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August 25, 2011

Three Myths about Capitalism

H/T Greg Mankiw.

Posted by Tom at August 25, 2011 12:01 AM |

Comments


Very interesting and thought-provoking. I would like to hear him identify actual, specific things that, in his opinion, the government has done, that
harms capitalism -- other than TARP etc.

All that said, his thoughts are definitely
compelling. and I'm you posted the presentation.

Posted by: Bill McWilliams Author Profile Page at August 25, 2011 5:23 PM

What Mr. Mankiw says is "technically" correct, I think. However, he studiously avoids talking about the political pressures that come to bear on players in "capitalism". Yes, the fact that there was regulation that allowed for an overheated economy to develop, that allowed for high risk investments to happen, those regulations were done by government. What he doesn't say is that the very capitalists (elites, wealthy, ruling class)that made those risky investments are the same ones who bought the congressmen who passed the laws that allowed them to make those risky investments. See how it works?

He is technically correct that "talent" and "hard work" are often rewarded by capitalism but that is only part of the story. The very nature of capitalism is that the rich get richer and the poor get poorer. There are lots of smart hard working people who, because they have family responsibilities or poor health, (or didn't have rich parents or armies to steal other people's land)have not been able to accumulate the capital they need to stop working a day job and start investing. Sure, a few do, but many more, despite their best efforts can't get there. He refers to people who have been "unlucky". Seriously? Were Native Americans just "unlucky" to be located where White folks wanted to be? Something tells me there was more to it than just bad luck. I think it is just plain willful ignorance to talk about capitalism as if it exists in isolation from society at large.

I think Mr. Mankiw must think it's pretty cute to throw out these "truths" with no context at all. It is like me saying that the fact that my feet stink isn't my fault - they got that way naturally - how can I be held accountable for something I have no control over. Willful ignorance - See how it works?

P.S. I worked at the Kennedy School of Government as a secretary in the 1980's. I was a secretary and a union organizer for AFSCME. Believe me, I heard a lot of this amoral malarky when I was there.

Posted by: A Facebook User Author Profile Page at September 5, 2011 7:48 AM

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