The Real Utopians

Often times, when one is involved in a political debate, or watching one on TV, there will be vigorous defenses of low regulated capitalism, where the government's only role is seen as to enforce contracts, provide police, and ensure a strong military exists. Many say that we have no alternative. Others claim capitalism is actually divinely inspired. Opponents of unregulated capitalism, or capitalism itself in some cases, are often derided as out of touch with reality. Human nature is clearly most geared toward capitalism, proponents say. Anyone who disagrees with the system is said to have an unrealistic dream of a utopia that can never be achieved due to a flawed human nature, whether that nature be such due to some sort of divine plan or because of natural properties is irrelevant. However, this charge does not hold. Human beings are capable of wonderful things, and the real utopians are actually believers in a low-regulated free market economy. They are utopians because they ignore monopolies, negative externalities, and also the way the market treats human beings like cogs in a machine that simply exist just to turn a profit. I will begin by providing a definition of what capitalism is, provide quotes from defenders, and then proceed to explain my reasons as to why free market defenders are the true utopians.

Capitalism can be defined as "the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and profits; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international markets."

There are numerous defenders of the system, so I believe that providing some quotes from the more intellectually sophisticated, and some not so sophisticated, will shed some light on why they believe pure free markets are best.

"I am in favor of cutting taxes under any circumstance and for any excuse, for any reason, whenever it is possible." -Milton Friedman

"Capitalism historically has been a very dynamic force, and behind that force is technical progress, innovation, new ideas, new products, new technologies, and new methods of managing teams." -Manmohan Singh

"Capitalism knows only one color: that color is green; all else is necessarily subservient to it, hence, race, gender and ethnicity cannot be considered within it." -Thomas Sowell

"Doing well is the result of doing good. That's what capitalism is all about." Ralph Waldo Emerson

"I am a conservative Republican, a firm believer in free market capitalism. A free market system allows all parties to compete, which ensures the best and most competitive project emerges, and ensures a fair, democratic process." -Sarah Palin

"The inherent vice of capitalism is the unequal sharing of blessings; the inherent vice of socialism is the equal sharing of miseries." -Winston Churchill
"In almost every other race of animals each individual, when it is grown up to maturity, is entirely independent, and in it's natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is vainf or him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favor, and shew them that it is for their own advantage to do for him what he requires of them." -Adam Smith

Now, why are defenders of capitalism the utopians? Why is it not the socialists or communists? The reason they are so is because what they say just isn't so! In fact, the evidence is against them. With poorly regulated free markets, monopolies and negative externalities are not constrained, and neither is the exploitation that can be exercised over one human being by another.

A monopoly is defined as "exclusive ownership through legal privilege, command of supply, or concerted action." In certain cases they make sense, such as with telephone or electrical companies, where it would not even be remotely practical to have widespread competition. However, there are cases of monopolies that are not beneficial, such as Standard OIl and John Rockefeller In both cases, government intervention is required to keep prices under control. Otherwise, the monopolies would raise their prices to ridiculously high levels, and as soon as a competitor entered, they would then lower them long enough to drive the person away, and then prices would raise again. Capitalism by it's very nature tends to a concentration of power.

"A negative externality occurs when an individual or firm making a decision does not have to pay the full cost of the decision. If a good has a negative externality, then the cost to society is greater than the cost consumer is paying for it. Since consumers make a decision based on where their marginal cost equals their marginal benefit, and since they don't take into account the cost of the negative externality, negative externalities result in market inefficiencies unless proper action is taken."

There are a plethora of examples that can be cited on this, the most obvious being climate change. However, there are two other examples,one that occurred 25 years ago, and had the potential to become deadly, and another that is still occurring today. The first is the the fact that human beings had created an actual hole in our ozone layer, which protects us from being exposed to levels of radiation that would substantially shorten our lives. The causes of this were chlorofluorocarbons, which are usually referred to as CFCs for short. They were found to be in common products, such as deodorant and cleaners. Government intervention stopped them from being used in the United States, and around most of the world, with the Montreal Protocol of 1987, and section 610 of the U.S. Clean Air Act.

Secondly, air pollution is also a negative externality. The effects are usually divided into short-term and long-term. Short term effects can be " irritation to the eyes, nose and throat, and upper respiratory infections such as bronchitis and pneumonia. Other symptoms can include headaches, nausea, and allergic reactions. Short-term air pollution can aggravate the medical conditions of individuals with asthma and emphysema." And long term, "chronic respiratory disease, lung cancer, heart disease, and even damage to the brain, nerves, liver, or kidneys. Continual exposure to air pollution affects the lungs of growing children and may aggravate or complicate medical conditions in the elderly." Market forces often do not account for this, and government regulations are needed to ensure there actually is clean air and water for people to drink and breathe.

So far, two examples have been show to support the point that government intervention is necessary, even for a free market to function. If pollution were to become too intense, people would not be well enough to work, and this would result in lost productivity. Also, if the hole in the ozone would have continued, the consequences would have been beyond dire. Now that the need for government regulation has been established, what about the way people are treated within capitalism itself?

Within capitalism, people are not seen as valuable in and of themselves. The market only sees them as a cog in a machine or a potential customer. They are only hired in order to make the company profitable, not to ensure survival or leisurely income. If a company downsizes, the CEOs and high-level executives are not ever on the chopping block. The entry level workers and middle managers are always the first to go. In fact, even with the recent bank bailouts, the CEOs still gave themselves giant bonuses, even though without tax payer money they would have completely failed.

With people dying everyday from starvation, preventable diseases, and lack of access to adequate medical care, I can see no moral justification for continuing to produce mass quantities of things so Americans can "keep up with the Joneses." Instead of having 20 different hardware stores, why not use American ingenuity to help the unfortunate, providing low priced goods and services to the needy. People are forced to go to jobs they hate everyday, simply so they can have income to survive. An existence that forces you to work in order to eat, thereby enriching a rich executive and making your life the more miserable, is not one that I can with good conscience support. Work should be meaningful, contributing to the community, nationally and internationally, and also give one a sense of pride in a job well done. When people are exploited for cheap labor, that simply is not possible.

In conclusion, defenders of poorly regulated free markets are the true utopians because they do not account for the enormous amount of evidence that is looking back at them. Without a strong national government to regulate monopolies and negative externalities (termed in official economic jargon "market failures"), the market would spiral out of control. The utopians also believe that if an individual will just work hard, they can be successful and rich. To this I reply with the question, who is working harder, the school teacher or nurse that has to work long, arduous, demanding shifts that never seem to end but are actually enriching the lives of their fellow citizens, or the likes of a Mitt Romney who simply made his money downsizing companies, and then playing the stock market? Only the utopian who says hard work is equivalent to financial success would answer that Romney actually worked harder.

In the words of Bertrand Russell, "Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate." Instead of unregulated free markets, government needs to play a major role to ensure workers are treated fairly and the environment is not destroyed. There also needs to be a paradigm shift, where people can enjoy their work, be proud of it, and also know that they are inherently valued by their employers (aside from just making a company more profitable), instead of just being seen as an entry level worker ripe for exploitation. That alone could change the world.