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Capitalism vs. Collectivism PDF Print E-mail
Commentary/Politics - Guest Commentaries
Written by Bradley Harrington   
Wednesday, 24 September 2008 02:22

Ayn Rand For decades, writers such as Friedrich Hayek , Ludwig von Mises , and Ayn Rand have been warning us that the mixed-economy "welfare" state is not a third alternative between capitalism and collectivism but is, instead, an explosive and unstable mixture that must, by the logic of the principles involved, become one or the other.

Intellectuals of the statist persuasion - and I use the word "intellectual" very loosely in this instance - have pooh-poohed such writers and their ideas, ridiculed them as alarmists, and smeared them as extremists. "It can't happen here" has been their stock response.

And yet it is happening here: Within the space of weeks, the federal government has (a) spent $200 billion bailing out mortgage concerns Freddie Mac and Fannie Mae; (b) spent $85 billion bailing out insurance giant AIG; (c) is now proposing to spend $700 billion more on picking up bad mortgage loans; and (d) is in the process of crafting far-reaching legislation to (allegedly) prevent these problems from occurring again. These actions represent the largest-scale intervention of the government into the economy since the Great Depression.

What is not being mentioned, of course, is that the entire mortgage meltdown is the result of the Fed's arbitrary and artificial manipulation of interest rates in the first place - and the fact that Freddie Mac and Fannie Mae were government-created concerns to begin with has been moved to the back burner as well. If there was ever a classic example of our chickens coming home to roost, this is it.

As the state of the economy quickly takes over center stage in the upcoming presidential election, what do our two major candidates have to say about it? McCain offered the thought that "there's got to be restructuring, there's got to be reorganization, and there's got to be some confidence that we've stopped this downward spiral," while Obama stated his opinion that "these entities are so big and they are so tied into the housing market that it's probably true that we have to take steps to make sure that they don't just collapse."

If the thought of the federal government "taking steps" and "reorganizing" the economy of the United States gives you a warm and fuzzy feeling, you might want to consider that Jimmy Carter, in 1979, "reorganized" a whole host of federal bureaucracies into the Federal Emergency Management Agency (FEMA) - and then consider FEMA's response to the Katrina hurricane disaster. Still feeling warm and fuzzy? Now picture that kind of response throughout the nation as a whole and not just Louisiana and you can begin to grasp the kind of trouble our "welfare"-state, mixed-economy politics have gotten us into.

The fact of the matter is that there isn't any middle ground between capitalism and collectivism. Any attempt to create one will simply lead to an ever-widening spread of economic dislocation and disruption as controls breed further controls - and, as the process accelerates, so does the rate of acceleration, until the entire shoddy structure is either repealed completely or collapses into authoritarian dictatorship.

The seeds of our current crisis have been decades in the making: the establishment of the Federal Reserve itself; the abolition of the gold-based dollar; the rise of transfer-payment "welfare"-statist legislation; the progressive income-tax rates that, after adjusting income for inflation, would have astounded our great-grandfathers; the national debt that, if stacked dollar by dollar, would reach to the moon and back. This is the root of the problem: not the manner in which we are regulating our economy, but that it is being regulated at all.

It is only by dealing with these root issues - in short, by scrapping the mixed-economy "welfare" state and snapping forever the link between government and money - that America will achieve a long-term solution to the economic woes we have saddled ourselves with. McCain and Obama, by touting bailouts and reorganization as the answer, have eloquently demonstrated that they have absolutely no grasp of the economic forces that have been let loose in our society today; thus, like a pair of blindfolded fools stumbling ever closer to the cliff, their contributions can be nothing more than screams and wiggles on the way down.

No, the only way the politicians will ever repeal the controls is if we, the citizens, call for it. We are currently in line for "free" lunches and welfare checks; we need to be demanding our freedoms back instead. Now that would be something to feel warm and fuzzy about. If you've come to believe you can do nothing to stop the advance of collectivism in America, I would encourage you to think again: Resources and options citizens can act upon are more readily available than ever. It's not as daunting as one would think. But it does require us to put down the remote control and act.

Next week: a primer on taking action in your own home county and state.


Bradley Harrington is a former United States Marine and a freelance writer who lives in Cheyenne, Wyoming.


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