Sunday, April 14, 2019

Irrational fear of Capitalism

The 2020 presidential primaries give us a good look into the minds of the Democratic contenders.

Perhaps more accurately, it gives us a look into what the Democratic contenders think is suitable bait for voters.

It is a bit like carp fishermen. Bread? Boilies? Worms? Corn? Fishermen use what they think carp will like. Some of that is driven by history. The rest of it is driven by personal bias. We will never know if soap is good carp bait because carp fishermen don't eat soap. Nor are we likely to learn if brewers yeast, peanut butter and soy sauce makes a good carp bait.

What we see is that Democratic politicians have an irrational fear of capitalism or they think voters fear capitalism.

Talking with liberals, I see that they are enchanted by the non-profit sector. They are loath to judge and be judged. They are certain that the world would work much better if all decisions were made by altruists.

They define "profit" as theft from the customer or workers. As a conservative, I define "profit" as the additional value created by the intelligent combination of materials, tools, intellectual property and human labor. If combining those inputs destroys value, then the venture loses money and sum-value-in-the-universe is decreased. The venture should fail.

The only way a venture that destroys value can stay in business is when coercive forces are in play.

A quick word sketch
Suppose somebody invented something great. How about a cure for Diabetes?

Then, suppose that out of the goodness of their heart they "gifted" it to the public domain.

There is a very good chance that the invention would not be brought to market because there is no "moat" around the profit. The firm that invested in developing the invention and chasing it through the approval process would not be able to protect their investment.

They would be patsies. Their competitors would be able to reap the benefits of the first firm's investment without having to invest any of their own resources.

Putting a moat around intellectual property provides the incentive for capitalists to develop promising ideas.

At this point, some readers might say, "The government can develop those promising ideas."

Sadly, the track record of the government developing technology without private industry is dismal. Without the profit incentive (increase value) the ability to tell a compelling story becomes the basis for choosing winners.


  1. Hello, we're from the government and we're here to help...

    1. to help empty your wallet.

      'nuther day, 'nuther dollar.
      Give us your wallet.
      Don't holler.


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