Everything You Love You Owe to Capitalism

Here’s an excellent speech by Lew Rockwell, President and founder of the Ludwig von Mises Institute.

As he says, people who detest capitalism implicitly pay homage to it by clamouring to buy the products it turns out. Everything you love – art, TVs, music, computers and so on – you owe to capitalism. The only way to find out precisely how much you owe to capitalism is to go and live in North Korea.

Ideas have consequences. When people strongly advocate something without fully understanding the consequences, people can die. Millions can die. Take Marxism for example. To take a less extreme example — people are dying right now in the USA because of the Food and Drug Administration’s slow and inefficient drug approval process.

Applying economics to international relations?

I’m not an economist. But both my father and cousin are economists, so from my conversations with them I have picked up a respect for the power of economics to improve the world.

Economics has penetrated into law and political science. However, one particular branch of politics - international relations - continues to make decisions based on hidden assumptions. The military-industrial complex in the US, for example, has persuaded politicians that a war half-way across the world is somehow a threat to American “national interests”. Benjamin Friedman wrote a brilliant article about the problems with such an anti-empirical approach here.

The ACTU: selfish then, still selfish now

Being self-interested doesn’t necessarily mean you’re selfish. Mother Teresa was pursuing her self-interest. And so is noted philantrophist Bill Gates.

In the case of the Australian Council of Trade Unions however, they are most definitely self-interested in a selfish way.

Trade barriers are unanimously opposed by all serious economists, and for good reason. A policy of free trade was proposed at least as far back as 1776 by the father of modern economics, Adam Smith, and it has been repeatedly confirmed through empirical tests since then.

But back in the 1980s the ACTU, ever resistant to change that would harm the financial status of its members, found itself on the wrong side of the issue. The ACTU, which had members working within the automotive industry, Textiles Clothing Footwear and Whitegoods, staunchly opposed tariff cuts (on the other hand, the mining and pastoral industries, which relied upon imported goods for their own production needs, wholeheartedly supported lowering tariffs).

So they were selfish about free trade, preferring to subordinate the interests of the greater majority of individuals to their own job security. Have they changed since then? Not at all.

These days they don’t protest about free trade as much, but they have diverted their selfishness towards minimum wages. The ACTU are experts at pretending they have the interests of the average Joe at heart. Unfortunately, they have consistently taken positions directly opposed to common sense and evidence.