Why Capitalism Is Bad For Fascism
Rose Friedman, wife of the late Milton Friedman, wrote with him in their 1980 book, Free to Choose
Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised. In addition, by dispersing power, the free market provides an offset to whatever concentration of political power may arise. The combination of economic and political power in the same hands is a sure recipe for tyranny.The combination of economic and political freedom produced a golden age in both Great Britain and the United States in the nineteenth century. The United States prospered even more than Britain. It started with a clean slate: fewer vestiges of class and status; fewer government restraints; a more fertile field for energy, drive, and innovation; and an empty continent to conquer. . . .
Ironically, the very success of economic and political freedom reduced its appeal to later thinkers. The narrowly limited government of the late nineteenth century possessed little concentrated power that endangered the ordinary man. The other side of that coin was that it possessed little power that would enable good people to do good.
And from my copy of Hayek's book, here's a passage I have highlighted, where he quotes and comments on De Toqueville:
Nobody saw this more clearly than the great political thinker de Toqueville that democracy stands in an irreconcilable conflict with socialism: "Democracy extends the sphere of individual freedom," he said in 1848. "Socialism restricts it. Democracy attaches all possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."To allay these suspicions and to harness to its cart the strongest of all political motives - the craving for freedom - socialists began to increasingly make use of the promise of a "new freedom." The coming of socialism was to be the leap from the realm of necessity to the realm of freedom. It was to bring "economic freedom," without which the political freedom already gained was "not worth having."
...Freedom in this sense is, of course, merely another name for power or wealth ... The demand for the new freedom was thus only another name for the old demand for an equal distribution of wealth.
Friedman quote via the WSJ
Amy,
Be sure to check out "Free to Choose", also by Milton and Rose Friedman. The television show of the same name is also available for free here:
http://www.ideachannel.tv/
shaun at August 20, 2009 6:48 AM
A quote from Winston Churchill comes to mind:
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."
And to take liberty with something he said about democracy:
"Capitalism is the worst economic system ever invented, except for all the rest!"
Yesterday Dennis Prager had an interesting interview with Steve Forbes. They were talking about Obama's (socialist) health care plans and Forbes said, "Imagine if there was no competition in the computer industry and everything was provided by the government. What do you think a computer would cost and what would its quality be?" Anyone who thinks we'd have anything near the insanely low prices and high quality of computer technology that we do today is truly DELUSIONAL and BEYOND HELP!!!
Robert W. (Vancouver) at August 20, 2009 9:06 AM
@Robert (quoting Forbes): "Imagine if there was no competition in the computer industry and everything was provided by the government. What do you think a computer would cost and what would its quality be?"
I can almost hear the statist rejoinder (you'll have to imagine the wild eyes and spittle for yourself): "What kind of computer do you really need, anyway? Couldn't the resources spent on computers have been better spent on Something Else? Furthermore, why should you have the latest computer? Don't you know there are people who can't afford computers in the first place, and after all, you're only going to visit those fascist blogs..." And so on.
old rpm daddy at August 20, 2009 10:09 AM
"The demand for the new freedom was thus only another name for the old demand for an equal distribution of wealth"
Is it any surprise that we should be facing the prospect of forced redistribution of wealth when, after 8 years of the Bush administration, the gap between the rich and everybody else in the U.S. grew to its greatest magnitude ever?
Of course we all know that the poor will never get the benefit of that redistribution. Somehow, it will be the government itself that will multiply in size and power. All the better to "help" us.
Jay R at August 20, 2009 11:12 AM
Interesting writeup, Amy. It looks like you and everyone else in California are getting an up-close-and-personal look at the road to serfdom right now. If political tyranny starts with economic tyranny, I wonder if there is a tipping point, and if so, where it is. Because we certainly don't have the economic freedoms (at least with regards to the law) that our 19th-century forebearers did. Is there some point at which the march of socialism becomes irreversible? Off the top of my head, I can't think of any nation in history that has gone deep into socialism or communism, and lived to tell about it. (China might do it someday.)
Cousin Dave at August 20, 2009 11:21 AM
I do wonder how California is going to dig itself out of its hole. It doesn't seem like incremental change is going to do the trick. Constitutional convention? Referendum abolishing public pensions?
Pseudonym at August 20, 2009 12:45 PM
While economic freedom undoubtedly has great benefits, consider that this same freedom among financiers did a great deal to lead us to the brink of a worldwide depression. Financial businesses need to be regulated. That's not easy to do because of their political clout, and because it's so easy to weasel around regulations.
Iconoclast at August 20, 2009 6:36 PM
Amy, thanks for bringing this obit to your column. I have been thinking about how much I loved Rose for her wisdom and lapidary understanding about capitalism and economics. Wish there were more women out there like her (and you). I'm really tired of these simpering ninnies who don't seem to understand the basics!
Ally at August 20, 2009 7:12 PM
They are; the regulators chose to do nothing. Excessive freedom did not cause the current economic difficulty.
Pseudonym at August 21, 2009 7:15 AM
Not entirely true.
It was the regulations themselves that pushed banks to do things that were ultimately harmful.
The banks had a choice - get fucked by regulators now, or get fucked by reality later.
And it's always easier to put something off, especially if you honestly believe the gravy train is never gonna stop.
brian at August 21, 2009 9:22 AM
"It was the regulations themselves that pushed banks to do things that were ultimately harmful." Absolutely right. And don't forget about Freddy's Fanny, that government-protected entity that was allowed to use the market as its personal play toy, with no regulation whatsoever.
Cousin Dave at August 21, 2009 10:32 AM
The notable feature of these debates is that those who favor an increased role for government effectively have it both ways.
Whenever the economy is doing well, this is used as a justification for expanding government entitlement programs and services on the grounds that we can afford to do so. But whenever the economy tanks, it all gets blamed on the failures of the free market and is used to justify more government regulation and pork to get things going.
So the nanny statists can have it both ways. Siphon off more of the benefits when things go well, but then avoid responsibility when things fail.
Nick S at August 23, 2009 8:33 PM
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