Sunday, August 05, 2007

A Partial Response to Green Cowboy

GC has asked two principle questions:

1: How close is the US economy (and, if you would like, the global economy) to "unrestrained capitalism?"

And can a socialist economy be successfully guarded against tyranny and centralization of power?

For the purpose of this exchange I will focus on the first question. Before I tackle the question of whether capitalism in the US is restrained or unrestrained we must first define capitalism. I think capitalism boils down to: A voluntary transaction between multiple parties. The transaction could be goods, services, time, labor, whatever you like, but it is voluntary. So to the question of is capitalism restrained in the US, clearly. There are any number of goods or services that our outright prohibited (marijuana, prostitution), for better or for ill. There are also any number of interventions that impede or otherwise dictate the parameters of a transaction. For example, say I would like to sell hot dogs in downtown Minneapolis. I go buy my cart, my hot dogs, some beers and whatnot and go downtown and proceed to sell hot dogs. Well, I could do so, but in all likelihood I would have to probably get some form of a business license or otherwise risk penalty. Or, when I seek employment, my employer, presuming it is a large employer, is by law required to offer certain benefits (health care for instance), when maybe I would prefer those monies in wages (I recognize that I am in the minority here). If you go to a bar in many cities the proprietor does not have the ability to allow you to smoke cigarrettes. The ability to do certain things on the land you own may be significantly curtailed by land use ordinances. If I decide to construct an office building to lease out, there are a myriad of health and safety regulations that I must comply with before I am able lease the building. When you go to the super market and buy sweets if you read the back you might notice that instead of using cane sugar, the manufacturer has used corn syrup or fructose, or to the extent sugar is used it is beet sugar. Well this is because a stiff tariff is placed on sugar imports (largely to shield beet sugar farmers from competition but also corn producers). I don't intend to argue here whether any of the above are good or bad, I am sure some of these interventions pay for themselves and then some where as others might range from the merely obnoxious to quite costly and destructive. All of that said, the U.S. version of capitalism, while much less restrained than others, boasts many restraints.


A Green Cowboy said...

Excellent. So - how significant are these restraints? If it's possible to infer Einstein's vision of "unrestrained capitalism" from that short passage, how close does the US come?

I'm not sure personally. I consider major tampering with the economy such as subsidies, antitrust laws, and tariffs...but even with those, it seems like the market is allowed to run fairly free.

A Green Cowboy said...

(I will be thinking about this as I return to my tent for the week)

xtrachromosomeconservative said...

I would say these restraints are quite significant as they impede millions of transactions daily. This is obviously not to say thay stop said transactions altogether (though in some cases that does occur) but they certainly raise the cost.

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