I've been trying to pick debates with friends who go on facebook or some other outlet and post links to nonsense articles explaining how "capitalism" or "free-markets' or "big business" are destroying America, exploiting the masses, and responsible for all things odious and vile. It's usually a futile endeavor to convince such people otherwise, you can't add to a cup that's already full, but the debate forces me to sharpen my arguments and understand the theories involved. People also need to learn about this stuff, even if it's from me, because change will never happen otherwise.
Anyways, I understand the basic premise to free-markets. It enables people with better access to trade, enables resources to go to more efficient uses, lowers the costs for consumer goods, and helps raise millions around the world out of poverty by growing the global economy. That's all fine and swell, say the objectors, but look at America! Our (low-skill manufacturing) jobs have been sent to China, businesses are trying to cut wages, or already have, and the middle class as we know it is rapidly becoming a relic of the past! Woe to the honest American worker!
My instinctual counter is that the loss of these jobs is only part of the story, that there is also growth in other sectors of the American economy that made up for the loss until our government-fed housing bubble finally burst. I try to argue that jobs are not being sent to China because companies are evil, but are reacting to the demands of the American consumers who are buying all the cheaply manufactured garbage to begin with! Lastly, I argue that the emergence of new technology, of new markets, of cheap labor, all of it causes some jobs in some area to vanish, but that creative destruction is a necessary and natural process that has occurred since time immemorial. As long as the economy grows, jobs will necessarily have to increase, too. The nature of WHAT jobs are available to us and the wage we're offered is determined by our education, skills, talents, and productivity. Free-market capitalism was not designed and manufactured by man, and therefore not beholden to your concept of "social justice." Despite this, it is fair because everyone has the freedom to fulfill their destiny according to their own wishes.
And so it ends. I would be greatly appreciative if you could help me identify talking points that are particularly efficacious at converting the heathen masses, or argumentative strategies to gain the upper hand against an intractable foe. I did some digging through the forums and couldn't find much on this subject - if you know a past thread covering this, please link it and tell me to go on my way.
Agamentus:Yes - but what's the best rebuttal when someone argues that it's just "not possible" for an American to compete with the [insert foreign worker], who will work for pennies to the dollar?
They are perfectly free to compete with them for pennies to the dollar. What is stopping them?
Think about the answer to this very carefully.
Agamentus,
I have many friends on both the right and left who argue therefore that a "Mixed Economy" is therefore the best solution because government regulation somehow curbs the vices of capitalism… I guess the real job is proving that government regulations don't work, and that the Law of Unintended Consequences reigns supreme.
I see the point and agree. To further this, below is an example from Rothbard’s What Has Government Done to our Money. His words are in bold. Below he argues the idea that government must be the only entity to create coinage because private coinage would run rampant with fraud (“due to the ‘vices’ of the private/free market”). Keep in mind this only addresses one so-called vice of capitalism: fraud (for example, this would not address the argument that the government must run the education system).
Opponents of private coinage charge that fraud would run rampant. Yet, these same opponents would trust government to provide the coinage. But if government is to be trusted at all, then surely, with private coinage, government could at least be trusted to prevent or punish fraud. It is usually assumed that the prevention or punishment of fraud, theft, or other crimes is the real justification for government. But if government cannot apprehend the criminal when private coinage is relied upon, what hope is there for a reliable coinage when the integrity of the private market place operators is discarded in favor of a government monopoly of coinage? If government cannot be trusted to ferret out the occasional villain in the free market in coin, why can government be trusted when it finds itself in a position of total control over money and may debase coin, counterfeit coin, or otherwise with full legal sanction perform as the sole villain in the market place? It is surely folly to say that government must socialize all property in order to prevent anyone from stealing property. Yet the reasoning behind abolition of private coinage is the same.
His argument in other words is: if government cannot be trusted to catch fraud in Market XYZ in a free market, why do we think they would carry out Market XYZ without committing fraud themselves if given a complete monopoly to own/regulate that Market.
Quoting Walter Williams, “People are always self-interested. It's just when they manage a nonprofit organization [or] government entities in general, universities and charitable organizations, they face a different set of constraints on their behavior. In the profit-making world, there is much greater monitoring of the behavior of people who act for the organization. Profit-making organizations have a financial bottom line they must meet, or sooner or later, heads will roll. Not so with nonprofits, who have no bottom line to meet. On top of that, incompetence for nonprofits means bigger budgets, higher pay and less oversight."
Jonathan M. F. Catalán: Yes - but what's the best rebuttal when someone argues that it's just "not possible" for an American to compete with the [insert foreign worker], who will work for pennies to the dollar? We enjoy an essentially limitless demand for wealth. We are always looking to satiate our desires, and when one desire is sated then we move on to the next. If we outsource industry X and that much labor is freed, then that much labor can be applied to the production of a new product (a new product which can be produced because of the volume of accumulated capital). So, not only do Americans enjoy higher real wages as a result of a falling price for whatever product which production was outsourced, but we also enjoy the ability to purchase all new products thanks to the extension of the division of labor and greater productivity. This assumes a healthy, growing economy, and of course government interventionism can depress a market to the point where it will take time to respond to these changes. But, a lack of dynamism shouldn't be blamed on the market, only on government which hampers the market.
Yes - but what's the best rebuttal when someone argues that it's just "not possible" for an American to compete with the [insert foreign worker], who will work for pennies to the dollar?
We enjoy an essentially limitless demand for wealth. We are always looking to satiate our desires, and when one desire is sated then we move on to the next. If we outsource industry X and that much labor is freed, then that much labor can be applied to the production of a new product (a new product which can be produced because of the volume of accumulated capital). So, not only do Americans enjoy higher real wages as a result of a falling price for whatever product which production was outsourced, but we also enjoy the ability to purchase all new products thanks to the extension of the division of labor and greater productivity.
This assumes a healthy, growing economy, and of course government interventionism can depress a market to the point where it will take time to respond to these changes. But, a lack of dynamism shouldn't be blamed on the market, only on government which hampers the market.
Its funny how outsourcing, a direct offshot of Ricardo’s theory of comparative advantages, gets the blame as capitalism’s weakest point, although it’s really its strongest. The spirit of capitalism is nothing if not outsourcing.