the "prosperity" it brings to a select group of stakeholders.

Is it any wonder then that Martin Luther King made the following assessment about Capitalism while he was comparing it to Marxism and socialism? King said the following (click here for the source):
thus capitalism can lead to a practical materialism that is as pernicious as the materialism taught by communism 
When numbers, especially those related to consumption and wealth for some, are the only measurement used to determine the value of Capitalism, then King's analysis becomes inescapable. This is especially true because negative outcomes for non-select stakeholders are so easily swept away by the favorable numbers. This is when we are told no further questions are to be asked. The "no further questions" would concern themselves with fairness and morality for all stakeholders as well as show concern for the environment. But using just numbers, and carefully selected ones at that, is the standard operating method for many who justify and promote Capitalism. It isn't that numbers themselves which is the problem; it is that they don't tell the whole story.

This is the direction we are heading for with Capitalism. It is first Elite Centered where democracy is shunned in favor of control by the wealthy from the private sector. Then collective ownership rights are also spurned regardless of the inter-dependencies involved in a business or the economic system as a whole. Such a combination promotes both a wide wealth disparity and tyranny. And we will note that tyranny can come from the private sector as well as the public one. This is all done in the name of increased prosperity but for select groups. And as increased prosperity either trumps fairness and morals or makes them moot, materialism, rather than human values, become dominant in assessing systems. With all of that being where Witt is taking us, it is ironic that Witt, and others like him, claim to have the moral high ground over others who disagree. Then again, maybe it isn't ironic, perhaps it is just part of the necessary marketing Capitalism uses to retain customers despite the sounds of suffering and discontent.

 


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