Dr. Vic Reasoner

THE ARMINIAN MAGAZINE. Issue 2. Fall 2011. Volume 29.
Date published to Extended January 2012

I finished Michael Moore's Capitalism: A Love Story. His purpose was to advocate revolution which would overthrow capitalism and replace it with socialism. The most frustrating aspect of the DVD was that he never defined either capitalism or socialism. Capitalism was accused of taking advantage of misfortune. Capitalists were called vultures and capitalism was labeled a radical evil. It was implied that socialism was the solution to the problem.

But rather than presenting a logical explanation of why capitalism was inherently evil and why socialism was inherently good, Moore focused on personal cases of individuals who were evicted from their homes. While he presented several scenarios which were designed to create sympathy for the victim, we never really were told what had transpired. I do not doubt that in at least some instances the banks or companies were wrong, but it does not logically follow that because of particular cases of abuse that the entire capitalistic system is the problem. Moore employed a technique called guilt by association. There was not necessary a logical connection between the specific cases he was presenting and the case he was attempting to make against capitalism.

It is interesting that the movie opened with an attempt to compare Rome to the U. S. However, the Roman empire was a dictatorship. As long as I have lived I have heard preachers talk about why Rome fell and use that as a warning that America, too, could fall. They gave such reasons as free bread and circuses, high taxation and immorality, but never before had I heard that it fell because it was capitalistic. In fact, it was not.

All of the ancient world empires were dictatorships in which the king, pharaoh, or caesar claimed to be god. They were wealthy at the expense of their subjects and there was not a middle class. At a later point in history kings appealed to divine authority for their legitimacy. This argument was called the divine right of kings, meaning that it is God's will for you to obey me. Finally, we had an atheistic world empire called communism in which the state was god.

However, we also see in history the magna carta and later the social contract. This concept is based on the biblical idea of covenants in which the subjects must agree to the terms under which they are governed. Thus the highest authority in the U. S. is the constitution. The point of a constitution is limited government. The government only has the right to exercise authority in areas where that is conceded by the people.

Moore's reference to our constitution was very disappointing. He asks a guard where in the constitution capitalism was prescribed and not getting a satisfactory answer implied that it is not in the constitution. He picks up three phrases, "we the people," "welfare," and "union" to imply that socialism is prescribed. This argument would not convince anyone who is beyond grade school. "We the people" actually refers to the consent of the governed to grant the government certain limited power. "To promote the general welfare" does not prescribe a welfare state, but actually means that individual citizens collectively surrender certain freedom for the common good. "A more perfect union" does not refer to labor unions, but to a collective agreement.

Here I have to digress to say that the use of the term "more perfect" is highly irregular. If something is perfect, how can it become more perfect? Actually we are still trying to perfect our union. That means our government is not perfect and we are still working at it. And so it is legitimate to have these kinds of civil discourses.

But before we continue we have to define some terms. So what is capitalism? Capitalism is a free market economy in which the government does not interfere with buying and selling. The old term was laissez faire, a French term which means literally "let it be." In practice it means that transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies. It is the belief that the market forces of supply and demand will work things out.

In 2003 while in Nigeria there was unrest in the streets because petro was too high. A general strike was planned. And so the government stepped in an determined the price of petro. Did that solve the problem? No, although petro was reasonably priced you could not find a station which was open. The owners determined to close their stations rather than sell at a loss. And so the government backed down and the stations reopened.

The alternative is for a special interest group to appeal to the government for protection or privilege. When the government begins to interfere with market forces they tend to make things worse. If it sides with the workers against the owners, the owners will shut down because the playing field is not level. If it sides with business and banks against the workers, you have corporate greed.

And here is where I want to give Moore his due. The best part of the movie was his documentation of what happened with the recent bailout. Moore blamed both sides - a Republican president and a Democratic congress. However, his conclusion was wrong. This was not free-market capitalism at work - it was in fact socialism. Socialism is when the government takes charge of certain sectors of the economy.

Here I need to comment on a couple of coops that Moore featured. I like the coop model of ownership and management, but I would not regard it as socialism because it is not government control or manipulation of market forces. However, I find it interesting that Moore advocates the coop saying that it has proven itself to be lucrative. But that is an appeal to capitalism! In a sense when I buy stock in a company that also allows me a share in the profits. Profit sharing is not a unique concept. Even Walmart offers that to their employees.

It seems to me that when you come to the economy you either have to leave it alone or control it all. Socialism is kind of a half-way house to communism. Communism is where the government controls all aspects of life. There is no middle class in communism. Everyone shares the wealth - but there is no wealth unless you are a bureaucrat. In other words, everyone is equal but some of us are more equal than others.

Throughout history no attempt to implement communism has succeeded. You know enough about hippy communes to verify that. There is no incentive to work when you do not keep the rewards of you labor. Yes, I believe in helping the helpless but I believe that should be voluntary and not a compulsory redistribution of wealth under the authority of a government bureaucratic system. No one has my best interests at heart better than I do. All I ask from my government is to be left alone. My faith is in a big God, not big government.

And so capitalism provides freedom but there is also risk. Socialism provides security, but at the expense of freedom. I was interested that Moore was enamored with Roosevelt's second bill of rights. According to Roosevelt I have the right to a good paying job, a house, an education, and health care. But who will administer these "rights"? Government interference has driven up the price of housing, education, and health care.

What if the government guarantees me a good paying job making widgets, but there is no longer any demand for widgets? The socialistic model says the government should subsidize our widget plant. But when you subsidize something for which there is no market you only compound the problem. Look at the recent example with the Volt car, a glorified golf cart. The Obama administration used our tax dollars to bail out GM and they created a car which no one wants. Under a capitalistic system it is no one's business what I drive. Under a socialistic government, they make Volts and under communism no one has a car unless they are a government leader.

In the olden days, when people lost their job they often found a different line of work. I would not even think of asking the government to guarantee my job. I believe in self-reliance and a work ethic. That coupled with a free market means that I just need to discover what there is a market for. No need to subsidize the making of buggy whips when you can get a job at the automobile factory.

I would assert that the U. S. has not operated on a truly free market economy since the days of Roosevelt. Roosevelt was influence by the economic theory of John Maynard Keynes. Keynes was a socialist who said you can stimulate the economy if the government will spend money fast enough. From the days of Roosevelt forward both parties have operated under Keynesian economics. The conservatives just did not spend it as fast. In 1971, Nixon - a Republican, said "we are all Keynesians now." In early American history some presidential campaigns were based on a "hard currency," meaning that debt or credit was illegal. This would prohibit fractional reserve banking in which a bank only retains a small percentage of its assets.

The immorality of Keynesian economics is that it is based on easy credit. The recent banking scandals prove the bankruptcy of Keynesian economics in selling bad debt and getting to government to guarantee it. While Moore touted the superiority of the European socialism, what we are seeing right now, especially in Greece, is the collapse of their economy. The Obama administration recently used our tax money to bail out the European banks. When you have more takers than givers, any system will collapse. We may not be far behind.

And so I agree that we need a revolution. But I would advocate overthowing our existing socialism and returning to capitalism. I further would charge Moore with hypocrisy. He himself is a capitalist who is worth $50 million. But socialists always want to use my money to fix the problem. If he is so committed to socialism, he could start by distributing some of his wealth.

According to Moore, Jimmy Carter tried to warn us. But Carter was an inept president who got us into a recession. According to Moore, Ronald Reagan was the problem. I believe firmly that Reagan was the greatest president of my lifetime and that Roosevelt was the one who got us into the problem.

I am not trying to be offensive. You asked for my opinion. I teach world history and anyone like Moore who attempts to explain economic trends is going to have to deal with history. According to Moore, Obama was elected to effect change and his election is the beginning of a revolution. But Moore also said that Timothy Geithner had failed at everything he had attempted. But Obama appointed him as Secretary of the Treasury! I think Obama has been a disappointment even to his supporters. Now as he seeks re-election he is making high-dollar speeches to the wealthy 1% while the occupy wall-street movement is trying to implement Moore's vision for a revolution.

I was very disappointed when Bush bailed out the banks. Bush ran as a conservative, but remember we have not have a truly free market president for a hundred years. I think he should have let the banks deal with their own problem. If they are true capitalists, let them risk their own money without using taxpayers money as their safety net.

And I am not opposed to evicted homeowners moving back into their homes as squatters. I think that high interest is immoral and in the case that Moore documented, if they had paid their mortgage for 22 years they had probably paid the bank twice what the house was worth already.

I think Moore is misguided to encourage class warfare. I think everyone pays too much in taxes. I am not envious of anyone's wealth. I want everyone to prosper. I am not in favor of rationing the pieces of the pie, I am in favor of having a bigger pie. I think Moore is naive in his understand of socialism. Yet he ended the movie with L' Internationale, the anthem of international socialism.

Then he ended with Merle Haggard singing a song that implied that Jesus was killed for attacking capitalism or at least the establishment. Jesus died on the cross to atone for our sins, but I would agree that he did offend the establishment. Throughout the movie Moore appealed to Jesus in a very selective way. Essentially Moore employed liberation theology. When communism found it hard to make inroads into South America, because it was strongly Roman Catholic and they were atheistic, they developed liberation theology which basically said that Jesus was a revolutionary like all of the other Marxists. Of course this is just propaganda.

I think Moore's whole movie is basically a propaganda piece designed to create an uninformed reaction to capitalism and a revolution that will lead to something no one has really thought through. And how can we have a civil discourse if their leader is a sheepdog named Shelby?

Remember that all progress requires change, but not all change is progress. I share the occupy wall street frustration with the bank bailouts, but I just don't see that camping out in the city park will change what needs changing. We are going to have to educate ourselves about how the economy works and then hold our leaders accountable. We need less government interference. We are going to have to get out of debt, take charge of our own future, and not depend upon anyone else to take care of us. The price of cradle to grave security is the loss of freedom and I am unwilling to give it up. If we do they will end up using us to take care of themselves.

A much better approach to economics is John Wesley's sermon "The Use of Money." In it he advocates three points:

• Gain all you can - this is the principle of industry or capitalism
• Save all you can - this is the principle of economy or stewardship
• Give all you can - this is the principle of charity or compassionate capitalism