Top 3 Pro Capitalist Hollywood Movies

Top 3 Pro Capitalist Hollywood Movies

Posted by: on Dec 5, 2014 | No Comments

Over the years, a number of movies have revolved around capitalism, system stability and economic crisis. There are an even greater number of documentaries

Sheldon Richman: His Beliefs and Contributions

Sheldon Richman: His Beliefs and Contributions

Posted by: on Nov 19, 2014 | No Comments

An American writer, Sheldon Richman, is the vice president of The Future of Freedom Foundation (FFF) as well as the editor of the monthly journal of the FFF,

Friedrich Hayek: Teacher, Philosopher, Author and More

Friedrich Hayek: Teacher, Philosopher, Author and More

Posted by: on Jul 2, 2014 | No Comments

During the Great Depression, John Maynard Keynes and Friedrich Hayek were building their economic models. After fighting out their fundamental differences at various debates, Keynes prevailed.

A Review of Mancur Olson’s Power and Prosperity

A Review of Mancur Olson’s Power and Prosperity

Posted by: on Nov 30, 2012 | No Comments

Renowned social scientist and economist Mancur Olson is best known for his treatise called The Logic of Collective Action. But, it is another work of his that also deserves attention. In Power and Prosperity, Olson deals with the oft repeated question – why does an economic divide persist between countries?

Equal Income Distribution – Characteristic of Free Economies?

Posted by: on Jul 13, 2012 | No Comments

The wealthiest countries are those that have free economies. There is a popular belief that the more capitalist economies in Europe, North America and even Asia (like Japan) have greater financial inequalities. But the true picture reflects a different scenario altogether. Such countries are better off than the socialist economies when it comes to distribution of wealth.

Free the People, Control the Government: A Lesson from Hong Kong

Posted by: on Jun 29, 2012 | No Comments

It is often believed that countries that are small are easy to govern. It is also believed that high population impedes economic development. There is one nation that shattered these popular beliefs… Hong Kong!

Democracy after Capitalism or Capitalism after Democracy?

Posted by: on Apr 4, 2012 | One Comment

Democracy after Capitalism or Capitalism after Democracy? Does the order really matter? This is a question I have always wondered about. Democracy and capitalism have always been thought in the same light. Irrespective of the order, the very coexistence of these concepts has been a vital cog in the wheel of development of the West. However, to consider their order irrelevant will be a bit of ignorance. Why do I think so? Read what’s next…

 

So, in case of Democracy and Capitalism, is there a favorable order? To explain my body of thought, I’ve explained an example each from the two possible scenarios.

 

CASE STUDY-1: Democracy after Capitalism

 

I’ll cite the example of the birth of capitalism in USA. Being a British colony prior to its independence, America was an obvious witness to feudalism. As many economists believe, feudalism was somewhat of a precursor to Capitalism in its rawest nascent form. Capitalism found its roots in the US as early as the late 1600s. All was well till the implementation of The Stamp Act in 1763, which forced Americans to pay hefty taxes on all legal and financial transactions. The growing influence of independent industrialists meant that the Act was to be met with stiff opposition. The Boston Tea Party followed in 1773 and three years later, in 1776, after the successful American Revolution, the United States of America was declared an independent democratic country with the unison of 13 states.

 

To surmise, the birth and growth of Capitalism led to the independence and, subsequently, democratization of America (as it was then called).

 

CASE STUDY – 2: Capitalism after Democracy

 

I can think of no better example than India to elaborate on. Being one of the richest economies in the Middle Ages, India was the cynosure of all colonial powers for the resources she provided. In fact, it isn’t a surprise that ours is a country that was under foreign rule for decades. More than 70 years since we were declared a sovereign, secular, democratic, republic nation, we are yet to establish a capitalist, free-market driven economy that is independent and not answerable to the government. What we have seen is Crony Capitalism that has hindered economic growth; the prime reason we are still stuck in the third world. Crony Capitalism refers to what we have seen in Indonesia, Thailand, Nepal, Egypt, Iraq and now in India. Government through its regulations, licenses and approval processes decides the winners and losers. In a free market, it is how well you serve your customers that form the basis of Capitalism. In India, it is how well you serve your political masters, which decides the fate of your business.

 

My point here is in stark contrast to the one in the previous case. We experienced Capitalism (not in its true forms) long after we had democracy.

 

Coming back to the initial question, how does it matter if Capitalism precedes Democracy or vice-versa? Well, it does. In the former case, it was the rise of capitalists that brought about the American Revolution. By the time America got independent (read turned democratic), the economy was already in fast forward mode, thanks in no small part to the capitalist nature of it.

 

India’s primary problem is that even though it was, and still is, a democratic country; the government interfered, and still does, with running the economy. I’d even say that ours is a rather Confused Economy; as has been evident in our growth since we have turned a Democracy. At the risk of sounding repetitive, I’d still reiterate that a free market is what our economy needs to run on its own feet again. Till then, its Democracy -1; Capitalism-0.

 

Shutting Down Sweat Shops isn’t Going to Help!!

Posted by: on Oct 7, 2011 | No Comments

One of the oldest and perhaps the most misguided myths about capitalism is the notion that businesses and factories exploit the poor. Among the various anti-capitalist propagandas being touted by the Marxists, one of the most striking is the sad image of a sweat shop chock full of children slogging away at minimum wages for big companies and corporations such as Nike. Their argument against these big corporations and their sweat shops is simple and straightforward; sweat shops exploit these children to rake up huge profits, so they need to be shut down.

Arguments such as these are a staple of the pro-welfare argument. The oppressed, the downtrodden and the poor need protection and welfare to help them rise up and stand at the same level as us. The question that irks me here is whether the welfare programs set up by the government will really work or will the tax payer’s money just end up again in the hands of middlemen and government officials.

What we need to understand here is that government welfare handouts are not going to help these people. What they really need is opportunities. This is what will actually help them grow. Coming to sweat shops, how do you think shutting them down is going to help those children? They need those wages and closing down these sweat shops will take away the only opportunity they have. They might just as well starve to death, or worse – be forced into more exploitative professions, like girls being pushed into prostitution.

The answer to this conundrum lies in facilitating rapid growth in India’s per capita income, rather than condemning and penalizing sweat shops for providing opportunities. An increase in the per capita income will help parents send their children to school instead of sweat shops to earn daily wages. This is what happened to the sweat shops in the western world and this is exactly how sweat shops are going to end in India!

In the Name of Capitalism: All’s Not Well!!

Posted by: on Sep 28, 2011 | 2 Comments

Sarah Palin’s speech earlier this month in Indianola, Iowa tore apart Washington’s political fraternity. While it may have left her presidential aspirations in a dicey situation, her speech attacked government officials and politicos who are getting wealthy by helping out their corporate cronies and friends on Wall Street in exchange of votes for the favors rendered. She called it ‘crony capitalism’ – where the government, big businesses and corporations along with big finance come together in collusion. As a result of this, it’s the little guys who are losing out. Palin further said that this crony capitalism is, “not the capitalism of free men and free markets.” It is the same “crony capitalism that destroyed Europe’s economies.” While what she said was generally right, I got stuck with something else she was talking about – ‘crony capitalism’.

Crony capitalism is just jargon coined to mislead people into believing capitalism is unfair and exploitative. In fact, crony capitalism is nothing more than looting what is rightfully yours and mine. It has nothing to do with capitalism, or for that matter free markets and exploitation. So what exactly is crony capitalism all about, if it’s not capitalism? An example of crony capitalism would be Suharto’s regime in Indonesia. During Suharto’s 30 year reign (1968-98) as the President of Indonesia, businessmen made a killing. As long as Suharto’s family got a share of the spoils, businessmen could get any license they wanted. This ensured market monopoly and hence huge profits for Suharto’s cronies.

In normal conditions, where the government does not interfere or meddle with the market competition, only those companies or businesses will prosper that satisfy their consumers – not those who use unscrupulous means to gain market monopoly and deliver substandard products or services.

Let us look at a hypothetical situation to better understand how this affects businesses and consumers i.e. you and me. Suppose, you and I prefer using Samsung’s Galaxy Tab to maybe say Apple’s iPad or any other similar product. In such a scenario, Samsung would be the one making profits. As a result, its share values will go up and provide it with the capital to launch even more such products in the future – a win-win scenario for both the company and the consumer.

However, suppose Apple gets some of its cronies in the government to ban Samsung’s Galaxy Tab, in a bid to gain market monopoly. In this scenario, the profit Apple makes will be at our expense. This is crony capitalism. It cheats us, it cheats businesses (Samsung) and it kills productivity.