Capitalism’s Terminal Condition

by Gordon Cooper

From Broader View Weekly, February 13, 2009

Whenever I see an old building that has shifted from its foundation and crumbled to a heap, I often ask myself: “Did the occupants sense the shift or notice the cracks while they were resting comfortably inside?” I wonder how subtle the movement was, and if there was ever a sudden motion that should have alerted them of coming doom. Well, folks, when the history books are written about the economic collapse that brought down the most advanced and successful economy in the history of the world, perhaps they will see a major crack developing in our foundation during the Spring of 2009.

Capitalism can trace its origin – among the thinkers who thought enough to publish their thoughts – to the pen of John Locke, whom, in the mid-17th century wrote some revolutionary things. To us, today, it seems so natural to believe that private property is an inalienable right. In fact, many textbooks will tell you that the original phrase in the Declaration of Independence was not: “Life, Liberty and the Pursuit of Happiness” – (although they are relevant to this discussion) – no, the original phrase, borrowed from the philosophy of Locke, was: “Life Liberty and Property.”

That revolutionary philosophy, which flew in the face of most hierarchical societies at that time, shook the world to its foundations. And friends, that particular building was long overdue for collapse. To think that a divine entity had endowed all men with equal political power, while not, as we will discover later, endowing them all with equal abilities and drives, was the engine that drove our forefathers to fight the fight for freedom.

I haven’t the space here to give a long, drawn-out history lesson about the virtues of capitalism. However, I do hereby challenge any reader – or my fellow columnist – to deliver to me the parameters of an economic system that has delivered more people from poverty and given more people a more luxurious life.

The structure that is capitalism rests upon a substantial foundation. That foundation is built upon the laws of nature itself: The law of competition, the law of demand and supply and the law of private ownership. To deny these statutes is like denying that water runs downhill. Now, we can artificially and temporarily alter the pull of gravity, but eventually, what goes up must come down, likewise with private ownership and supply of demand. Our government has, from time to time, altered the pull of the market and has subsidized certain chosen enterprises – usually to the detriment of that enterprise and the weakening of the economy. Just as we usually regret playing God with trying to alter the ecosystem by introducing or limiting certain organisms, we usually regret playing puppet master with the economy.

We can trace most of our current economic woes to just such an attempt. By pressuring the financial institutions to grant unwise and unsecured loans for housing, we set up a house of cards that was sure to tumble when the exaggerated home values collapsed under their own weight. Now, that same stable of donkeys is asking to have the keys to the granary so they can make more stupid decisions with our money.

To the terminal condition of capitalism – let me take you around back and show you a huge fissure in the foundation. This past week, our newly elected, and woefully inexperienced, president made a declaration that sent shivers along my spine and I swear I almost felt the earth shake. He mandated that a cap be placed upon the salaries of private citizens – in essence, he was saying that those in power have been endowed with superior knowledge and altruism and a greater sense of what ought to be. I’m sorry, but that is scary to me.

I remember reading the warnings of those, who only a generation ago, fought the idea of a minimum wage. They predicted that once the tent flap was left opened enough for the government to stick her camel-like nose into the private sector, she would soon decide a maximum wage as well. Well friends, do not think that that nose won’t come sniffing around your paystub also. It is easy to say that $500,000.00 is more than enough for those fat cats to live on.

We are opening a crack in our economy, people, and it will open even further with this non-stimulating stimulus bill.

The tendency of most inexperienced drivers is always to over-steer or over-correct when they are learning to drive. I see the same tendency here. We are looking only as far as the end of the hood, instead of focusing down the road. We should not fall for the fear tactics of “We cannot wait for a perfect bill – just pass this one and trust us”. I’m sorry, but I watch CSPAN and those guys do not impress me as being very trustworthy.

More to follow on this debate in coming weeks.