There are a lot of people who are ignorant of what capitalism means, so I intend to devote part III of my series on anarcho-capitalism to explain what capitalism really is (here you can read part I and part II). The first thing I want to point out is that we do not live in a capitalist world regardless of how often statists (meaning those who support the state) shout it in the streets, in social media, television programs or newspaper articles.
Capitalism means that we as individuals make voluntary barter with each other that we both profit from in a free market, without any outside intervention that enforce rules for our barter or demand a cut of the trade. In the past it could be that you exchanged milk for eggs, but today we are living in a less primitive and more specialized world and it is very seldom that you can exchange one item that you want for another item the other individual wants right away. We need to have some kind of medium of exchange as an intermediary in the barter so that both individuals participating will feel satisfied. This medium of exchange is called money and I will write more about money in a future part in my series. A free market is therefore barter that takes place between different parties and individuals voluntarily, often involving money, without anyone interfering. This means that no government regulations exist in a capitalist world, so you might understand now that we don’t have a free market. What do we have instead, you perhaps ask?
We have a state-regulated market where lobbyists who bribe and influence politicians most, and have the most money and resources, can set the rules for the market and enforce laws and regulations that favor their interests at everyone else’s expense. This is big business, trade unions and non-goverment organisations very good at, and that is why this system is called corporatism. What corporatism does is that large companies and lobby organisations use the state monopoly of violence to push away competitors, who could provide the same services, but better and for a cheaper price than themselves. Competition from smaller innovative companies are legislated away so that the already large companies in a market don’t risk being outcompeted. The only reason that large companies and lobby organisations can obtain advantages is that we have a state monopoly which enables laws and regulations to be introduced and punish those who violate them in the form of heavy fines or imprisonment.
The taxi union’s lobbying to push away the company Uber from their market is an example of corporatism. Uber is a prime example of new innovation that makes it possible to offer passengers better, cheaper and safer transportation compared to the old taxi system. Taxi lobbyists claim that they want to introduce new laws against Uber to protect you as a citizen. It is as far from the truth as one can get. They do so only because they know that they would be outcompeted if they do not get the state to introduce new regulations that protect their old heavily-regulated business model at the expense of competition from new innovative businesses.
Corporatism is everything from requiring expensive licenses for goods and services in specific markets, such as banks and pharmaceutical companies, to trade tariffs so that no foreign goods are allowed to compete freely with domestic companies.
I hope you can see that what we have today is not a free market, and we do not live in a capitalist world. We live in a corporatist world where government regulations distort the market to benefit a small group of people, and this happens everywhere! So what does this mean for you and me?
It means that we get more expensive prices and unnecessarily high unemployment. On a state-regulated corporatist market prices are kept high on everything from medical supplies to food. Licenses and regulations also make it more expensive to start businesses and create new jobs for individuals. So why things are expensive and unemployment is high, is not because of capitalism but because of the lack of capitalism.
In a free market prices on goods and services would decline and this would be a great benefit to many people, especially poor people. The prices would decline because many people would be interested in selling variations on different products to get a share of the market. Even nisch products that only interest a few individuals would be able to exist and make profit when no monopoly of violence increases the costs through taxation, licenses and regulations.
In an anarcho-capitalist world, nobody would be able to use the law and the monopoly of violence to give themselves privileges and hinder competition. The only way to gain influence over other people in an anarcho-capitalist society is by selling goods or services that other people think improves their lives so much that they voluntarily pay you for them (no violence involved!). Unlike today’s corporatist market where those with resources (read money) and political contacts have the bulk of the market, they decide who will be allowed to do barter and they enrich themselves at our expense!
Therefore, I am 100% capitalist! So the next time you hear someone shout “capitalist pigs!” please go up and correct that person by saying “Excuse me, it is actually called corporatist pigs!”.
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