The French model

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Ed Archer's picture
Ed Archer
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 225
The French model

The title pretty much sums it up, how are the French doing in this world economy?

http://www.truthdig.com/report/item/20090516_as_smash-and-grab_capitalis...

I wonder if Americans will change the name back from "freedom fries"? :D

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: The French model

The viewpoints expressed in this article are examples of the worst possible fall-out this crisis could have, and that is that popular opinion arrives at the conclusion that the crisis is a result of capitalism and that somehow, French or any other type of socialism is the answer. 

It is easy for capitalism's naysayers and pundits to thumb their noses at American-style capitalism at a time like this.  And they do seem to be thoroughly enjoying it. 

What these viewpoints do not take into consideration is that Hayek, Popper, and Schumpeter, would have been appalled at the extent to which capitalism in America was abandoned, decades ago, and somehow was still considered "capitalism", and would have to laugh at the very thought that what we have here today is a "failure of capitalism".  Based on their concepts of a free and just society, what we have here today is a failure due to the very abandonement of capitalism, not the exercise of it.  Capitalism, as defined by these and other men, most notably Von Mises, cannot function without sound money, which we did away with long ago.

And while sound money is probably the defining common element between what these men envisioned that is lacking in our society, the size, scope, and power of our centralized government would have to be a close second on their list.  Centralized pension and medical care ponzi schemes (which consume well over 50% of our annual budget and will soon be unfundable) are not inventions of capitalist thinkers.  They are the sole inventions of the socialists and the communists.  State-chartered mortgage-purchasing companies are not remotely allowed within the philosophical and economic frameworks of these thinkers.  Only socialists could come up with things like Freddie Mac and Fannie Mae, which are two of the main culprits behind the artifical demand for mortgage assets that led to the housing bubble.  Only socialists could conceive of regulating agencies with names like The Department of Agriculture, The Department of Energy, and the Department of Housing and Urban Devlopment, among others, whose power reaches accross every state and into every county. 

The American system has failed, I'll give them that.  If people like this writer think that is Capitalism, they should read the works of the people they quote in their articles.

 

 

Ed Archer's picture
Ed Archer
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 225
Re: The French model

So, you are saying the problem with American capitalism was that it was too socialist??

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: The French model

 Zombie,

Our system, at least the one that just collapsed, was "capitalist" in many ways, but violated basic tenets of capitalism in some very profound, and as it turns out, fatal ways.  First and foremost is the fraudulent monetary system we have been using since the end WWII (and which only got worse after the end of the GS in 1971).  There is nothing lassie-fare about the government being a price-fixer, especially when we're talking about fixing the price of the very medium we use for money.  And, there is nothing "free-market" about licensing a banking cartel to control the creation, lending and leveraging of all money.  This alone disqualifies this system as "capitalist" by definition.  Yes, we've had free-markets in many areas, but they were all built upon and functioned within a money-supply framework that is anything but capitalist, and in fact led to the debt bubble whose final collapse we are all now witnessing.

It doesn't end there.  Our central government has grown to a size, and acquired powers far beyond anything which the "founders" of capitalism mentioned in the article would ever endorse.  These intrusions by our government distort markets by creating inefficiencies, artificially inflating costs and sometimes artificially inflating profits.   They inevitably lead to bubbles of mal-investments, or create holes where profitable businesses could have remained (like driving manufacturing offshore).

I could go on and on.  My point is that there are and will be people who will use this crisis to further the crusade against capitalism, and I am here to say that what just failed wasn't capitalism, it was the inevitable result of meddling in the free markets by manipulating the most dangerous of all things to manipulate - our money.  

Ed Archer's picture
Ed Archer
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 225
Re: The French model

First off sorry its taken me a while to get back, busy and I wanted to check some things. :)

It appears we are in agreement though, we both think America was never really a capitalist country in anything more than a superficial sense. From the start as a Hamiltonian conception of a developmental state with huge tariffs, which Adam Smith recommend continue. If America had embraced the free market philosophy that so many are enamored of, then you guys would probably still be exporting cash crops to Europe, the way the IMF recommends the 3rd world should according to their ideology.

Although I fear I have gone off on a bit of a tangent I recommend you read Bad Samaritans by Ha Joo Chang, you can find it here.

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