Capitalism Makes Everything Better

– by Gitabushi

Dairy Queen has a lunch basket for $4, $5, or $6 that includes 3, 4, or 5 chicken strips, fries, gravy, drink, and a sundae.

McDonald’s has a $5 meal deal, too, I think.

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Subway’s franchise owners are complaining that the $5 footlong sandwich is hurting their ability to make money.

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The prices might be slightly higher in high-cost areas like New York City, San Francisco, Chicago, or Hawaii.  But these are prices in DC, which is very nearly as high in cost of living (housing, at least, isn’t far off Hawaii pricing).

Everyone accepts this as normal.  It isn’t.

I can buy a full album of music for $10.  Maybe less. It depends on the album, the artist, how famous they are, etc.

Everyone accepts this as normal.  It isn’t.

Everything gets more expensive over time.  Inflation is a reality of life. Everyone wants to make more money than they did last year, and so they get raises, but property values also go up, taxes go up, the cost of goods go up.

Here is where I talk about how candy bars used to cost $.25 when I was a kid (with a digression of how we don’t have a “cents symbol” key on computers anymore).

Everything gets more expensive. Everything.

Except there are significant exceptions in electronics.  And food.  And entertainment.

Why?

Capitalism.

Human nature is human nature.  People will always be selfish, greedy, and corrupt.  Capitalism actually harnesses those urges to make things better.  If you sell something, and want to make more money than you are now, you can slip the local government some cash to help hamstring your competition….but the more successful you are in selling with their help, the more they will demand to keep helping you.   Corruption may work, but it also holds hostage everything you gain from it.  So a better choice is to figure out how to do things better to cut costs.  Which puts pressure on your competition to cut their costs.  Which probably encourages you and them to pressure your supply chain to give you cheaper resources, which gives them incentive to cut *their* costs.

Okay, if you are a regular reader of this blog, you know all this. What’s my point?

I don’t think most people realize what an incredible miracle Capitalism really is. Most people haven’t been alive long enough to see how prices change. Of those who have been, I’m going to assert that most don’t really think about it, or if they do, just complain about how cheap things were when they were a kid.

I’ve always paid attention to inflation. I don’t know why.

When I was a kid, the big soft drink was the 12-ounce can.  It cost a quarter. It stayed that way for several years. Then over the course of about two years, the price rose to $.50 a can, and it stayed that way for at least a decade, even as 16 oz and 20 oz drinks were introduced. The $.99 16-ounce, and then 20-ounce drink became the standard.  Now it’s just under $2 in most places, just above $2 in places taking advantage of convenience. Except that they will often have specials where you can get large cans of cheap soft drinks (like some overly sweetened tea or something) for $.99.

When I was a teen, if you wanted to call a friend out of town, you had to call long distance. It cost quite a bit.  I would wait until after 9pm so it would be $.35/minute. Then the government broke up Ma Bell, and very quickly, the cost became $.10/minute, although you had to sign a contract or do other things to get that as a discounted rate.  And it stayed that way for a few years. Then $.05/minute.  Then cell-phones came in, and you paid for how many minutes you used each month, with an up-charge for long distance.

And then, long distance charges disappeared.  And voice call limits evaporated into thin air.

What I’m trying to give a sense of is how it progressed unevenly.  We hit plateaus of prices.  Then there would be a big change.

When I was a kid, they didn’t have meal combos. You went into a fast food restaurant and ordered a la carte.  The drink was one of the more expensive items on the menu. The largest was probably a 20-ounce drink.  As a la carte prices rose over time, suddenly meal deals appeared. They started at $3 when I was in high school. By the time I finished college, they hit $5. And stuck there for decades.  Along the way, drink sizes rose to the point that in some fast food places, the *smallest* you can get is 32 ounces. And now, many meal combos are $7 or $8, and that’s understandable.  But there are enough places and options offering $5 meal deals that it is worthy of note.

They may be loss leaders. In some cases, they may be harming profitability of franchise shops.  But while everything has more than doubled in price over the last 30 years, it is still possible to eat a filling, nutritious meal for the same price as back in 1988.  Competition, and cost-cutting moves like economy of scale, still make it possible for sellers in multiple industries to make good money and live well despite prices roughly similar to 30 years ago. Or cheaper.  This is insanely successful.

As I’m fond of saying, the United States is probably the first nation in history where poverty is marked by obesity, rather than starvation.

Now compare to what has happened in every socialist nation in history.  Yes, yes, true socialism has never been tried. Well, it has never been tried because it *can’t* be tried. The selfishness, laziness, and corruption that has always prevented True Socialism will always prevent True Socialism. It can’t be avoided. As those human foibles are incompatible with Socialism, humans are incompatible with Socialism.

But Capitalism harnesses those weaknesses and conditionally turns them into strengths.

I’ve been writing about Socialism more often than probably should be necessary.  I know I’m preaching to the choir in most cases.  But there are two reasons I’m doing it. First, I follow two speculative fiction authors on Twitter who are committed Socialists.  I can’t just go berate them, because of respect for celebrity and success.  They have no reason to listen to me, and would block me if I just got derisive and dismissive.  So I feel like I have to craft my arguments carefully so that I can make dispassionate, reasonable arguments against their views, and then pick my moments.  I know I probably won’t convert them, but it is a worthwhile challenge.  Talking through my musings here helps prepare me to take the battle to them, calmly and respectably, when opportunity arises.

The other reason this is important, though, is because Democrats are moving more Left, and Socialism is becoming their openly stated goal. Nationalized Health Care, higher taxes, Bernie Sanders defeating Hillary in the 2016 Dem primary (but losing only cuz Hillary cheated), the popularity of Democrat Socialist Alexandria Ocasia-Cortez…

We need to be better prepared.  We have to marshal our arguments and take it to the kids.  And I hope my writings help you in this, to some extent.

Yesterday, I had a notion that is growing more attractive to me: There is no such thing as an economic system.  There are only political systems that can be combined in different ways.

What is an economic system? What is an economy?  An economy is just people exchanging goods, services, and markers of value.  So an economic system is the rules that govern how people exchange these things.  And what do we call the framework which determines how these exchanges are governed?  Political systems.

The Socialist author who engages me often is very congenial. We haven’t actually devolved to an argument even once. He recognizes that Socialism hasn’t worked, but explains it with a variation of the “True Socialism” argument.  His point is that due to human weaknesses, authoritarianism creeps into the Socialism and destroys it. He posits that we’ll have non-authoritarian socialism when we achieve true Post-Scarcity. My counter-arguments are:

1. Post-Scarcity isn’t a threshold you cross. It is a gradual spectrum, and our food prices indicate we are already in post-scarcity. Moreover, there are two reality shows that prove we are already ridden with post-scarcity problems: My 600-lb life and Hoarders.
2. Because of the problems of laziness and over-consumption, Socialism will still inevitably display authoritarianism
3. Wealth is energy. We won’t have total post-scarcity until we have unlimited free energy, and Socialism, with its focus on giving people fish every day instead of teaching people to fish, siphons away resources needed for us to achieve unlimited free energy

Point Two is restating my point that there are no economic systems, only political systems that govern the way we interact for exchanging value.

So what Capitalism is, is a system where the government does not, in principle, pay attention to your exchanges of value.  It can’t ever achieve that purity of principle, because people are lazy, corrupt, and selfish.

But it goes back to the political view of people and value.  Socialism believes that mankind can be perfected, and that if all the negative influences are eliminated (through pervasive education when young, execution when adult), people will live effortlessly according to the socialist rules of value production and exchange.  Capitalism believes that mankind can never be perfected, and that best you can do is establish incentives so most people have reason to interact with honesty and honor, and establish penalties for those who don’t.

I could keep musing on this for hours.

One of the follow-on thoughts I’m caught in the grip of considering is how the US Constitution set up checks and balances to minimize corruption and fraud, but how zero-sum power games crept in via Wilsonian Progressivism, and now wealth masses are big enough to swamp the whole system if we don’t start making some changes.  So what changes can be made to our political system to add more checks/balances to discourage vote fraud, nationalizing of local elections, and the socio-economic version of regulatory capture?

I think we can improve on the original US Constitution. Not by replacing or amending it with new/different goals, but by extending the checks, balances, and decentralization of power beyond just federal government, yet without impacting inherent freedom.  More thought is needed.

Also, I will soon write an article on how wealth/income inequality is actually a sign of societal wealth, of economic health.

What thoughts did this overlong piece stimulate?