Business Isn’t Capitalism

The Left has done an excellent job over the years of portraying Republicans as the “party of business.” 

There is an unfavorable implication to this title in a society in which many – unknowingly viewing life through a Marxian prism – aided by propaganda in academia and the arts, have a negative view of private enterprise as consisting of miserly Scrooges and evil Montgomery Burns’s accumulating vast wealth on the backs of the poor.

Mitt Romney (Center) pictured during his time at Bain & Company in an unfortunate pose by 2012 electorate standards. (Image Source: The Atlantic)
Mitt Romney (center) pictured during his time at Bain & Company in an unfortunate pose by 2012 electorate standards. (Image Source: The Atlantic)

To be for business in their zero-sum worldview is to be for those who have achieved wealth and status, the devils to the poor, meek and downtrodden angels, angels stuck in their position thanks to evil businessmen and an inherently unfair society.

The Left personifies (Soros and facts aside) or at least purportedly supports the underdog, and how can you oppose the underdog?

As with most all disinformation campaigns, this portrayal was based on a kernel, and perhaps even more than a kernel of truth. Republicans historically promoted economic policies such as tariffs that “protected” certain favored businesses, at the expense of consumers who thereby were forced to pay higher prices for goods.

From a cultural perspective, Leftist radicals were against “the man,” from Madison Avenue mad men to the dutiful suburban Ward Cleaver types who upheld the traditional order, and who were decidedly not Leftist radicals.

In more recent times, such lines have blurred to a degree, as politicians have conferred benefits upon shifting industries and constituencies, and in turn received funding and votes from varying blocs as the political winds have shifted (see the financial services industry in 2008 and 2012). Remember, despite there being “fat cat” Republicans like Mitt Romney, the chief venture capitalist in all the land, and overseer of many many Solyndras, is Barack Obama.

An auction sign is shown at bankrupt Solyndra headquarters in Fremont, Calif., Monday, Oct. 31, 2011 before Wednesday's auction. Solyndra received a one half billion dollar loan guarantee from the government before filing for bankruptcy in Sept. 2011. (AP Photo/Paul Sakuma)
An auction sign is shown at bankrupt Solyndra headquarters in Fremont, Calif., Monday, Oct. 31, 2011 before Wednesday’s auction. Solyndra received a one half billion dollar loan guarantee from the government before filing for bankruptcy in Sept. 2011. (AP Photo/Paul Sakuma)

In recent years, political opportunists and free-market ideological purists alike have awakened to and begun to decry “crony capitalism” – a bipartisan problem – for what it is. It is a system whereby politicians and businesses work together to produce rules, regulations, tax breaks and handouts, legalized bribery and boondoggles that benefit the few at the expense of the many. If you’re looking for the ever-elusive fascism (minus the heavy-handed totalitarianism), which I would loosely define as business and government working hand in hand, you’ve found it. 

Astute politicians, not to mention principled ones, could use the renewed populist sentiment amongst conservatives, libertarians, independents and perhaps even to a degree some disaffected Democrats to their advantage. In their argument, they would do well to articulate the fact that business and capitalism are not synonymous. 

Capitalism means free enterprise. It is a wholly voluntary system in which buyers and sellers, consumers and producers freely negotiate and trade, to their mutual benefit. It is a democratic system in which he who gets the most votes in the form of revenues and profits wins, but is constantly forced to provide better products at lower prices if he is to survive, all to the benefit of the consumer. It requires in its purest form the protection of individual liberty, the sanctity of the contract, enforcement of private property rights, a stable currency, consistency in the spirit and application of the laws and a culture imbued with a belief in merit, work ethic and virtue.

Photo Credit: Reuters
Photo Credit: Reuters 

Businesses on the other hand sprout in both capitalist and socialist economies. If you want to see where an economy fits, or is trending on this spectrum, look at the number of individuals whose jobs are directly or indirectly tied to the state. If a country is overrun with armies of lawyers, regulators, compliance officers, consultants, accountants, bureaucrats and assorted paper-pushers, not to mention businesses who are only financially viable thanks to government, while they may be “businesses,” they are by no means capitalist enterprises in any strict sense.

Peter Schweizer’s essential “Extortion” provides for some great fodder in the realm of such phony businesses, for lack of a better term. Remember Anita Dunn? While during her time in the Obama administration, Dunn was a “staunch critic of the hedge-fund industry and of Wall Street for their excessive compensation,” Schweizer writes, Dunn left to become director of the consulting firm SKDKnickerbocker, where she specialized in “strategic communications,” offering her advice to hedge funds to boost their image against…political attacks on hedge funds. Schweizer also documents numerous other examples of bureaucrats writing byzantine laws with arcane nuances like Dodd-Frank, and then heading to the private sector to consult with firms on the unintelligible laws they helped to craft in the first place.  

At an even greater extreme is Thomas Friedman’s beloved China, where the benevolent and efficient leaders centrally plan the economy, and through their “tightly-held” “capitalist” businesses yield ghost cities and prosper in part by literally stealing ideas and technologies from others. Or take a look at Russia, in which most recently Vladimir Putin pulled off perhaps the greatest money-laundering operation in history, with an alleged $30 billion of the estimated $50 billion plowed into Sochi flowing to friends of Vlad behind the quasi-legitimate 2014 Winter Olympic games.

A stock investor reacts near a board displaying stock prices at a brokerage house in Huaibei in central China's Anhui province Monday June 24, 2013. Global stock markets reeled Monday, with Shanghai's index enduring its biggest loss in four years, after China allowed commercial lending rates to soar in a move analysts said was aimed at curbing a booming underground lending industry. (AP Photo) CHINA OUT
A stock investor reacts near a board displaying stock prices at a brokerage house in Huaibei in central China’s Anhui province Monday June 24, 2013. (AP Photo) CHINA OUT

In other words, there is a qualitative difference between businesses created to meet the demands of and only able to survive because of the state, and businesses formed to meet or create the demand of, and survive only at the behest of consumers. 

Which brings me to my second point: being pro-business is about creating the conditions for free enterprise, not about direct support for business through the application of government force.

To be pro-business in the capitalist sense means to be pro-individual. It means to be for the people.

Businesses are vehicles whereby enterprising individuals are able to meet a demand or create a demand by providing a superior good or service at a price that the market can bear. In the process they create countless jobs and wealth for people with diverse skills, interests and abilities. They are voluntary, collective institutions that help individuals achieve more than they could by themselves, working in decentralized harmony.

The job of politicians is to create a climate for businesses to be easily funded, readily conceived and quickly expanded and improved, free of interference and undistorted by shifting rules, regulations, currency values and perhaps most of all centrally-planned and thus artificial interest rates. For all of these intrusions distort the price system, leading to mass economic errors. All of these economic interventions are bad for the people — to be anti-capitalist is to be against the people.

In sum, it is up to us to delineate between business and capitalism, and by standing on the side of capitalist enterprises, articulate that what this really means is standing for the people — individuals and families that want to pursue their life, liberty and happiness — not the politicians.

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