January 26, 2012 by galudwig
Some 2500 of the world’s most powerful people are gathering today at Davos to discuss the future of capitalism at the WEF. While there were some very faint glimmers of hope of business and political leaders at least ostensibly proclaiming to support the market economy, most of the talk so far has been nothing short of disheartening and even disgusting.
Beginning on a somewhat positive note, Bill Gates, on BBC’s Radio 4, described capitalism as “a phenomenal system that has improved humanity like no other”, right before begging legislators to tax him more –even though he is free to send the state any amount of money he wants without having to resort to asking bureaucrats to take it from his, and others’, pockets at gunpoint. Nevertheless, I for one appreciate Gates’ willingness to support the system which has given us so much, even in a severely crippled state, yet is, mystifyingly, so ridiculously unpopular with both the masses and the elites.
But let’s see how the other geniuses who are doing all the talking at the WEF are looking to debate the merits and demerits of the capitalist system.
Professor Klaus Schwab, CEO of the WEF:
Capitalism in its current form no longer fits the world around us.
And I, and most libertarians, would agree 100% with this statement! Unfortunately, for reasons which are diametrically opposed to one another, because he goes on to say things like:
We have failed to learn the lessons from the financial crisis of 2009. A global transformation is urgently needed and it must start with reinstating a global sense of social responsibility.
We must rethink our traditional notions of economic growth and global competitiveness, not only by focusing on growth rates and market penetration, but also, equally — if not more importantly — by assessing the quality of economic growth.
How sustainable is it and at what cost to the environment? How are the gains distributed? What has become of the family and community fabric, as well as of our culture and heritage? The time has come to embrace a much more holistic, inclusive and qualitative approach to economic development.
The success of any national and business model for competitiveness in the future will be less based on capital and much more based on talent. I define this transition as moving from capitalism to ‘talentism’.
Social responsibility? The “quality” of growth? Sustainability? Distribution? Culture and heritage? Holistic? Talentism? This stuff would be hilarious if it came from an Occupy-leader, but it’s just plain sad and pathetic when it’s coming from the mouth of the leader of what supposedly is one of the world’s primary defenders of capitalism and free trade.
A clue of this guy’s real convictions can be found in this quote from his essay in the book The business of changing the World:
The key to sustainable capitalism is reasonable profits as opposed to maximizing profits.
Uhuh, and I’m sure Prof Schwab thinks himself uniquely qualified to distinguish “reasonable” from “unreasonable” profits.
Anyway, back to the WEF. Not only business leaders, university professors and political statesmen are invited to the Forum. Apparently, union bosses get their say too. The chief of the International Trade Union Confederation Sharan Burrow for example talked of losing “our moral compass”, distinguished between US & Europe’s model of “laissez faire capitalism” (HAHAHA) and China and Russia’s “state capitalism”, seemingly preferring the latter, and went as far as saying “We must redesign the model. We must reset it. Stop the greed.”, while calling for minimum wage legislation which would inevitably throw those workers who need it the most out of a job.
Now, again, it hasn’t been all bad at the WEF so far. David Cameron paid some lip service to the free market and urged more “free trade deals”. Now, even though I’m not sure why states have to make “free trade deals” with one another because all that states need to do to encourage “free trade” is to get the hell out of the way, but at least it’s better than most of the crap that’s been coming out of the WEF so far.
The worst thing, though, is that these people are generally considered to be the defenders of capitalism and the representatives of free market activism, whereas, obviously, they are not. In the pages of these blog posts, I tend to talk about the same thing a lot. But, because it is so important for the future of society, and because almost everyone in the world, including –especially?– those who are generally thought to be champions of capitalism, either deliberately or out of ignorance, completely misrepresents the nature of capitalism, and then uses this misrepresentation as a pretext for changing the system for the worse, I feel I must repeat certain things again and again.
1. Western capitalism as it exists today is NOT “laissez-faire”! Rather, it is what can be called a “mixed system”, but in reality is a hampered market economy, and has contained within its fundamental doctrines inherent contradictions which cause it to be doomed to fail.
2. Many/most of the problems commonly associated with “unhampered/laissez-faire/unbridled” capitalism –which doesn’t exist today– are in actuality the result of previous government interventions in the economy.
3. Additional interventions, designed to “solve” existing problems will only create further complications and “unintended consequences” which will require further interventions still, with the process only ending with either the collapse of the market economy –the engine of all progress and innovation– or the complete socialization thereof.
4. An “intervention” is much less innocent than it sounds. There are no ways of “tinkering” with the economy, there are no dials or buttons which can “fine tune” it. The only method by which government can achieve any of their objectives is brute force and the threat and actual use of violence.
5. The “market” is not some mechanistic force which “automatically” tends towards “equilibrium”, regardless of human considerations. We, the people, we, the actors who seek to improve our own conditions, we, the consumers who, by our decisions to buy or abstain from buying re-evaluate and redetermine the price structure at every moment that passes, we are the market. Any intervention with the “market outcome” is necessarily the undemocratic and dictatorial because it denies the validity of the natural outcome of voluntary interaction of free individuals and aims to put in its place one particular person, group or party’s ideas of how society should be organized, regardless of whether their subjects agree or not.