Capitalism and Unfair advantage

What people call “crony-capitalism” is a private party gaining an unfair advantage in the marketplace over his competitors by the means of governmental intervention in trade. This happens by lobbying the Government to pass trade regulations in their favour, creating state sponsored monopolies. But when the Government is accorded such power to intervene in the market, by the citizens, the market is no longer free, and the political-economic system is not Capitalism.

Allowing governmental interference in trade activity will incentivise the private parties to lobby, and makes the bribery of governmental officials possible. Absent governmental interference, there is no way an individual can have an unfair advantage in the market.

Observe that “fairness“ doesn’t mean “equality”. Fairness is a concept to be understood in the context of economic freedom. A free trade is fair trade. It means that the consumer is choosing by his free and voluntary will, with his complete knowledge, the best product in the market he can afford, from the producer he wishes to buy from. The choice is not unfair, if it is not forced upon him.

Competence makes wealth possible, not the other way around. In a capitalist system, wealth is produced through competence, and lost through incompetence. How the individual spends his wealth is completely his choice. If a poor producer is not able to compete with a rich producer in creating and selling a better product at a lower price, it is not unfairness. It is unfairness if you are forced to buy from the poor producer, by the government, because he needs money, though he is incompetent. It is unfairness if any producer, poor or rich, is not allowed to sell his product in the marketplace through governmental interference. It is unfair because then, your choice to trade is no longer free.

In a Capitalist society, the institution that protects the individuals against the abuse by a producer who sells his goods to his customers by cheating or stealing, or by physically forcing his customers to buy from him, or by forcing his competitors out of the market by physical violence, is Government.

Individual rights are the means of preserving an individual’s morality in the society. They are the principles that protect an individual from the immoral choices of his neighbours. The only proper purpose of Government is to protect the individual rights: Life, Liberty and Property, whose meaning is in essence, to safeguard the freedom of action of the individual.

Capitalism is the only morally proper system of economy, because it is the only system that is made possible by, and works on the principle of individual rights.

– Avinash Kumar.

Note: This article is originally my answer to the question on Quora: How can capitalism be a success in India if there are too many people in India who lack proper morals & ethics and thus misuse capitalism to promote crony capitalism in order to cheat and abuse people for their own benefits?

Hatred of Capitalism

If you hate Capitalism, I assume that you do not understand what Capitalism is. Chances are that you are misinformed and no-one else precisely explained it you. So I will.

Capitalism is a Laissez Faire economy, where private individuals consensually trade the value they have for a value they want.

That is all. If your politician, teacher or your parent has fed you anything other than this, they are either ignorant sufferers themselves, or conscious cheats. Beware of them.

Just to make it clear,

Laissez Faire Economy is a system of economic activity that is completely free from any kind of interference by the Government.

Consensually means through your free non-coerced-will.

Value is anything that takes human effort to produce.

Now the things to remember.

If it is not Laissez Faire, it is not Capitalism.

Every kind of economic problem imaginable, which plagues the nation, is a blatantly direct consequence of Governmental interference in the economic activity of the individual. The result of the mixture of capitalism and communism is always communism and it breeds eventual bankruptcy.

Now a communist is someone you must hate. He is the extreme opposite of a capitalist.

A capitalist will always have something that you value, which he deliberately offers to get what he wants from you through trade. A communist will not offer anything that you value to get what he wants from you. Instead, he makes the Government to point a gun at you to extort it.

Observe that a capitalist can only reasonably want to trade with another capitalist. Because a communist cannot understand what a trade is. He can only have needs and demands to offer, not values. At a lower level, he constantly needs producers to suck them dry, and demands more and more welfare schemes from the Government. At the higher level, he plans ways to lobby the Government to pass regulations in his favour, so that he could force his competitors out of business.

If you are a capitalist, chances are you are continually struggling in a communist system, trying to deal with people who do not have anything that you value to offer you, but believe that they own anything you produce. The best course of action for you is to find a capitalist society and move there. Abandon communists. Don’t even try to prove it to them that you are right. Just don’t deal with them. Because a communist is always a parasitic organism. He cannot survive on his own. He always needs a capitalist to suck blood from. Abandon him and he will perish. Do not pity him. He is demanding your voluntary slavery. He is the most despicable creature on this planet.

The article is originally my answer on Quora to the query, “Why do people hate Capitalism?”

The makeup of an idealist

The choice of communist ideology over capitalist ethics, as the sphere of an individual’s activity diminishes from the world as a whole, to the family as a unit is well established. However it couldn’t suggest with any certainty, the extent of contribution of an individual in the running of the family and the subsequent power dynamic that comes along, governing who calls the decisions in the family. That of course varies with each family, and in a family of idealists, the most ideal one claims the privilege. I present here, a scenario of idealism at its extreme. Antithesis to the buzz of female-hypergamy and male-victimisation where men marry down and later on suffer life-crunching consequences, this is the case of Mary, who married Paul.

For the record, no definitive legal penalty exists against idealism, and the only person who can call the limits and say, ‘enough’ would have to be the providing person in the relation who is rarely seen as the victim.

Mary had always been sympathetic towards the communist cause, especially ever since she first attended the meeting of student-wing of the Labour Party in her university. She was working on her thesis for Masters in Literature. The speaker was Paul, a law graduate, who by that time, appeared and failed for the second time in his final examinations for Masters in Commerce. He elaborated on the ideas of guaranteed work, primary education and food for all sections of the society which appealed to Mary’s guileless persona. She met him a few times after his speeches and they got to know each other.

Paul was a down-to-the-atom level believer in the communist agenda and an active full-time worker in the Labour Party. She saw him as a person who sacrificed his entire career for reforming the society, depending solely on the meagre provisions by the party for his sustenance. She wanted to support that kind of a person, an idealist. And his father was a celebrated martyr in the communist movement.

She was surprised that her decision surprised even the agenda makers of the party, some thinking openly that her alliance with Paul was bound to fail within a year or so. But when his extended family became a constant appearance in her home, reality slowly sank into her. They were neither communist nor non-communist. That is to say, they neither believed that sharing chores is important nor that earning their own cake is important. They had nothing to do with believing in anything. They just wanted a piece of cake which they normally wouldn’t dream to get otherwise in the real world. What truly perplexed Mary was, Paul genuinely believed that it was their right to think and act so. Was this the nature of communism she married into?

It was about the time she was struggling to understand the seemingly impossible idealism of her husband when her foetus was aborted in the third month of her pregnancy. Her doctor chastised her for refusing to stay restful and for singlehandedly cooking and cleaning up for the packs of distant relatives who visited them to congratulate her for pregnancy, and stayed with them on and off  as privileged guests for three straight months and then abruptly left one day, after she returned home from the hospital and started crying. “You’ve got to make many sacrifices like this to keep up our ideals” Paul said, and shared with her, his mother’s idea about them adopting his sister’s youngest autist kid, since her family was not earning as much as Mary, and it’d only be truly communist of her to help them out in this matter, instead of trying to have and raise her own kids. That was the first time she shouted at him, “That’s not the communism I signed up for!”

Years passed and Paul’s family returned with their financial ‘needs’ aka ‘rights’, after Mary cracked the job interview at the oldest college in the region and secured a permanent and high paying job. She also completed her Phd and had two kids, a boy and a girl, who looked too healthy to uphold communist ideals, later in their lives. That upset the family. But Mary was upset that after ten years at her job, the only piece of property she had on her name that can be guaranteed to her kids was the house they were living in, and only because the bank manager convinced Paul that the person who owned the house would be the one obliged to pay back the mortgage amount, so the house can’t be registered to the list of needy relatives that Paul suggested.

This however, upset Paul. The entire system was purposefully built against his idealism. He had to think harder for a greater reform. He had to think beyond the Labour Party. It was then that Paul suddenly realised that the leaders of Labour Party can never be as idealistic as he was, and he immediately removed himself from the party.

Idealist

Things turned uglier after a short newspaper column printed of Mary’s professional achievements in the local newspaper and she failed to mention in the interview that she ‘shared’ the credit with her idealist husband and family. It was about the same time that Paul introduced his ideal method of sharing assets amongst the family according to the principle of greatest need, and started using Mary’s income for the trial run of his experiment, that he withdrew from their joint bank account, in which Mary was the sole depositor.

Mary was thoroughly convinced that she needed no more idealism in her life and closed the existing joint account and diverted her salary to a separate account that she managed. And all hell broke loose. It started with physical assaults, in his hope that her ‘corrupted mind’ would be set right, and ended when he started pressurising her to sign the papers for a hefty sum of life-insurance on her name with Paul as the primary nominee. Paul genuinely believed that she was corrupted beyond repair, and her life was of no more value to the ideal society he envisioned, anymore.

Mary left her home along with the kids that next morning and rented an old apartment. She filed for divorce and was granted one without a financial settlement after four years of legal battle, along with the custodian rights over her kids. Paul cursed the injustice, and his words only met with deaf ears. But he refused to vacate Mary’s home, in which he lived with his newly wed wife Elizabeth, a nurse who was divorced from her former husband because she was confirmed barren. She allegedly failed in an attempted suicide in the first month of her newest marriage, unable to handle Paul’s idealism.

Paul however vacated the house and handed over the keys to his daughter at the church, in under a year, before the court directed the police to see so. For one, he wanted to avoid legal penalty, in which Mary had no real interest, and also because he feared for his life. Newspapers said that he opened an institute in the name of Elizabeth and collected donations from the rural youths with the promise of ideal jobs, but defaulted and fled the town soon after. It was stated, the police caught him and he was facing criminal charges now. Paul never quite understood where his idealism went wrong. But he never questioned the foundations of his ethics.

Mary learnt her lessons the hard way, and finally decided to live peacefully now, absent any idealism that she couldn’t handle. She never cheated anyone in her life, and never expected nor accepted anything that she didn’t earn. That was enough idealism for her. But she never learnt that it was in essence, Capitalism.

– Avinash Kumar