By Leslee Kulba
The Pacific Legal Foundation, a nonprofit law firm that takes on issues critical to preserving liberty in the United States, publishes updates on its work in a glossy magazine, Sword & Scales. The latest publication was a double issue, creatively packaged with The Capitalism Issue starting on one side and The Socialism Issue starting up-side down on the flipside, like the French version of an appliance’s owner’s manual.
Inside are short articles from guest contributors. Nothing is addressed in sufficient depth to sway a hardened mind. Rather, the booklet serves more to reinforce one’s own beliefs and perhaps offer new angles for debating the issues; and it provides a good deal of food for thought.
The first article in the loudly colorful The Capitalism Issue is a small excerpt from Phil Donahue’s 1979 interview with Milton Friedman. When Donahue criticized capitalism as running on greed, Friedman responded, “You think Russia doesn’t run on greed? You think China doesn’t run on greed? … Of course, none of us are greedy, it’s only the other fellow who is greedy.”
To that, Donahue took the tack that capitalism doesn’t reward virtue, and Friedman responded, “And what does reward virtue? You think the Communist commissar rewarded virtue? You think a Hitler rewarded virtue? You think – excuse me, if you’ll pardon me – do you think American presidents reward virtue?” He continued, “Is it really true that political self-interest is nobler somehow than economic self-interest? … Just tell me where in the world you find these angels who are going to organize society for us? Well, I don’t even trust you to do that.”
PLF’s Senior Communications Director Scott Barton explained the organization rarely sees attacks to undermine liberty wholesale; rather, “we do combat the gradual chipping away of our rights that leads us down a path to socialism, and sometimes it gets pretty close.” Pillars upholding liberty that PLF typically defends are property rights, economic liberty, free speech, equality before the law, and separation of powers.
Some of the articles in The Capitalism Issue tell success stories. Geza Karakas, a PLF donor, for example, bicycled 150 miles overnight from Budapest to Vienna to escape Soviet tyranny in socialist Hungary; so he could, years later, travel from New York to Palo Alto, trading a job inventing things like pacemakers for American Optical to partner in a venture, Vectel, making things like power supplies for submarines.
Some clients mentioned challenged or are challenging Certificate of Need laws or other forms of “Competitor’s Veto” preventing them from launching new companies in territory government is protecting for big businesses. This scenario is rightly condemned by anticapitalists and free-market capitalists alike. In a truly free market, government refrains from economic trade. When politicians peddle protective legislation in exchange for votes, that is known as crony capitalism or, more accurately, just cronyism.
Also featured is Rose Hicks, who recently won the right to prevent local land-use regulators from compelling her to, “open her property permanently for the public to traipse through.” Through her efforts, a 1985 ruling establishing what became known as the Williamson County doctrine was overturned by the US Supreme Court. The doctrine had denied property owners the right to access federal courts to challenge the constitutionality of state and local land-use action.
At the centerfold, day changes to night. The issue goes upside-down and backward, and the print goes to black and white with a single color: red. The pages remain glossy only because they freeride off The Capitalism Issue’s already purchased pages.
Displayed is a timeline entitled, “How Rock-and-Roll Killed Communism.” The subject jogs memories of rock stars wanting to take credit for the fall of the Berlin Wall back in the day. As dopey as it sounds, there actually is some truth to their claims. In communist countries, kids rebelled, emulating their Western heroes by bootlegging eight-tracks and painting their government-issued neckties.
Government’s response was to clamp down more and create a catalog of approved dance steps and rhythms. It’s an excellent metaphor illustrating how government-knows-best, top-down choices eliminate nuance that allows each person to self-style his personal music collection until his recordings resonate uniquely with his tastes. Government produces sterile vanilla ice cream that offends nobody because nobody is going to get excited over it, either. While rock-and-roll brought with it a lot of decadence in the Western Hemisphere, weren’t kids here also trying to fill the voids created by institutionalized standards foisted upon them?
Dr. Brandon Turner, a professor of political science at Clemson, argued most people attack a strawman of Marx. “Depending on where you stand, Marx is either basically right or hilariously wrong about everything; he’s either the prophet of our age or the most evil man ever to put pen to paper.”
Having read Marx himself, Turner notes Marx did not intend communism as a prosperity gospel; rather, he wrote, and earnest followers believe, that a life of wage slavery kills the creative juices that make mankind human. In other words, to engage a true believer in communism, one cannot compare the poverty and death in communist regimes to the diversity and prosperity in capitalist economies. One must ask in which system the human spirit is better unleashed to stretch and grow for good.
PLF’s Larry Salzman argued, “Dishonest and unethical people exist in every society. But capitalism encourages and rewards virtue, while the market works against the unthinking, the unproductive, and the immoral. By contrast, socialism penalizes a person for his virtues…. It takes from those who think, plan, and create, for the sake of those who do not.”
Author Timothy Carney says more about Marx’ concept of “alienation,” the dissociation of the wage slave from a life rich in meaning. He compared the quaint towns of southwestern Michigan to Flint and Detroit to the east. The east is characterized by huge industries with unionized line workers; but in the west, even the large businesses are started by locals. He quoted a local who explained, “[In] a community like this, you’re not going to screw people over and then survive.”
The publication has several references to Bernie Sanders, America’s icon for Social Democracy. With little reflection, one gets the impression Sanders is more honest than other presidential candidates about the state of the union. Elsewhere, Jeffrey Tucker of the American Institute for Economic Research described the march to socialism as, “disabling prices, collectivizing property, suppressing market signals, and empowering ministries of control.” How does this compare to government tools, now mainstream, of rent control, housing subsidies, anti-price-gouging laws, political tariffs, land banking, conservation easements, corporate welfare, bank bailouts, growing regulatory bureaucracy, licensure requirements, etc.? PLF’s Sam Hooper reminded the reader how all of the above socialist practices lead to scarcity.
In The Capitalist Issue, Nathaniel Hamilton interviewed John Allison, the CEO of BB&T who opposed government policies leading to the 2008 financial collapse, even testifying before Congress. A free-market capitalist, Allison foresaw how government’s attempts to control the market could only backfire. “This is where socialism fails,” said Allision, “It allocates resources on what sounds good and what is politically correct, instead of market sanity.” Anticapitalists were correct about greed playing a part, but the greed came when bankers were lured away from sound financial decisions by government inducements.
Anticapitalists blamed the crash on capitalism. Allison said it wasn’t a lack of regulation, but misregulation that exacerbated an economic downturn. Regulators applied sanctions for bad banks, which would not have been necessary in a truly free market, to all banks. “Then, in the bad times regulators always grossly overreact, they let the horse out of the barn and close the barn door. And they do this over and over again.”
It was bad enough that the regulators had immense power; they wielded it unpredictably. For example, they bailed out Bear Stearns but let the more economically-significant Lehman Brothers fail. Then, they negotiated a merger with Citigroup and Wachovia only to break the deal four days later and merge Wells Fargo and Wachovia instead. Hamilton summarized, “The unpredictable government bailouts mixed with the inconsistent regulatory actions in the preceding decades led to confusion that stymied the market’s ability to self-correct.”
For a comedic interlude, Benjamin Powell tells about a three-star, government-owned hotel in Havana with a sooty façade, broken elevators, a dark hallway, jammed door, broken windows, an abandoned courtyard, mold everywhere, and a swimming pool with beer cans floating in its cloudy water. This hotel was “representative of what [he and Robert Lawson] found everywhere as we traveled the globe studying socialist economic systems,” collecting material for their new book, Socialism S***s: Two Economists Drink Their Way through the Unfree World.
The final article in The Socialism Issue comments on trends documented elsewhere of university professors leaning more and more socialist. According to research of the Open Syllabus Project published earlier this year, Karl Marx is the most-assigned author on college campuses; and his books are assigned for humanities courses instead of opening them to debate in political science or economics courses. The good news, reported economist Phillip Magness, is enrollment in said humanities courses is dropping. “Even in the skewed and ideologically distorted academic marketplace of ideas, the student-consumers of classroom content still reign supreme,” he wrote.
“If that’s the case, organizations and publications devoted to the cause of individual freedom should continue educating Americans about the value of core political and economic concepts like capitalism, economic liberty, private property rights, and free markets. The best way to counter the spread of socialism’s destructive and ruinous ideas is to provide superior ideas that help people navigate the political discussion.”