November 19, 2003

Misconceptions

Recently on the Hivemind, Ivo had this to say. Published here with his kind permission.

--
In this thread the usual batch of misconceptions about money and
capitalism popped up. Let me try to clear 15 of them up:

  • Don't use Telkom as an example of capitalism. It is a monopoly in a state-controlled sector where an appointed official with a patchy track record gets to decides who can provide what service to whom using what technology and at what price. She decides what you as a consumer or business need, she decides if it will be provided to you, at what cost, and from who you may buy it. You can get better examples of capitalism in Cuba.

  • Don't use patents that last too long as an example of how bad capitalism is. Use it as an example of why patent periods should be limited.

  • Don't use the rare exception of patents that are exploited by their non-use as an example of why the right to own your inventions are bad. Just expose such cases and shame the patent holder into licensing the patent. Or invent competition and put them out of business.

  • Don't consider money primary or superior to any other product, substance or quality. It is simply a freely and voluntarily exchangeable representation of the production of goods and services, and makes barter easier and less costly. And since I, for one, need goods and services to live, my right to property IS my right to live, and my right to live can only be granted through my right to property.

  • Don't use the fact that crime occurs as an example of how bad capitalism is. It's an example of how bad crime is, and such crime is not an accepted part of the system.

  • Don't fall for feeling sorry for supposed small-time crooks who "need to" do crime, but feeling outraged by rich crooks. They're morally equivalent, and your rights are subject to the indiscriminate whims of both.

  • Don't use corruption as an example of why money (or the system) is bad. Corruption occurs in any socio-economic system, and should be curbed by a sound legal system and a free, intelligent press. I'd wager corruption is least likely to occur in well-developed free-market democracies.

  • Don't use patents for stupid things as examples, except to show why the US Patent Office should hire smart people to whom the obvious won't appear non-obvious.

  • Don't use the abuse of legal loopholes as an example. In every system there will be loopholes to exploit, and people to exploit them. Sophistication, not revolution, closes loopholes.

  • Don't argue that someone getting richer through trade implies someone else has to get poorer. Trade is not a zero-sum game, and both parties to a voluntary trade benefit.

  • Don't use the poorest countries as an example of how the system has failed. Why are poor people getting richer everywhere except in countries that keep out democracy, capitalism, trade and development? This is no coincidence.

  • Don't use exorbitant wealth as an example. That doesn't explain why one should break the system that has made everyone - including both poor and exorbitantly rich - richer than ever before in human history. Imbalance is not poverty. Gaps between rich and poor show no absolute levels, and are consequently meaningless. One person's poverty does not depend on another person's wealth, or vice versa.

  • Don't claim exploitation by the rich as an example. If you're poor, I can't profit by trading with you. So it is in my interest that you're rich, whether or not I am rich too. The same goes for countries. It is in nobody's interest for people to be poor. And the few out there that do go in for short-term profit should (and will) be exposed by the media, stopped by the law, and punished by the market and their investors.

  • Don't be paranoid. There will always be people and groups of people who are richer than you and more powerful than you. There will even be some among them who will abuse wealth or power. But the rich aren't out to get the poor. They have better things to do in their hard-earned leisure time.

  • Don't use abuse of power as an example of why the system is flawed. In a sufficiently advanced capitalist system, consumers can have much more power than the producers that depend on consumer choices. And they can abuse it too.

    Finally, to repeat a well-made point of earlier: if money is evil, why
    does the lack of it cause so many ills and injustices?

  :::  a Rant ritual performed at 03:19 PM   :::