When the history of the present era is written – assuming there will be enough left of civilization to even allow for the writing of history – it will be written, as always, by the victors – not necessarily victors of the military or even political kind, but of the economic kind. In other words, it will be written by those whose economic point of view was dominant when the crisis began, and prevailed for the duration of the crisis. Which means that we can already predict, at this early date, how that history will be written, since the dominant point of view – even on the so-called conservative side – is one of statism, collectivism, and socialism. The “unknown ideal” (as Ayn Rand termed it) of capitalism, if never known in pure form since the founding of the Republic, was still within reach for the first 150-odd years. But in response to the stock market crash of 1929 and the following depression, it was dealt a stunning, if not fatal, blow by the New Deal and that which followed. But the final, fatal blow is being struck even as we speak, not only by successive administrations but by the inheritors of capitalism itself, who have opted to take the moral and philosophical low road to a squalid form of personal wealth, rather than a high, principled road to legitimate wealth (for themselves and society in general). The result is that this society is going to wind up poorer than if they had never existed – perhaps poorer than if the postwar economic boom, the Reagan administration, etc., had never happened. When the landscape is littered with so-called “capitalists” who not only prospered because the organizations they were running failed, but who prospered _because_ those organizations failed, we know that we have, for all intents and purposes, seen the last of true capitalism, or of anything bearing even a faint resemblance to it. “Free enterprise”, of course, has not been totally free since the first government monopoly was granted, and the first anti-trust act was passed (and these two are, by the way, causally related)... and that was a long time ago. But the basic notions of invention, innovation, healthy speculation, capital investment, and the like, all of which contributed to our prosperity over the last 100-plus years, have faded away almost to non-existence. What we have in their place is a well-entrenched system involving, as one commentator put it, “private gains and public losses” -- in other words a system where major investment is virtually risk-free, since if it is not explicitly insured against losses, it winds up being retroactively insured, i.e. by “bailouts”. But major investors who wind up with a profit -- well, they get to keep it, basically. Nice work if you can get it! Minor investment, on the other hand, either by ordinary people in the stock market or by individuals and partnerships in small businesses, operates at a distinct disadvantage, since it is not only subject to harassment, over-regulation, and confiscatory taxation by the government, but also serves as a cash cow for the advantages and privileges government bestows on big business. As a result, as we tend toward a two-class system for individuals (lower and upper, with a missing middle) we will also tend toward a one-class system for business (no “small”, only “big”, and economically indistinguishable from government, AKA fascism).
One mystery is what forces gave rise to this, in effect, gigantic act of treason against capitalism and free enterprise. How did the free-wheeling capitalists of, say, the pre-World War I era wind up leaving their inheritance to the self-centered, egomaniacal, corporate parasites whose antics we see played out in the news every evening? My theory is that the process began in earnest with the New Deal, which was undertaken, allegedly, in response to the “failures” of capitalism. We know, of course, that the real failure was on the part of government, in the form of ill-advised, politically-expedient, and short-sighted laws and regulations. Capitalism was, in effect, set up for a fall, and the stock market crash of 1929 was that fall – or at least the first big piece of it. Once government had nailed down the rationale for converting our system into a socialist one – i.e. once it had convinced everyone, from the leadership in Washington to the youngest school child, that this was the only way the country could be “saved”, then they went to work enacting even more laws and regulations, and multiplying the size of government many times over, in order to “remedy” the problems that had been caused by government in the first place. And who was set in judgment over the whole process, to decide if it had been a success or failure? Government agencies, of course! -- along with their enablers in the press and the other media of the time (radio, film, etc.).
Under these conditions, any businessman with principles, who was not inclined to turn into a government whore, would have gone into another line of work. Atlas would have shrugged, in Ayn Rand's words. So the entire character of not only business but of "business men" changed as a result of the New Deal; that is my theory, at any rate.
So this country moved rapidly from self-definition as a capitalist, free enterprise system to a socialist, welfare-state system (although the latter terms were seldom used in the political arena by its proponents, only by its opponents). A later term which was applied to the same system was “mixed economy” -- implying that it was the best of both capitalism and socialism... whereas we can see today how it has turned out to be the worst of both. And as a result of this new catastrophe – which, I suspect, was carefully programmed and not accidental at all – the lid is finally being nailed shut on the coffin of American capitalism. And one of the people who is driving the nails the hardest and fastest is none other than George Soros.
Now, one's immediate reaction to this suggestion might be that, hey, how can you accuse George Soros of being anti-capitalist? Hasn't he made his fortune by, basically, being a smarter, more aggressive capitalist than anyone else? Well, the “smarter, more aggressive” part is true, but the system that he excelled in and came to dominate is not real capitalism. Rather, it's the perverted, distorted version of capitalism discussed above. Has Soros ever made what is called an honest dollar? More likely, he's been a master gamer of the system who is always one step ahead of the “mixed economies” and the morally/politically corrupt people who run them. In other words, he has thrived on the distortions introduced by government regulation and interference, and continues to do so. So the last thing he would want is for the world economy to return to, or embrace, a purely capitalistic, free-enterprise model. His strategy, rather, has been to encourage the hybridization process, i.e. the unholy marriage between business and government, in pursuit of his own ends and those of whatever causes (all collectivist at heart, you may be certain) he chooses to support. And so he is ever eager to pronounce doom upon capitalism and free enterprise – to bury it and to dance on its grave.
This was demonstrated just recently when Soros spoke to economists and bankers at Columbia University. And check out these statements (quotes or summaries) from an alleged “capitalist”:
o “The economic upheaval has its roots in the financial deregulation of the 1980s (read: Reagan) and signals the end of a free-market model that has since dominated capitalism countries.” Yeah, well, to be considered “capitalist” it does help to have a “free-market model”, no doubt. How do you separate the two? Soros seems to know a way. But in any case, note how all the blame is laid at the door of government for, basically, not being big and oppressive enough.
o “Liberalization of the financial industry begun by the Reagan administration has led to a series of crises forcing government intervention.” But are any details provided as to precisely how this “liberalization” led to “crises” that “forced” government intervention? Maybe the “crisis” was just that some fat cats were losing money; that would certainly call for government intervention, as it does today.
o “The global recession, triggered by the collapse of the U.S. housing market, has 'damaged the financial system itself,' he said.” Would that be the same “financial system” that was forced, by Congress and by government regulators, to provide subprime loans to people who anybody could tell would never be able to keep up payments on them? It's not the recession that damaged the financial system – it's the government that damaged the system by aiding and abetting the housing collapse, thus leading to the recession. So his answer is that more regulation is the answer to the problems brought on by over-regulation.
o “Regulators are in part to blame because they 'abrogated' their responsibilities.” I would say, on the contrary, that they did their jobs too well. Besides, regulators only do the job they're chartered or allowed to do by Congress.
o “The philosophy of 'market fundamentalism' (by which I assume is meant the law of supply and demand, vs. a command economy) was under question as financial markets have proved to be inefficient (unlike government!) and affected by biases (ditto!) rather than driven by all available information.” Well, the last time I checked, the market _was_ information – the market generates its own information as to things like prices and the value of stocks, bonds, other securities, properties, and so on. Without an unfettered market to perform this function – and I never heard of its being all that “inefficient”, quite the opposite in fact – it will have to be done by government, on a command basis, and the chances of “biases” entering in are roughly 100%. You have to give the market credit for at least not being overly-influenced by political correctness and social utopianism... whereas for government, those considerations are the be-all and end-all. Actual value, as determined by supply and demand, is of no importance.
And Soros goes on to pronounce more gloom and doom. Clearly the only thing that will save us is a legal and regulatory structure that will make the New Deal look like anarchy. But you can be sure that Soros already knows exactly how he's going to weasel his way through it to his own advantage.
Now, one could dismiss Soros' ravings as those of a senile, demented, old-time socialist – except that he's anything but senile and demented, and he really does mean everything he says. And he is one of the people who it's important to listen to for the simple reason that he seems to be one of the few public figures who might actually be in charge. He might be the only core member of the Regime whose name and face people can recognize. Is this because he's not content to work behind the scenes, or because the Regime has to have at least one spokesman in the public square at any given time? I suspect the latter, although he certainly has the personality type for grandstanding and demagoguery. And it is his perspective – to return to my original point – that is going to dominate any future discussion of this time in our history. The picture to be painted is quite simple: The villains are the free market, deregulation, capitalism, conservatism, and the Republicans, Reagan in particular. The heroes are government, collectivism, socialism, statism, the liberals, the Democrats, and, of course, George Soros. It will be, in all major respects, a re-packaging and updating of the New Deal myth. And notice how, even today, people who question the New Deal are considered contrarian outliers and cranks. How long will it be before people are allowed to question the Obama New Deal? Many generations, I suspect. But that may not be necessary, since the only thing, arguably, that saved the first New Deal from utter failure was the advent of World War II – and what luck! (Kind of makes you wonder about Pearl Harbor, doesn't it?) Will the Obama New Deal be vindicated – or perhaps just obscured – by a major war as well? It is said that “war is the prosperity of the state”, and we already know that governments and regimes are not loathe to start wars just in order to create, or create the illusion of, prosperity. On the other hand, it's just possible that we'll be in such bad shape before long that the very notion of a major war – or any war at all – will be completely fanciful. It's all we can do now to hold on in Iraq and Afghanistan. At least in the 1930s we weren't already fighting a debilitating war overseas. But I would not put it past the government to try and squeak by this way once again – and they certainly won't have to look far for a casus belli. I mean, shucks, Sarah Palin was all ready to start a war with Russia over Georgia.
Another question is why capitalism, or free enterprise, can never seem to escape this sort of scapegoating. Is it simply too much trouble to mount an effective defense? Or is it just easier to identify with the aggressor and work out an “arrangement” -- you know, like the kind where the CEO gets tens or hundreds of millions in bonuses while being, in effect, a government employee? Are there any principled people left in the business world? Not that I've noticed. There is just a very wide variety of parasites, sociopaths, and prostitutes. Is this a natural stage in the evolution – or devolution -- of capitalism? I certainly hope not. But we don't have that many cases to go by. If the most capitalist system of all time has come to this – and in not even that much time – maybe it does reflect a fatal flaw. But then what are the alternatives? The data are already in on state socialism – Soviet Russia, Nazi Germany, Red China, etc. “Soft” socialism, e.g. the New Deal, seems to make things worse while avoiding total catastrophe – faint praise for sure. Anyone interested in going back to the Middle Ages and the guild system? At this point it might be worth a try. But first we'll have to figure out some way to deal with George Soros.