Friday, October 16, 2009

Keynesian Marxism has B.O.

I learned something very important at the ISI national leadership conference last Saturday.  (Okay, I learned many things, but here's the top seven).

1. The market is not immoral, but moral.  A business cannot survive in the long term if its owners' motivation is greed (e.g. the housing market and the "bigger sucker" theory).  A business succeeds by supplying you with something you want at a cost that allows the business to recoup their investment at a profit.  After the transaction, both the seller and the buyer are happier.
2. It's not "Government bad, business good."  If a business subverts the market and sets up a monopoly, it can do just as much harm as big government.  But that's not the market's fault: that's subversion of its principles.
3. We must know not only what is in the Constitution, but why it is in the Constitution.  Take private property for instance.  The modern American tends to equate private property with leisure, but the reality is that private property enables freedom.
4. Central planning cannot accurately predict the supply needed to meet the demand for pencils, let alone any other commodity.
5. A mixed economy cannot survive long.  It's a metastable state that will proceed either to capitalism or socialism.
6. Law sets up incentives.  When there is no corporate welfare, successful businesses continue and unsuccessful businesses fail.
7. Keynes' goal was to cap economic growth and redistribute wealth.

More on that last point: Keynes' ideal was not to stimulate the economy to increase production.  He and Marx believed that capitalists had produced enough.  No, Keynes and Marx (and now Obama's) goal was/is to redistribute the accumulated wealth.  Obama was quoted on the campaign trail as wanting to cap the growth of the GDP to a fixed and certain percentage.

This is a chilling idea, no matter what sector you try to apply it to.  Instead of nurturing a business, giving its owners and employees the freedom to increase their production, the thought is -- seize the capital!  Redistribute it!  This is devastating!  Everyone benefits when goods are plentiful and cheap.  And that's only sustainable when the company making those plentiful, cheap goods, is cutting a profit.  If the government stifles that company and forcibly removes capital from its owners, the plant will fail and all the employees and consumers who benefitted from that company will end up much worse off.

Another point.  I cannot believe that Marx, Keynes, nor Obama understand the importance of R&D.  Their satisfaction with the current state of production shows how vapid their vision is.  iPods and iPhones are within the reach of the average Joelina because Apple has thrived under the semi-free market system.  Such innovation is only possible because successful businessmen have had the capital to invest in new projects.  If you forcibly redistribute that businessman's capital, you can kiss innovation goodbye.  He will not be the only one to suffer.

When it comes to healthcare, the redistribution of capital is downright deadly.  Which country has provided the most healthcare innovations in the last century?  A socialized state?  Of course not.  The U.S.  Because of work done in the U.S., heart attacks are no longer treated with six weeks of bed rest.  As David Gratzer, author of The Free Market Cure, points out, any physician prescribing six weeks of bed rest for a heart attack patient would have their license revoked.  Oh no, my friend.  Because of the invention of stents, beta blockers, and other lifesavers, men and women can now survive even multiple heart attacks. 

There are other diseases which are not yet so immediately treatable.  Take stroke for instance.  Who will find the cure for this?  Who will have the capital they need to invest to try?

If Marxist/Keynesian thought had taken root before beta blockers were invented, heart attack would still be treated with bed rest.
If Marxist/Keynesian/Obamian thought takes root before stroke becomes treatable, will it ever be?

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