Enemies of Capitalism by Briggs Armstrong

[Stephane Budge]

New Rule: neomercantilists, neoconservatives, and statists are no
longer allowed to call themselves "free marketers." People who call
themselves free marketers such as Bush, Paulson, Greenspan, and
Bernanke are the primary threat capitalism faces. These false prophets
of capitalism are the greatest friends that proponents of socialism
have.
Many prominent American figures claim to be proponents of free markets
but in practice advocate neomercantilist, corporate welfare policies.
These policies eventually, and unsurprisingly, lead to disastrous
economic and social consequences. These catastrophes are then blamed
on capitalism, free markets, and deregulation, at which point,
socialists are easily able to convince the distraught public that
capitalism is a failed experiment and only massive government
intervention in the markets can save them. Such is the way that
capitalism dies, eaten away by a cancer from within.

The real mystery is not that some of the loudest proponents of free
markets often institute policies that are antithetical to free
markets, but that the general public, as well as learned scholars,
rarely challenge these claims. In general, the public simply accepts
that if a person claims to believe in capitalism and private-property
rights then they are truly capitalists. In truth, most politicians who
claim to be champions of free-market principles are anything but.

It is unfortunate that all of the scoundrels who make such false
professions of faith cannot be brought to justice, at least not in
this article. I will however, focus on some of the better known
perpetrators of this fraud. George W. Bush, for example, has claimed
to believe in free markets so many times that it could fill volumes.
In practice, however, the changes he has made consistent with
capitalist principles are few and far between. Bush used his position
of power to expand the corporate-welfare system throughout his
administration, but it was toward the end of his second term that he
did the most damage. Under Bush's watch, private businesses have been
the recipients of corporate welfare, sometimes leading to
nationalization, on a scale never before seen in American history.

The public is familiar enough with the events surrounding the
nationalization of AIG, Fannie Mae, and Freddie Mac, as well as the
bailing out of various banks and auto manufacturers, as to not warrant
recapitulation here. In an interview on CNN, Bush stated, "I've
abandoned free-market principles in order to save the free-market
system."

Only in the mind of Bush can this claim seem logical.

As the president prepared to attend the G-20 summit, he vowed to
defend the free market against calls for global regulation. Yet he
also stated, "I'm a market-oriented guy, but not when I'm faced with
the prospect of a global meltdown."

It is statements such as these that provide the proverbial fuel to the
socialist fire. When one of the nation's most visible proponents of
capitalism claims that he has abandoned it, because, without big-
government policies, capitalism itself would be destroyed, there
remains little work for those who desire socialism. Thus it is easy to
see how those who believe Bush to be a true capitalist could be
persuaded to accept the propaganda that the free market has failed,
and that government must step in to save the day.

Now consider another "free marketer," Ben Bernanke; surely he of all
people is a true capitalist. I am sorry to say that even the chairman
of the almighty Fed is not a capitalist. The Federal Reserve System is
little more than a central-planning organization created in secret in
Jekyll Island, Georgia by a group of the nation's most powerful
bankers.

If centrally planning the price of corn and other goods is in
violation of capitalist principles, then how is centrally planning the
price of savings and borrowing (by altering the amount of money in
existence) considered part of the free market?

The institution's inherently anticapitalistic nature aside, Bernanke's
actions during the "crisis" have shown him to be a nonbeliever in the
free market. He, along with Paulson, used the ensuing panic to demand
powers never before granted to the Fed. We are all too familiar with
what Bernanke used his powers to do, from brokering (and funding)
mergers to nationalizing banks. No true proponent of capitalism could
ever condone the actions taken by Federal Reserve Chairman Ben
Bernanke. Yet even before the "crisis," socialists were holding
Bernanke up as the apotheosis of capitalist ideals. The initial
reaction to Bernanke's appointment can, quite humorously, be read here
at the World Socialist website.

The life of Hank Paulson almost reads like a clichéd tale of the
American Dream. Paulson distinguished himself at both Dartmouth and
Harvard; he briefly worked in the Nixon administration before climbing
to the top of Goldman Sachs. To be sure, anyone capable of running
Goldman Sachs must be an exceptional businessman. This does not mean,
however, that he must be an exceptional capitalist. During the
economic "crisis," Paulson consistently used the powers of his
position as Treasury secretary to save big business from the
consequences of their poor decisions.

When the powers traditionally held by the secretary of the Treasury
were insufficient for him to bail out Wall Street's biggest financial
institutions, he used fear to force Congress into granting him
unprecedented powers. Language from his initial three-page proposal
for the $700 billion bailout is telling: "Decisions by the Secretary
pursuant to the authority of this Act are non-reviewable and committed
to agency discretion, and may not be reviewed by any court of law or
any administrative agency."

The entire three-page bill can be read here. This is an individual,
who, along with Bernanke, orchestrated the largest government
intervention in capital markets in history — who claims the power to
determine which ones will be saved with taxpayer money and which will
be allowed to fail. What person even vaguely familiar with the tenets
of capitalism could believe Paulson's professions of faith in the free
market?


Unfortunately, words seem to matter more than deeds. By and large, the
public has been unable to recognize the disconnect between the actions
and words of the leaders who espouse free-market ideals. This is a
dangerous phenomenon. Ad hominem arguments should generally be
discouraged, because the message should be more important than the
messenger, but I believe this is one scenario in which it would be
prudent to "shoot the messenger." In this particular situation, the
messenger is, in effect, mistranslating the message. The actions of
these individuals, taken in the name of capitalism, are having a
profoundly negative effect upon public opinion of capitalism.

Those who profess the virtues of capitalism when it is politically
expedient, only to abandon such principles in practice, must be held
accountable. Anyone who understands capitalist theory has an
obligation to refute the claims made by those who falsely profess free-
market principles. All those who are dissembling themselves as
capitalists in the public sphere should be confronted at every
opportunity by every true capitalist. We must not become subject to
the bystander effect and rely on someone else to take up the fight. We
must all challenge the false claims, for the enemies of free-market
principles are many and vocal.