by Karl Denninger
“The Socialist party, like so many others, misdiagnose what's missing in America and why what ails us has come to pass. The problem is not, as they complained then (and people complain now) that Capitalism is defective. To the contrary; Capitalism is what allows a man to rise from nothing to wealth. To land here on the shores of America with a pair of threadbare pants and an old shirt, yet become a landowner and prosperous. To suffer the ignobility of poverty and crime as a child, but rise above it and start his own business.
But Capitalism comes with the risk of failure. Under Capitalism when banks make bad loans, they go out of business. Under Capitalism when you make a bad investment you lose money. Under Capitalism when a factory makes a product nobody wants to buy, or which is too expensive, it closes. Under Capitalism when labor prices itself out of the market the firm makes no profit and everyone gets laid off as the company goes bust. And under Capitalism if you choose to sit on your ass instead of being industrious to at least some degree you will eventually starve and die.
Plutocracy knows no such check and balance on behavior. When Plutocrats make bad loans, they get the government to bail them out at taxpayer expense and the bank gets even bigger. When Plutocrats take shortcuts drilling for oil, the people are barred from lawsuits against them to recover the economic damage they do to those who have oil spilled on them. When Plutocrats intentionally debase the currency they are patted on the back and called heroes, while another man who is not a Plutocrat goes to prison for challenging their oligarchy. When Plutocrats concoct and sell worthless securities on purpose they keep the loot while those who they ripped off are rendered penniless. When Plutocrats lie about the intent of their laws they get campaign contributions and use them to drown out dissenters while gerrymandering districts to prevent meaningful opposition in the political process. When Plutocrats file 150,000 bogus affidavits they are not indicted for 150,000 felony perjury counts and instead "negotiate" for a "settlement" allowing them to keep the bulk of the profit from homes they effectively stole and resold. When Plutocrats hire someone to break into an occupied home and terrorize the woman within they are not arrested and charged with felony breaking and entering into a dwelling; they at worst get a scolding.
When Plutocrats shoot a woodcarver who's only offense is taking more than 2 seconds to respond to a command, or a helpless child sleeping on a couch in Detroit, they are not charged with homicide; they call these acts an "accident" where if you, an ordinary citizen, had a similar "accident" you would go to prison. When Plutocrats run over a bicyclist and flee they are charged with a misdemeanor; an ordinary citizen committing the same crime does 20 years in prison for felony manslaughter. When Plutocrats conspire to bribe officials on sewer contracts your sewer bill goes up 500% and they keep the money they stole; the hapless few officials who are not Plutocrats but were dumb enough to conspire with them go to prison.
When Plutocrats allow 2,000 guns to unlawfully be shipped to Mexican drug gangs and one of them is used to kill an American nobody goes to jail, where if an ordinary citizen sells one gun to a convicted felon they do ten years of time in federal prison. When Plutocrats launder drug money for Mexican Gangs, they pay only a small fine and consider it a cost of doing business. When Plutocrats admit (twice) to committing a felony in the marketing of drugs that may have put thousands at risk of death they again pay only a fine, rather than facing a negligent homicide charge for each person who died as a consequence and aggravated assault charges for those who did not.
The solution is not Socialism, for that political system is simply Plutocracy on steroids. Reduced to common control of the means of production for the alleged common good government becomes even more corrupt. Power in Socialism does not descend to the worker nor is it democratic, as was proved by Soviet Russia and countless other examples over the last two hundred years. Rather that power vests in a handful of government officials, just as it does now, but with even more right of enforcement than we have today. Those who dissent are simply carted off to Siberia or given a drink spiked with Polonium and die in radioactive agony.
The solution is in fact Libertarianism. That is, actual Capitalism and The Rule of Law. Under that system you have the right to control your own earnings. Your money is sound and can be stored or deployed as you see fit. It is not stolen through intentional debasement and perversion, nor taxed away without your consent to fund wars that are undeclared for purpose of propping up this dictator or that, or is it given to those who refuse to labor for their own benefit. Those who commit wrongs are forced to face the music and pay for their crimes, whether that crime comes at the barrel of a gun or occurs on a drill rig where a corporate decision to cut a corner was made and resulted in economic harm. Those who make bad loans go bankrupt, and those who knowingly sell bad loans to investors go to prison, as all forms of theft are equal under the law and punished accordingly. Laws forbidding you to engage in consensual conduct between adults do not exist, as a Libertarian government recognizes that as an adult person you own your body before all else, and that the government's right of interference does not begin until you swing your fist within reach of another. At the same time theft and fraud are considered only upon the amount stolen or harm done without regard to the tools employed; the man who steals a million dollars with a briefcase faces the same sentence as one who prosecutes his theft using a gun.
It is true that we cannot find solace under either Democrat or Republican parties today, but that is not because Capitalism is at fault. It is because we do not have Capitalism. Today we have Kleptocracy, where the Plutocracy does as it wishes irrespective of alleged laws on the books that are enforced with vigor against everyone else. To resolve this dilemma we cannot turn further toward that which is broken. Socialist "democracies" are nothing more than a means of fatting up the sheep so the few wolves in Washington can have a more-fulfilling dinner.
It is Capitalism and Libertarianism that teaches us that all men and women have the fundamental right to ownership of oneself. From this right flows the right to self-defense and the right to ownership and defense of private property. Upon that base the public naturally builds capital formation and industry without the need for coercion or protection. The motive of profit and even greed is not bad, it is good, provided that the actions taken thereupon comport with the rights of others. Unbridled greed that manifests in theft and coercion is wrong and is punished, while that which manifests in invention and prosperity lifts those who put their effort, whether by mind or hand, into industry and find honest wealth by their own acts.
That is what our nation was founded on. It is also what our nation has lost. If we are to regain that which we lost, we must have an honest exposition and debate on what has happened, how we can correct it, and how we will force those who have brought this ruin upon our political and economic systems to be held to account.”