Thursday, January 15, 2009

Mercantilism vs Capitalism

I've concluded that no matter how much the current Republican party likes to extoll capitalism, in actuality they're mercantilists with a vocabulary problem. My thoughts here are by nature simplistic as this is a blog, not a doctoral dissertation. It is intended to stimulate debate.
Capitalism is by its very nature a social economic system. A group of people invest money in an enterprise sharing the risk and sharing the profit. Hummm sounds suspiciously like Socialism doesn't it?
For capitalism to work it needs certain requirements:
1 Freedom of thought. Thinking outside the box, pure science to develop new technologies, and free or fair trade. Equal Opportunity for anyone to come up with an idea, technology, or start a business and become successful.
2 A spirit of the law legal system: English Common Law, all truly successful capital economies have been started under English Common Law which is weighted in favor of the individual. Though England may still be a Monarchy politically their parliamentary system matches up with our Congressional system and we have the same basic rights. What can be summed up in "Due Process Of Law."
3 With all due deference to Adam Smith, Capitalism needs regulation. If investors are to not be cheated and consumers not harmed by the products they buy there is no way to guarantee this without government regulation.
Wealth is based on production and is unlimited. Money is made, but must be circulated. This creates a strong middle class.

Outside of a history book you don't hear much about this economic philosophy anymore. It was consigned to the dustbin of history after World War I. But if you look at the way it worked and compare the actions of the Republican Executive, Legislative and Judicial majorities the last eight years I think it's rearing its ugly head.
When Michael Douglas gave his "Greed is good" speech in the movie Wall Street, that's not capitalism that is textbook mercantilism. Mercantilism is economic social darwinism, dog eat dog, king of the hill, the man with all the gold makes all the rules, and ultimately anarchy. The philosophy of nihilism and sociopathology. Europe suffered a thousand years under the purest form of it. From the fall of Rome to the Renaissance, Reformation, Age of Exploration and Reason. Once the iron grip of Catholicism and their relaxation on the sin of usury was lifted in a hundred year period there was an explosion of artistic, economic and scientific advancement unmatched in human history.
What are the requirments of Mercantilism?
1 Autocratic rulers and a letter of the law legal system. A legal system designed by law givers: prophets, emperors, monarchs, dictators, tyrants. Civil Code traces its roots to Rome's Twelve Tables, but Constantine added the Ten Commandments. A legal system that can prosecute the petty little infractions, or make them up, when they are in power, and choose to not prosecute the whoppers committed by their own party.
2 Constant war. Greed is insatiable. They can never have enough, making it or earning it can't satisfy their hunger. They have to steal it. When the person with this appetite is a ruler they wage constant war always looking for more land, glory,  or gold (Napoleon, Hitler). If the ruler is not strong enough there is constant civil war led by military generals or large landowners. See Hundred Years War, War of the Roses, Thirty Years War, etc.
3. Religious support. When all wealth is hoarded in the hands of a few how do you keep the many from rising in revolt? You make the ruler and aristocracy gods (Pharaohs) or divinely appointed (divine right of kings). You keep the people in fear of the standing army that oppresses them and fear of punishment after death (hell) if they don't suffer in silence.
4. Servile masses. Slaves, serfs, peasants, share croppers, company store, minimum wage, non-union employees; theirs is to provide wealth to the landlord, mine owner, factory owner, sweatshop owner, not get wealthy themselves.
5. Strict conformity. Religion doesn't keep everyone in line, so you have to have a police force of oppression. Their job is to spy on the people, hear what they're saying, reading, thinking. Social gatherings are rigorously regulated. Fear is all the government uses to keep the people in line. Anyone who voices opposition disappears. Since the country is always at war habeas corpus is always suspended. People are imprisoned indefinably without reason, torture, execution are used to silence all opposition.
6. Knowledge is strictly regulated. The lower classes don't need to learn too much, they might start thinking for themselves. Education if for men only, or upper classes only. The lower classes are denied reading and writing by religion (Catholic control of education by everything having to be in Latin or Greek) or law (pre-civil war U.S.), or given substandard schools, teachers and texts (separate, but equal and current inner city schools).
7. Wealth is limited. Subsequently all wealth is hoarded

Now compare the actions of the last eight years by our fearless leaders headed by Der Decider and Darth Cheney?
1. Autocratic rule supported by religious leaders proclaiming them to be appointed by God and anyone who questions their decisions is facing hell fire and damnation.
2. Constant war, on two fronts, anyone who disagreed is a traitor.
3. Suspension of habeas corpus and use of torture, assassination and execution.
4. Institution of Civil Code, letter of the law, justice department in support of the executive can do no wrong decisions and prosecution of opposition party.
5. Underfunding and over testing public schools while supporting private schools with vouchers and encouraging home schooling and charter schools. Science is scoffed at, belittled and persecuted. 
6. Tax structure that favors the wealthy and overburdens the working classes.

Now stop and think. If the Republican Party really believed in Capitalism, would every time they get in full control of all three branches of government that the economy goes in the tank? You'd think the economy would bloom under such strong supporters of trade, but it doesn't. All they do is let the looters and pillagers run amok and the Democrats have to come in and clean up their mess. 


Michael Manning said...

Yes, P M there needs to be a rational set of limits and boundaries to stop abuses and loopholes regardless of political party. One such example I have experiecned and spoken about three times to my union: "The Right To Work State"--an onymoron, with emphasis on "moron". Example, 5 of us became laid off from ABC because our president and vice president lost a major contract. They are fired from their 6 figure jobs two weeks after our pink slips. We received a 3 month severance packages and legal order not to return to work for any competitor in that market for one year. 13 States make this practice illegal. Whare are the other 37? Democrat, Republican or Independent. I don't care. Give me Common Sense! That's my feeling. Thanks PM!

P M Prescott said...

I agree that Right To Work is an oxymoron. I feel for your loss. I'd really hate to be a teacher without a union. Not that our union has done much, but just having the recourse to a grievance and collective bargaining makes all the difference in the world.

Anonymous said...

You should rename the title. This is not a comparison of mercantilism vs. capitalism, weighing the virtues and vices of each, but a rant on the dark sides of mercantilism and a cliche argument against the widely known dysfunction of the modern Republican Party.

Anonymous said...

Your sentences and paragraphs are way too long, which makes for hard reading. Other than that, the info was valuable. Thomas