Libertarians Care Dec 11, 2013

The argument against Libertarians has always been that we're "weird" or that we simply "don't care" about other people. We're selfish. But every argument that Libertarians make is about how our ideas would help other people. The ideas are not always intuitive but they're always rooted in helping others be free economically and socially so that we can all pursue the happiness that is our most basic human right.

So with that in mind, I'm going to write a small series of posts about how our "unintuitive" ideas are actually good for the population. The first topic I'm going to tackle is something that the Left finds abhorrent—Capitalism. In order to understand the Libertarian philosophy, one must understand Capitalism and how business actually works because it is at the root of most economic arguments and people woefully lack understanding of business.

It's vogue to take the "intuitive" stance that Capitalism is evil because the only thing that the "evil" corporations are interested in is profit. So? Wanting profit is not an evil motivation. It's a completely human motivation. Who doesn't want more money? So that is the first thing to relearn. Companies—no matter the size—are seeking profit and it is their duty to seek as much profit as possible.

The problem is that our large government can be bought—and it's why Libertarians hate large government and regulation. This is Crony Capitalism and we have no protections against it because our government was supposed to be severely limited to protect the rights of the individual only. It was not designed for regulation.

So corporations do what they do best. They seek profit via the path of least resistance. And that path is through our Congressmen. Large corporations are not evil. They're seeking profit as all companies should. They use the government as a tool to circumvent the market. They legislate out competitors. They create policies that have adverse effects on others so that they can profit.

As a result, people think they hate Capitalism because it let these larger corporations make laws and affect other people and businesses, but it didn't. The large government and regulation allowed these companies to infiltrate the government. People should hate the large government that provided this tool for those corporations.

People should love pure Capitalism because it provides a mechanism for balance—the free market. Note the "free" part. Despite what your high school social studies teacher might have taught you, we do not have a truly free market because of all of the regulations that pervert the market. Despite that reality, we do enjoy a relatively free market, but it's a mediocre version of what it could be.

Given those two things—profit seeking is natural and free markets are the best regulation—we can continue.

Sometime around 2011, Rush Limbaugh was criticized for saying, "Greed has fed more mouths than charity ever could." While I don't always see eye to eye with the man, he couldn't have been more right in this case. But people demonized him for saying it, and people demonize Libertarians for saying the same thing. Remember, profit seeking isn't evil which means that "greed" isn't evil. It is a neutral and natural human act.

You have to understand that it is precisely the search for profits that is the reason for prosperity. How? To understand that, you need to know how Capitalism, business, and markets actually work.

Capitalism basically works like this. Let's assume that you have a good or service you want to offer in exchange for money. You charge $X for it, and you modify that price based on the reaction of the market. If your product is marketable, it sells. If not, it fails and you make something else. Eventually you make a nice profit, but nothing major. But who is ever satisfied with their income? So what do you do about it? At some point you just can't do it alone. You can't make more profit without sacrificing quality—which the market will react to accordingly.

So you expand your operations so that you can profit on volume. You hire workers. They agree on a rate to work with you. Unlike what most people seem to think, you're not forcing them to accept anything. Labor functions within the market just as sales do. In fact, it is the market that keeps wages afloat—and it's why most jobs are NOT minimum wage jobs and why Libertarians argue against minimum wage. If you want good workers you have to pay for them.

And that truth is where Rush Limbaugh's quote comes from. The capitalist seeks as much profit as he can because he is greedy. But because of that, the capitalist employs vast numbers of people which keeps them out of poverty. And they acquire skills through working that eventually let them leave and form their own companies. And their companies provide competition and innovation which keeps costs down. And since there are then more places for skilled workers to work, they can leverage their ability to leave for better wages.

This is what creates prosperity. It actually led to benefits such as pensions and insurance, before the government stuck their hands in it. And it's exactly why places that are more economically free, like Hong Kong, prosper. Look at their growth in the last 50 years if you doubt the success of free markets.

Unfortunately, we are retreating from the path that we started. That's exactly why the US is losing ground to other nations. We are becoming less and less free economically. It's a pain to start a business, it's costly, it requires so many things to just get started, and then there are burdensome taxes that are costly to deal with and regulations they keep piling on. You'd think we live in an "unregulated" society if you listened to those who decry Capitalism. But it is rampant. As comedian Doug Stanhope nailed it, "You're not free in the least. You need a diploma in this country to cut hair."

But regulation is unnecessary in a free market, especially when word of mouth travels the globe instantly. I know it's another counter-intuitive thing, but you don't need to worry about company X screwing up the environment, for example, in their greedy search for profit because if they screw up, they will pay for it. BP's profits plummeted after their oil spill, and they were fined for their impact. And other companies were watching so that they wouldn't make the same mistake. And as an aside it led to the development of better, cheaper processes to contain oil spills.

Unfortunately, our gut reaction is to instead choose to regulate these issues to somehow stop them before that happens. That gives us a false sense of security and more loopholes companies can exploit to get profits through the federal coffers rather than through the sales of their products on a free market where there are actual consequences. Again, that is not a function of Capitalism but a failure of large government and its regulations.

All of these things exist in some way in your everyday life, you just might not notice them. And often you use them to be more successful and prosperous—maybe you switch jobs or demand a raise. But in our current system the market can be perverted by those with the most influence which leads to the imbalance that you perceive is due to Capitalism—which couldn't be further from the truth.