Dear Editor,
(RE: Oct. 12, “Bush’s Inconsistent Ideologies”) Two weeks ago, Bob Payne wrote a column supporting state-run, socialized insurance programs. Payne also compared the opposition to socialized medicine (capitalists) to Mr. Burns from the TV show, “The Simpsons.”
I take issue with this comparison because it is a complete mischaracterization of capitalism. Recall the attributes of Mr. Burns. He’s a misanthrope – one whose existence is predicated on greed and the exploitation of others. Burns hoards wealth. Burns seeks to oppress the poor and disadvantaged, benefiting only at the expense of others. Is this an accurate representation of capitalism? No.
More accurately, capitalism is an expression of the most fair and efficient ways to allocate resources within and between economies. Capitalism is founded on a fundamental respect for individual rights. Capitalism seeks to better the lot of an economy and all of its members through long-term, real and sustainable economic growth. So what are some ways in which capitalism and socialism differ?
The first difference comes with respect to individual rights. Capitalism is based largely on the protection of the freedom of individual choice (a negative freedom). For capitalism to function, individuals must be able to choose freely between alternatives. Socialism, however, operates through statist actions which severely limit personal choice. When governments regulate what markets are available and at what price, there’s less choice. When governments take away income through coercive taxes, individuals no longer have as much choice in spending or saving the money they earned through working.
Socialism and capitalism also differ with respect to the modeling of governments. Capitalism posits that a limited government ought to exist to protect individual rights and to enforce a legal system. Government shouldn’t exist to support different groups through redistribution of wealth. This view is found in the U.S. Constitution and in the Federalist Papers. Socialism, however, advocates the redistribution of wealth through taxes and state-run economic systems. Socialism also favors the making of individual choices by governments (paternalistic legislation).
Another difference has to do with economic efficiencies. Capitalism asserts that free markets will respond to market changes the quickest, allocating economic resources appropriately. Free markets will also innovate the most rapidly expanding supply capacities over time and decreasing costs, making everyone better off. Because of the bureaucracy involved in state economic planning, government-run economies are slow to respond to changes in demand. This is why people in the Soviet Union sometimes waited in mile-long lines to buy toilet paper. Also, the inefficiencies related to serious economic planning will make everyone worse off.
It’s also important to note that the current U.S. economic model isn’t actually capitalist. We have heavy market regulation in some sectors, high and coercive taxes, redistribution of wealth, active monetary policies and a government which is sensitive to and supports interest groups. These aren’t capitalist policies. So if one has a problem with the current state of the U.S. economy, one ought to be aware that this isn’t a problem with the free market. Rather, it’s a problem of too much government interference in the economy.
So, I advise Payne that the next time he is looking to personify what really is capitalism, he would be better suited to use Bill Gates or Warren Buffett.
Sincerely,
Robert Swanton
economics junior
