Wednesday, February 25, 2009

Bringing Capitalism to the United States

Contrary to popular belief, the United States has never been a truly capitalist nation. I know I'm going against the grain on this statement, but it is unfortunately true. The federal government has never had an official policy of minimizing economic intervention as much as possible, which is what makes a country a capitalist country. I am not naive. I know that it is impossible to completely separate government and the market, but a government that minimizes its interference in the market is a capitalist government.

The United States has, like every other nation throughout history, always been a statist country. Sure there have been varying degrees through our existence, but the federal government has always been in the business of interfering in the economy for statist reasons. These days, due to decades of expanding federal government, it has been more statist than it should be to the point that the United States Constitution is routinely violated by even some of the most conservative defenders. But that doesn't mean that things can be done to reverse the trend. I have a few ideas that might turn things around for the better:

  1. Pass the FairTax into law and begin the process of repealing the 16th amendment. This will ensure that people's taxes are taken through minimal intrusion on liberty as well as expose the actual cost of government on the market. If people really knew that the government was costing them an average of 23% on everything they buy, then they might take a much closer look at where that money is actually going. Because the top 50% of income earners pay nearly 100% of the nation's taxes, it is difficult to convince the other half of the cost of government in their own lives.
  2. Eliminate the minimum wage at the federal level. By using the force of government to force employers to pay a certain amount, they artificially raise the market cost of labor. In the short term, the minimum wage creates more unemployment. If repealed, the short term effect would be less unemployment. In the long term, it artificially inflates growth that, as the recent crashes have demonstrated, is doomed to fail in some fashion. A job is a contract between employer and employee. The government only needs to ensure that there is no fraud.
  3. Implement the loser pays system in civil court cases. This is where the plaintiff will pay for the defendant's legal fees, among other things, if the plaintiff loses the lawsuit. What does this have to do with free markets? Simple. When you have a system like the United States does now, then there is no stopping a big company from suing a smaller competitor into oblivion (which happens all the time) for no reason.
  4. Repeal the 17th amendment. Doing so ensures that Senators no longer need to receive campaign money from special interests, especially business special interests. It is not uncommon for big corporations to create or fund special interest groups in order to eliminate competition.
  5. Make incremental steps toward a free-banking system or a gold standard. Right now, debt is taxpayer-backed. This is one of the major reasons why banks lent the money they did to people they knew couldn't pay. They knew that the government would be there with money confiscated from the people to support them if they failed. Yes, this is a push to eliminate the Federal Reserve and central banking in general.
I could probably list more and fill a couple of pages. But this is a good start and something the Republican party could promise for 2010. I'm not holding breath on either party attempting to implement more than 2 of these things. Most of these things are unpopular and more than likely will be met with severe opposition from irrational buffoons and lobotomized media pundits alike. And many reasonable and well-rounded people will have their grievances.

I don't expect any of this to really fix anything either. The market, like everything else in the universe, has beginnings and endings all the time. Capitalism merely ensures that the market grows most of the time and that it's "deaths" are short and practically painless.