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Always Right
Capitalism is Evil?
October 5, 2009
Michael Moore’s latest exercise in buffoonery, Capitalism: A Love Story, debuted last weekend with a disappointing (to Mr. Moore) $4.8MM take at the box office (according to http://movies.com/). Conversely, Zombieland took in $25.0 MM. I think this speaks to Mr. Moore’s serious disconnect from the average American. Ridiculing GM or blasting our health care system is one thing (and even those films had limited audiences); but when you go after the economic system that creates the majority of paychecks which support our families – you are going to have very limited appeal. You could spend hours pointing out the intellectual and editorial dishonesty in all of Moore’s films, but that is not my subject today.
So who are the folks that forked out some of their cash to see a great beneficiary of capitalism bash the system that has made him a very rich man (“filthy rich” in his own words)? I’m guessing they are mainly people suffering from both wealth envy and a complete lack of understanding of how various economic systems actually work. People like a journalist I spoke to last week who told me that capitalism was “inherently evil” and that corporations are “soulless”. This same journalist also apparently felt it necessary to make a comment regarding the type of car I drive as compared to his – not quite sure what he was getting at.
But here is the bizarre irony that hit me like a ton of bricks the other day: By and large, these folks who blast capitalism trust the government to cure all of our social ills. Surely government is at least as “soulless” as a large corporation. Let’s take a look at some of the key defining characteristics that differentiate our Federal Government and large corporations.
First is the area of representation. Corporations have Boards of Directors as their “governing” body. Every shareholder has the opportunity to vote for every director. And every shareholder has the ability to place proposals on the agenda for the Annual meeting – to be voted on by the shareholders.
On the other hand, there are 536 elected members of our government: 435 representatives in the House, 100 Senators, and our President (I am not including the Veep, as you vote for a ticket.). Each of us gets to vote for exactly four of these people: one representative, two Senators, and the President (and technically we are really voting for electors, not the individual). That’s less than 1% of our Federal Government – and not a single member of Congress is accountable to all of us. They are only accountable to citizens in their district or state.
OK, how about funding? Corporations have quite a challenge. They must initially raise capital from investors who believe in the products or services that will be offered, and are convinced that the company will be profitable. These folks invest their money in exchange for a share of those expected future profits, or the possibility of selling their shares at a gain. Corporations can also borrow money, but only if they convince lenders that they will have the cash flow to repay the debt. If they are unable to repay the debt as promised, they face consequences such as downgraded debt ratings (which result in higher borrowing costs) or even bankruptcy.
Our government has the power to levy taxes of various kinds. We either pay them or face dire consequences whether we like it or not (unless you are a member of Congress or a Presidential appointee – then you just apologize for the oversight). The government can also borrow money to fund operating deficits. In fact; the government can, and does, continually refinance it’s debt with more debt (because it doesn’t have the cash flow to repay it). If all else fails, the Federal Reserve can actually just print more money.
Now what about accountability? If corporations do not offer products & services that individuals or other companies want to buy, they are screwed. They go out of business and their investors lose their money.
Conversely, if our government chooses to offer programs & services that we do not want & don’t want to pay for; we are screwed. We do not have a choice. Sure, we may vote out a few members here & there; but it would be nearly impossible to undo the damage that has already been done.
Now I am not advocating any changes to the form of Government specified in our Constitution. In fact, I believe it is the best on earth. I am merely pointing out the lack of consistent, critical thought on the part of those who bash capitalism. No economic system has ever done more to elevate the overall standard of living of its participants (key word being participants). People that live in socialist or communist economic systems – wonderful places like China, North Korea and Cuba – really enjoy a wonderful standard of living that is the envy of the world, don’t they? Last time I checked, no Americans were risking their lives by attempting to float 90 miles south on makeshift rafts with hopes of reaching the Promised Land.
Sure the anti capitalists love to point at examples like Ken Lay (Enron), John Rigas (Adelphia Communications), and Bernie Madoff to boost their case about the evils of capitalism – but didn’t those guys all get convicted and go to jail? OK, Bernie plead guilty, but same result. There will always be dishonest, unscrupulous, unprincipled, and even evil people in our world. But just as the political freedom guaranteed in our Constitution carries with it inherent responsibilities & risks, so does the economic freedom that exists in a capitalist system.
The opinions expressed herein are solely those of the writer, and do not necessarily express the opinions of Flagler Focus.com, Connector Local, WNZF, Beach 92.7 FM nor the Flagler County Chamber of Commerce.
Michael Moore’s latest exercise in buffoonery, Capitalism: A Love Story, debuted last weekend with a disappointing (to Mr. Moore) $4.8MM take at the box office (according to http://movies.com/). Conversely, Zombieland took in $25.0 MM. I think this speaks to Mr. Moore’s serious disconnect from the average American. Ridiculing GM or blasting our health care system is one thing (and even those films had limited audiences); but when you go after the economic system that creates the majority of paychecks which support our families – you are going to have very limited appeal. You could spend hours pointing out the intellectual and editorial dishonesty in all of Moore’s films, but that is not my subject today.
So who are the folks that forked out some of their cash to see a great beneficiary of capitalism bash the system that has made him a very rich man (“filthy rich” in his own words)? I’m guessing they are mainly people suffering from both wealth envy and a complete lack of understanding of how various economic systems actually work. People like a journalist I spoke to last week who told me that capitalism was “inherently evil” and that corporations are “soulless”. This same journalist also apparently felt it necessary to make a comment regarding the type of car I drive as compared to his – not quite sure what he was getting at.
But here is the bizarre irony that hit me like a ton of bricks the other day: By and large, these folks who blast capitalism trust the government to cure all of our social ills. Surely government is at least as “soulless” as a large corporation. Let’s take a look at some of the key defining characteristics that differentiate our Federal Government and large corporations.
First is the area of representation. Corporations have Boards of Directors as their “governing” body. Every shareholder has the opportunity to vote for every director. And every shareholder has the ability to place proposals on the agenda for the Annual meeting – to be voted on by the shareholders.
On the other hand, there are 536 elected members of our government: 435 representatives in the House, 100 Senators, and our President (I am not including the Veep, as you vote for a ticket.). Each of us gets to vote for exactly four of these people: one representative, two Senators, and the President (and technically we are really voting for electors, not the individual). That’s less than 1% of our Federal Government – and not a single member of Congress is accountable to all of us. They are only accountable to citizens in their district or state.
OK, how about funding? Corporations have quite a challenge. They must initially raise capital from investors who believe in the products or services that will be offered, and are convinced that the company will be profitable. These folks invest their money in exchange for a share of those expected future profits, or the possibility of selling their shares at a gain. Corporations can also borrow money, but only if they convince lenders that they will have the cash flow to repay the debt. If they are unable to repay the debt as promised, they face consequences such as downgraded debt ratings (which result in higher borrowing costs) or even bankruptcy.
Our government has the power to levy taxes of various kinds. We either pay them or face dire consequences whether we like it or not (unless you are a member of Congress or a Presidential appointee – then you just apologize for the oversight). The government can also borrow money to fund operating deficits. In fact; the government can, and does, continually refinance it’s debt with more debt (because it doesn’t have the cash flow to repay it). If all else fails, the Federal Reserve can actually just print more money.
Now what about accountability? If corporations do not offer products & services that individuals or other companies want to buy, they are screwed. They go out of business and their investors lose their money.
Conversely, if our government chooses to offer programs & services that we do not want & don’t want to pay for; we are screwed. We do not have a choice. Sure, we may vote out a few members here & there; but it would be nearly impossible to undo the damage that has already been done.
Now I am not advocating any changes to the form of Government specified in our Constitution. In fact, I believe it is the best on earth. I am merely pointing out the lack of consistent, critical thought on the part of those who bash capitalism. No economic system has ever done more to elevate the overall standard of living of its participants (key word being participants). People that live in socialist or communist economic systems – wonderful places like China, North Korea and Cuba – really enjoy a wonderful standard of living that is the envy of the world, don’t they? Last time I checked, no Americans were risking their lives by attempting to float 90 miles south on makeshift rafts with hopes of reaching the Promised Land.
Sure the anti capitalists love to point at examples like Ken Lay (Enron), John Rigas (Adelphia Communications), and Bernie Madoff to boost their case about the evils of capitalism – but didn’t those guys all get convicted and go to jail? OK, Bernie plead guilty, but same result. There will always be dishonest, unscrupulous, unprincipled, and even evil people in our world. But just as the political freedom guaranteed in our Constitution carries with it inherent responsibilities & risks, so does the economic freedom that exists in a capitalist system.
