The official site of bestselling author Michael Shermer The official site of bestselling author Michael Shermer

Why People Don’t Trust Free Markets

January 29, 2008
The new science of evolutionary economics offers an explanation for capitalism skepticism

In his magnum opus on the power of free markets, Human Action, the Austrian economist Ludwig von Mises noted: “The truth is that capitalism has not only multiplied population figures but at the same time improved the people’s standard of living in an unprecedented way. Neither economic thinking nor historical experience suggest that any other social system could be as beneficial to the masses as capitalism. The results speak for themselves. The market economy needs no apologists and propagandists. It can apply to itself the words of Sir Christopher Wren’s epitaph in St. Paul’s: Si monumentum requires, circumspice.” If you seek his monument, look around.

Capitalism may not need apologists and propagandists, but it does need a vigorous scientific and rational defense as evidenced by the fact that so many people still distrust free markets. Market solutions to social problems are generally received with skepticism. Businessmen are distrusted, corporations looked at askance, and there is a well-known resentment against those who have most benefited from markets. (As one New Yorker cartoon featuring two people in conversation reads: “I hated Bill Gates before it became so fashionable.”) Why do people distrust free markets?

Part of the answer can be found in our history. Because we lived for so long in small groups of a couple of dozen to a couple of hundred people in hunter-gatherer communities in which everyone was either genetically related or knew one another intimately, most resources were shared, wealth accumulation was almost unheard of, and excessive greed and avarice was punished. Thus, we naturally respond to a free market system in which conspicuous wealth is paraded as a sign of success with envy and anger. Call it evolutionary egalitarianism.

Throughout most of the history of civilization as well, economic inequalities were not the result of natural differences in drive and talent between members of a society equally free to pursue their right to prosperity; instead, a handful of chiefs, kings, nobles, and priests exploited an unfair and rigged social system to achieve gains best described as ill gotten.

People also have a remarkably low tolerance for economic ambiguity. Free markets are chaotic and uncertain, uncontrollable and unpredictable. Most of us have little tolerance for such environments, and we have learned to expect that social institutions such as the government will bring a level of certainty to society. People who cannot afford (or who choose not to purchase) insurance against acts of God typically expect acts of government to save them.

As well, there is well-documented liberal bias in the academy and the media against free markets. A 2005 study by the George Mason University economist Daniel Klein, for example, found that at two of America’s leading institutes of higher learning Democrats outnumbered Republicans among the faculty by a staggering ratio of 10 to 1 at the University of California, Berkeley and by 7.6 to 1 at Stanford University. Measuring political attitudes through voter registrations among faculty in twenty different departments, in the humanities and social sciences the ratio was 16 to 1 at both campuses (30 to 1 among assistant and associate professors), and in some departments, such as anthropology and journalism, there wasn’t a single Republican to be found.

In another 2005 study on “Politics and Professional Advancement Among College Faculty,” Stanley Rothman, S. Robert Lichter, and Neil Nevitte discovered that only 15 percent of those teaching at American colleges and universities describe themselves as conservative while 72 percent said they were liberal, and that figure climbed to 80 percent in such departments as English literature, philosophy, political science, and religious studies, with only five percent labeling themselves as conservative. In a 2005 publication in the Georgetown Law Journal, Northwestern Law Professor John McGinnis reviewed the faculties of the top 21 law schools rated by the 2002 U.S. News & World Report graduate-school rankings and found that politically active professors at these top law schools overwhelmingly tend to be Democrats — 81 percent contributed “wholly or predominantly” to Democratic campaigns while just 15 percent did the same for Republicans.

In a manner and potency matching academia, the bias in the media is against free market economics. A comprehensive 2005 study conducted by UCLA political scientist Tim Groseclose and University of Missouri economist Jeffrey Milyo, published in the Quarterly Journal of Economics, measured media bias by counting the times that a particular media outlet cited various think tanks and policy groups, and then compared this with the number of times that members of Congress cited the same groups. “Our results show a strong liberal bias: all of the news outlets we examine, except Fox News’ Special Report and the Washington Times, received scores to the left of the average member of Congress.” Not surprisingly, the authors discovered that CBS Evening News and the New York Times “received scores far to the left of center” and that “the most centrist media outlets were PBS NewsHour, CNN’s Newsnight, and ABC’s Good Morning America.” Interestingly, USA Today — that ne plus ultra of pop print media — was closest to political center of all newspapers.

The strongest reason for skepticism of capitalism, however, is a myth commonly found in objections to both the theory of evolution and free market economics, and that is that they are based on the presumption that animals and humans are inherently selfish, and that the economy is like Tennyson’s memorable description of nature: “red in tooth and claw.” After Charles Darwin’s The Origin of Species was published in 1859, the British philosopher Herbert Spencer immortalized natural selection in the phrase “survival of the fittest,” one of the most misleading descriptions in the history of science and one that has been embraced by social Darwinists ever since, applying it inappropriately to racial theory, national politics, and economic doctrines. Even Darwin’s bulldog, Thomas Henry Huxley, reinforced what he called this “gladiatorial” view of life in a series of essays, describing nature “whereby the strongest, the swiftest, and the cunningest live to fight another day.”

If biological evolution in nature, and market capitalism in society, were really founded on and sustained by nothing more than a winner-take-all strategy, life on earth would have been snuffed out hundreds of millions of years ago and market capitalism would have collapsed centuries ago. This is, in fact, why WorldCom and Enron type disasters still make headlines. If they didn’t — if such corporate catastrophes caused by egregious ethical lapses were so common that they were not even worth covering on the nightly news — free market capitalism would implode. Instead it thrives, but just as eternal vigilance is the price of freedom, so too must it be for free markets, since both are inextricably bound together.

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144 Comments to “Why People Don’t Trust Free Markets”

  1. DC Says:

    thank you for this article – except I believe you must have been constrained by the limited space of editorial acreage to draw attention to the fact that in a market economy, only those transactions take place that both sides find beneficial, and that hence the market is based first and foremost on cooperation!
    It is not by accident that the successful business people tend to make others wealthy in the process. Only robbers can enrich themselves at the expense of others.



  2. Greg Says:

    It’s not free markets people are afraid of. The real fear is corporate irresponsibility and unaccountability.

  3. Lee Herrin Says:

    Mr. Shermer,

    Your great work in Scientific American led me to your writings here. This article is insightful and well phrased – a feast for the mind. Thank you for your work.

    Lee Herrin

  4. Ben Nissen Says:


    I thought this was very interesting. I do agree that
    the media is overwhelmingly democratic in opinion, but at the same time the media is typically a tentacle of the free market world of profits, advertising and ratings. Although they may not agree with conservative values, they do unwillingly adhere to the needs of the free market just to stay on the air.

    On the one hand, I think you’re correct about the commonplace skepticism of capitalism as a system but on the other hand, there isn’t a living human being in the modern-industrial-communications era that hasn’t had their nose shoved deep in the everyday propaganda of the free market – billboards, tv commercials, product placement, etc. etc. I’d say this system is celebrated more commonly than it is resented (consciously).

    And although this system has built a world of comfort, longer life expectency, abundance of resources, and incredible technological advancements – it is still driven amorally by profits. Many companies consider fines for breaking regulatory laws to be part of the “investment” – How much are they going to lose vs. how much they’re going to gain from, say, polluting a river.

    I don’t think the free market is guided by human decency anymore than it is guided by human selfishness. I think it is guided by the bottom line, which typically reinforces the selfish tendency in human beings. I think It takes human decency to prevent that bottom line from becoming the only measure for success or failure in society.


  5. Manuel Alex Moya Says:

    To act in one’s rational self-interest is to be moral.

  6. Paul Ojanen Says:

    The old axiom ” Do not wander far from your field of expertise” might apply here. I will not berate you too much for the simplicity inherent in your article,merely due to its length. But some things are obvious. First, calling sources for NYT and CBS news “left of center” is ludicrous; they are as mainstream as you get. I doubt very much you get a questioning fact out of them. Second, what now exists is not any more a free market than Exxon-Mobil is a single producer of one product competing in a Marshallian market; it is a conglomerate, with enormous political and economic power that is part of an oligopoly, receiving enormous subsidies from the public,not limited to military action. And to make it quick, most of ordinary people’s lives have been improved because of social reforms not inherently foudn in the free market; vaccinations developed not by profit seeking corporations, but by altruistic, irrational scientists ( tongue in cheek please), wealth sharing policies such as the 8 hour day, progressive tax policies, wage guarantees etc etc…. Finally, the work organization is a cooperative institution, only fascistic in nature, with top down command and the wealth being funneled off elsewhere to imaginary shareholders and executives. The people doing the work get little unless guaranteed by law. Ordinary people’s lives improved most when those transfer guarantees were in place after world war II. As they break down again, we see poverty and instability increase, while the wealth divide grows. Michael, I love your work, but investigate before you spout, else those of us with harpoons spy your spray.

  7. Skeptic Says:

    >>>>”First, calling sources for NYT and CBS news “left of center” is ludicrous; they are as mainstream as you get.”

    Err, that is Shermer’s point: the media’s “mainstream” is significantly to the left of the general population’s “center”.

    >>>>And to make it quick, most of ordinary people’s lives have been improved because of social reforms not inherently foudn in the free market.

    Actually, social reform *is* “inherently found in the market”. This is not because the free-market society is perfect and requires no reform–if it didn’t, there would be no motive for anyone to start progressive movements–but because only the free-market societies does social or scientific advance have a chance of succeeding.

    Jenner and J. S. Mill weren’t in it for the money. But only in free-market England could their ideas or discoveries become popular. In the USSR, Jenner would have been sent to Siberia for praticing “capitalistic” medicine. In the Islamic world, Mill would have been deemed a a heretic and stoned to death.

  8. Peregrine Says:

    Good morning
    Long time fan, but there are a few points in this article I’m not sure I agree with.

    1.1 Party affiliation is not the best measure of economic attitude because parties are not single issue behemoths. I suspect that social progressivism also plays a large part in academics stated affiliation.
    1.2 Another problem with using party affiliation to masure attitude to capitalism is that while there are real differences in ecnomic policy between the major US parties, both are at their cores, free-market capitalist organisations. The differences that exist exist in how the excesses of the market are to be reined in and the relative contribution from and benefit to different types and wealth levels of natural and juristic persons to the common good. neither party stands for either untaxed, unfettered capitalism or serious collectivism.
    so, even the crtics of the free market you use as examples are fundamentally capitalist.

    Certainly I suspect some of the individual people (academic or otherwise) you mention may not be, but the data you offer does not demonstrate that.

    2. The measure of media biad you use assumes a close correlation between citizen attitudes and congressional speechmaking and neglects any policymaking influence of those criticised by the think-tanks used by the media but not be representatives.

  9. Peregrine Says:

    >>>>>Jenner and J. S. Mill weren’t in it for the money. But only in free-market England could their ideas or discoveries become popular. In the USSR, Jenner would have been sent to Siberia for praticing “capitalistic” medicine. In the Islamic world, Mill would have been deemed a a heretic and stoned to death.

    Well, yes and no. I think capitalist societies _tend_ do have a freer enchange of ideas than non-capitalist societies, but the existence of HUAC in capitalist America and the assimilation of Classical and Hindu ideas under the “golden age” claiphate indicate that it’s not a simple 1-1 correspondence.

  10. Balak Says:

    Michael Shermer really goes out of his depth when he lapses into this unworldly capitalist happy-talk. Just look around at the overall state of the world that capital has wrought – over 15 years since the ‘free-market’ preachers declared the ‘end of history’ after the destruction of the USSR. … imperialist war, poverty, raging racism, climate catastrophe, the all-sided attack on civil and political rights championed by both wings of the Property Party… one wonders what planet Shermer is living on.

    This really highlights a weakness with the ‘skeptic’ movement as a whole, Shermer, like Dawkins, Hitchens, Harris et al consistently avoid or brush aside what seem to be the most obvious social features of the rising tide of religiosity and credulity they are so quick to denounce…

    If capitalism had made everything as wonderful as Shermer believes, why are people so desperately grasping for religion and the supernatural? Why is the most ‘laissez-faire’ of the advanced capitalist economies, the U.S., also the most dominated by religious backwardness? Shermer et al don’t appear able even to pose this question, let alone answer it.

  11. peregrine Says:

    Sorry. Caliphate

  12. Skeptic Says:

    If you do away with economic freedom (Capitalism) because it can be abused, you must do away with political freedom (like voting) and freedom of speech, since they, too, can be abused: it was people voting for candidates who started “imperialistic wars” and listening to the press who supported such candidates that were just as responsible for what you consider the current sad state of affairs. Come to think of it, you would probably have to do away with religious freedom, too, since it, too, can be abused by people joining backward cults, etc., as you note.

    These four freedoms, experience shows, go together. If you want to stop capitalism from “exploiting the workers” and have a “fair” economy, you better stop freedom of the press and have a one-party state, too, or else you risk that some evil capitalists will “brainwash” the population into opposing your economic redistribution plan, or else some opposition candidate being elected to replace you in the middle of its implementation. And, of course, freedom is religion is right out–you don’t want the workers distracted by silly superstitions as they are exploited, do you?

    This was tried before. It was known as the Communist block. Of course, the the result of trying to stop the abuse of economic freedom by forbidding it altogerher (as well as freedom of speech, religion, and representation) only led to abuses so much worse it makes all of Capitalism’s sins pale into insignificance.

  13. Balak Says:

    The post above highlights all the problems with Shermer’s approach: putting the assertion of various cliches (unsupported by historical evidence) in place of a coherent argument for capitalism.

    This is a disservice, among other things, to the very system the poster wishes to support. There is one powerful (though hardly original) argument that Shermer can rightly adduce for capitalism: the incredible human progress unleashed by capitalism industrial revolution and it’s offshoots. (Hence a substantial part of the Communist Manifesto is a glowing tribute to the capitalist mode of production.)

    But history did not stop in 1848, nor, even then was it possible to assert the “Readers Digest” silliness repeated above. “Experience” does not “show” any particular bond between capitalism and democratic freedoms. During the revolutions of 1848 in Germany and the Austro-Hungarian Empire, in fact, the capitalists were happy to forego their own aspirations, and form a block with the monarchs and aristorcrats against the democratically inspired movement of the working classes.

    While capitalism became hegemonic in France and England through mass uprisings and revolutionary wars, in Germany and Japan it was imposed almost entirely through draconian state policy.

    Moving forward to the stage of capitalism’s degeneration during the 20th Century, It’s no secret that every fascistic movement of the 20th century, from Mussolini to Franco to Hitler to Pinochet enjoyed the support of the propertied interests… not only in their own countries but internationally. This has been the pattern, in fact, wherever and whenever capitalists have felt their rule even slightly threatened by the labor movement.

  14. Skeptic Says:

    Capitalism surely isn’t a sufficient condition for democratic freedoms (look at China today, for example). But it certainly is a a necessary one. All, or virtually all, non-capitalistic societies–e.g., Marxist and Theocratic ones–destroyed all democratic freedoms. Usually, they also destroyed millions of lives as well.

    This means that while to support capitalism does not necessarily make one a supporter of freedom, to *oppose* capitalism *does* make one an opponent of democratic freedoms.

  15. Balak Says:

    “…life on earth would have been snuffed out hundreds of millions of years ago and market capitalism would have collapsed centuries ago.”

    Wow, Shermer imagines the profit system living on for millions of years after life on earth has been snuffed out!

    Now THAT’S faith in ‘market capitalism’! Ronald Reagan would be proud.

  16. Peregrine Says:

    Er, Balak, I don’t think he was actually presenting that as an and situation there chum.

  17. Skeptic Says:

    (Shrug) apparently, Balak is angry people didn’t fall for his “Capitalism is EVIL” schtick, so he decides to make snarky comments on how “stupid” Capitalists–such as Shermer–are.

    As Christopher Hitchens noted, so-called “atheistic” communism is actually a religion, with a high priest-cum-God (Stalin, or whomever is in charge), a dogma all “wise men” believe is obviously true, and a stupid/evil “enemy” who must be destroyed in a cosmic battle, and so on.

    Balak is a follower of the religion, but is too comfortable living in the corrupt, unjust, capitalist West to actually consider it his enemy. So he stops at the “capitalists are stupid” stage–which allows him to feel intellectually superior, as a side benefit.

  18. Balak Says:

    Capitalists are not necessarily stupid, by any means. But in the present period of capitalism’s decay and degeneration, there is an unmistakable dumbing down of bourgeois culture (exemplified by, for example, the village idiot from Texas now at the pinnacle of power). No longer resting on the material base of a domestic industrial economy, up to its eyeballs in debt, and lulled by the constant repetition of its own lies, the U.S. ruling class has come, slowly but surely, to mistake its spin for reality. Unfortunately, this diseased, parasitic ghost of the capitalism’s past can still impose unspeakable nightmares on the present by virtue of its grip on an immense weight of destructive military force… literal legions of trained murderers, torturers, and nuclear-armed racist freaks.

    Truly, however tightly Shermer & Co. keep their eyes shut and whistle their happy tunes, the capitalist system in its imperialist phase is the main enemy of human freedom everywhere on the planet.

  19. Skeptic Says:


    Communist propaganda–and, for that matter, Fascist, Theocratic, and other anti-liberal propaganda–have declared liberal Capitalism and the democratic society it creates as “dying”, “decaying”, “degenerating”, etc., ever since capitalism (or democracy) were invented.

    In the meantime, however, it is usually the Fascist, Communist, or other anti-freedom “progressive social system of the future” that tends to come to an end first.

    The reason? Just look at Balak himself: for all his ranting about “dumb decaying capitalist society” he prefers to live in just that “decaying” society than anywhere else. So do most other people in the world, since freedom, political and economic, is far better than the alternative, even if can be abused, as it often is in Capitalist and Democratic countries.

    I’ll start believing the talk about the coming end of capitalism when leaky boats and rubber rafts start going *FROM* Miami *TO* Cuba, instead of the other way around.

  20. Balak Says:

    U.S. imperialism not only blockades Cuba, but also routinely rapes, exploits, and represses movements for change in all the surrounding Caribbean and Central American CAPITALIST countries. But of course, only CUBANS are offered full rights and privileges as soon as they can set foot on U.S. soil.

  21. exile Says:

    At the risk of sounding like a Marxist, I tend to think that modern capitalism is a kind of synthesis of ideas, of which the free market is one – but not the only one. One of the reasons the West (including here Japan, Australia and South Korea) is so successful is the existence of state-funded or subsidised education, welfare and health systems. These, apart from the benefits of having a literate, competent and healthy workforce, at least partly insure people against failure and therefore allow them to take risks.

    Free Market ideologues tend to ignore all this and assume that free markets alone are responsible for the advances of the West in the last 2 centuries.

  22. Skeptic Says:

    But why *would* the Cubans *want* any rights from decaying, stupid, dying capitalism in the first place? Judging from your description of the USA, it should be a place everybody should be fleeing from, not a place everybody wants to get in to.

    Yet it is the exact opposite–not only in Cuba, but all over the world. The millions of the world’s immigrants are on a one-way track: FROM the (ex-) socialist and communist countries TO the capitalist ones.

    Strange, if capitalism is collapsing, and socialism is the way of the future. It seems like the opposite, doesn’t it?

    You, yourself, prefer to live in a capitalist country. If you really do hate the USA as much as you claim you do, and live there, all I can conclude is that you are a lazy coward. You *know* you shoudln’t live in the evil USA, where imperialistic capitalism’s ill-gotten gains subsidize your western standard of living on the backs of millions of poor in the third world. But… it’s just too damn convenient to leave.

    (Well, either you’re a lazy coward, or all this “evil capitalist imperialism” thingy is just words, a stase you’re passing through in college, which is the more likely possiblity. In that case, don’t worry, it’ll pass.)

  23. Paul Says:

    Abduction is a poor argument. Yes, the USA is a far better nation than Fascist Germany or Soviet Russia. Yes, the majority of the most important technological and social improvements in recent history came about in capitalistic societies. But that doesn’t mean capitalism is the pinnacle of human achievement. It doesn’t mean it’s impossible for us to do better.

    In fact, much of America’s history has been about tempering capitalism. Case in point, U.S. slavery. That was arguably one of the largest human rights violations in the history of the modern world. How can you compare the restrictions Cuba has put on its citizens to the restrictions America, under a free market economy, put on its residents? In slavery, cost and benefit are separated to different individuals, and the rationally self-interested actor can maximize their gain by completely degrading another human being.

    Did the free market fix that? No, it required a war and constitutional amendments. And this has been repeated over and over and over again. Look at the Labor Movement during the Industrial Revolution. The businessmen could maximize their profit by working their laborers in terrible dangerous conditions for endless hours and for terrible pay. Did the free market solve that problem? Did businessmen find they would actually be more successful by giving workers a decent life? No. The workers picketed and struck and voted until they got guarantees of safety and time off and a living wage. Artificial restrictions were placed on the market by society. And I’d say we’re much better off because of it.

    In both those, and in plenty of other situations, a small elite were making gains at a huge expense to other people’s happiness. However, it was working economically. Other companies could have started with less exploitation and tried to steal all the workers, but the reality is that the elite were rich and powerful, and exploitation allowed them to undersell any other company. The only ones with the power and money to change the system using the free market were the elite, and since they were also the ones benefiting currently, that would not be rationally self interested.

    Simply saying “Communist China is worse” doesn’t mean Capitalism is great. There are choices between the extremes of a totally free market and a fascist dictatorship. Telling somebody they’re a “lazy coward” for not leaving a country they see as flawed is a false dichotomy. You can be disappointed with the lack of freedoms in America and China.

    Historically there are plenty of events (ie slavery) that we can identify as a negative aspect of the free market we were able to fix by moving away from the completely idealized version of it. There are clearly social ills in America today. Wanting to fix those doesn’t make us Marxists.

  24. Balak Says:

    I, for one, don’t believe the ‘social ills’ in America can be seriously addressed, let alone fixed, without getting rid of capitalism at home and imperialism abroad.

    (Poor “Skeptic’s” ad hominems only serve to underline his lack of better arguments.)

  25. Sirry Says:

    Ummm… I’ll just point out a few things that Balak says that show misunderstanding and intellectual laziness.

    1st,he decries “imperialist war, poverty, raging racism, climate catastrophe, the all-sided attack on civil and political rights” One at a time, communist nations are just as guilty of imperialist war, I can’t think of a communist country with a higher standard of living than your average capitalist one, racism is on the decline, part of the role of the government in capitalism system is to tax negative externalities like pollution, if it does not kindly address your problems to democracy, and in a non-capitalist system it is impossible for civil and political rights to exist. I’ll explain the last lower down.

    2nd, he uses the word “capitalists” only to describe the wealthy and powerful. A capitalist is really anyone who has the freedom to take part in transactions which improve their lives.

    3rd, he calls fascist states capitalist when they are much closer to socialist states. To quote Mussolini “The Fascist conception of the State is all-embracing; outside of it no human or spiritual values can exist, much less have value. Thus understood, Fascism is totalitarian, and the Fascist State—a synthesis and a unit inclusive of all values—interprets, develops, and potentiates the whole life of a people.” The common thread is subjugating the individual to something else.

  26. Balak Says:

    No surprise that the latest batch of arguments are just as ahistorical as the preceding ones supporting capitalism and U.S. imperialism. Is it lack of knowledge or willful disregard?

    1. There has never been any ‘communist’ country. Communism refers to a stage of human history in which the state (as the apparatus of class oppression) and classes themselves have disappeared from human society.

    2. In history, capitalism has been successfully overthrown only in the economic hinterlands of the world economy (e.g. the Bolshevik Revolution of 1917, later China, Cuba, Vietnam), not in the richest citadels of imperialism. The imperialist centers are far wealthier not by dint of ‘free-markets’ (a fiction) but by centuries of forcible rape and plunder of the ‘colonial’ world (U.S. finance capital was accumulated initially through slave labor of Africans at a time when New York Cit was the largest slave market in the world).

    The societies created by capitalism’s overthrow remain part of the imperialist-dominated global economy, saddled with the heritage of economic dependency and backwardness left by the former masters. Socialism cannot be build on the basis of scarcity, nor is ‘socialism in one country’ a real possibility. Hence – despite throwing out the imperialists and introducing the first rudiments of economic planning, these societies remain deformed by the pressures of the world capitalist economy. Cuba, for example, cannot succeed in fully realizing a socialist society until capitalism is successfully overthrown by workers in the U.S.

    3. From the conditions created by imperialist plunder and unspeakable human misery inflicted by capital on most of the planet, millions of desperate people seek to escape to the affluent imperialist centers – not because of their ‘love’ of capitalism, but because they would like to stop being on the receiving end of its ‘blessings’.

    4. Non-capitalist economies by definition cannot be ‘imperialist’, since ‘imperialism’ is characterized by the export of finance capital (ultimately backed by brute military force).

    5. Finally, fascism indeed enshrines a cult of statist violence – but only against the working class and oppressed minorities, not the possessing classes. Capitalism, seeking release from the ‘impediment’ of dealing with trade unions, for example – has always been the first patron and beneficiary of fascist movements and governments. Name a single example where this was not the case.

  27. Skeptic Says:


    Yes, capitalism is imperfect; yes, pointing out its faults doesn’t mean one is morally obligated to to leave the country; yes, I agree with you that it *can* be improved, in the sense of being made more humane, for example.

    But Balak doesn’t make your–perfectly reasonable–claims. He claims Capitalism is rotten to the core, its very essence is one of evil and opression, that it is far beyond reforming, and that socialism–as a *system*, as opposed to as an “safety net” addition to a capitalist system–is superior.

    Therefore, Balak, unlike you, *is*–it seems to me–morally obligated to leave the evil, capitalistic USA and find somewhere socialist, or theocratic, or whatever, to live. Anywhere else seems better (according to his description) than the evil, capitalistic USA.

  28. HometownQuotes Says:

    Capitalism is the only “market” that empowers the people to do more, be more and inspire more. There are ills that come with anything. What other markets lead to true freedom?

  29. Balak Says:

    More ad hominems, moralism and diversions from the topic – revealing the poster’s lack of confidence in his/her own arguments.

    Capitalism/imperialism is a historically exhausted mode of production offering no perspective for the future of our species except a further descent into war, environmental contamination, and misery for most people on the planet. It’s continued existence represents an obstacle to further human progress. Only a centralized, democratically planned socialist order on an international scale (with its heel planted firmly on the neck of the ‘free market’) can begin to clean up the anarchic mess imperialism has created.

  30. Ulixes Lactanis Says:

    We used to have a U.S.-backed military dictatorship in Greece from 1967 to 1974. I wasn’t born yet, but the propaganda is still here (in movies of that period for example) so I can have some idea about it. It was supposed to be anticommunist (naturally) but it was also anti-free market. There were strict limits on the profit a company could make and the economy was based on state central planning. So, let’s not confuse strategy (not letting the U.S.S.R. put their hands on Greece first) with the empty anticommunist rhetoric of dictators. The Pentagon’s concern was not to “export” capitalism but to have more forces on their side of the Cold War. I guess the same happened elsewhere as well.

    Capitalism can certainly not be imposed. It is what naturally happens when people are left free to decide.

  31. Skeptic Says:

    >>>>Non-capitalist economies by definition cannot be ‘imperialist’

    I supposed this means you think Poland, East Germany, Romania, Bulgaria, etc., etc. were “by definition” not under the USSR’s imperialist control.

    Well, that’s a relief.

    The Berlin wall? Just a figment of our imagination. “By definition”, it couldn’t have existed, since it would mean the USSR was imerpialist, and that’s impossible, as you’ve shown.

    (You’re a college student, aren’t you, Balak? Just an educated guess. At that age, everybody’s either a communist or an Ayn Rand fan… you’ll grow out of it.)

  32. Balak Says:

    What kind of “imperialism” is it that results in free education, health care, full employment, and a *higher* standard of living for those in the “colonies” than prevail in the dominant power? Yet this was exactly the case with respect to most of the ‘Soviet Bloc’. If that’s ‘imperialism’, it certainly doesn’t compare with U.S. capitalism’s ‘free trade’ rape and looting of Mexico, Central America and the Carribean now does it?

    The generous social programs once considered sacrosanct in Western Europe were a direct result of the bourgeoisies there after WWII having to bribe the workers in their own countries *not* to look eastward for inspiration.

  33. Skeptic Says:

    >>>>What kind of “imperialism” is it that results in free education, health care, full employment, and a *higher* standard of living for those in the “colonies” than prevail in the dominant power?

    Well, it’s an imperialism with a secret police, with a one-party state that must obey Moscow’s every whim or else, with no freedom of the press, with no elections, with no freedom of speech, with arbitrary midnight arrests as ‘enemy of the people’, with show trials, with gulag prison sentences for telling political jokes, with ten years waiting for a car, with five year waiting list for a run-down apartment with an outside toilet, and, above all, with lines, lines, lines–eternal standing in line: for bread, for toilet paper, for matches, for beef, for anything and everything that everybody in the west takes for granted.

    But APART from THAT, it was great. Really worked out well.

    (You wouldn’t have lasted a week there, you know.)

  34. Balak Says:

    Aparently ‘Skeptic’ has read a “Bill O’Reilly’s Short Course” or some such on life in the former Soviet Bloc.

    The realities were a little bit more complex, to say the least. But it is clear enough from this caricature that s/he is unable to respond to the points – or defend capitalism on its merits.

  35. Spicy Says:

    Wow, I love the Internet. It brings me such enlightening discussions such as this one, which parallels a conversation I’ve been having with a friend of mine in school. Yes, I am a high school student (going through his “Ayn Rand phase”, so this basically nullifies any points I would like to make. Fortunately, I have already gone through my “communist phase”, as described by Skeptic earlier today, so that’s out of my system. One thing I’d like to point out though is a trend I’ve noticed reading through the comments. It seems as if, though we may never know, humans are inherently evil (which it sometimes seems like), neither a free-market economy or a pure communist state would never fully succeed.

    That’s just my opinion. I can’t wait for each side to pick apart my comment.

  36. Michael Shores Says:

    I have no problem with a free market that meets the very important criteria put forth by Adam Smith, that there must be a large number of willing buyers and a large number of willing sellers. My problem is calling markets which do not meet these criteria capitalist or ‘free markets’. If I wish to buy a woven basket, I can find hundreds in gift shops. If I wish to buy a can of corned beef hash, I may visit hundreds of supermarkets only to find two or three brands. I question whether that is a competitive or free market.

    I also wince whenever I see a huge buyout or merger described as good for competition. Seems to me that concentration just moves us further from the ideal of a truly free market.

  37. Balak Says:

    The ‘purist’ free marketeers love to harp on the image of two ‘free’ individuals entering into contract for an exchange of goods/services in the ‘free’ marketplace. The trick is to implant this abstraction/ideal in the minds of the credulous as the ‘norm’ governing the operations of market-democracy (the two are treated as synonymous), while admitting of course that there are some regrettable ‘distortions’ of this norm in reality.

    What is false, however, is the ‘norm’ itself.
    As Lenin pointed out, the truth is always concrete. The ‘ideal, true free-market’ has never existed, and never will exist, because economic transactions are never abstract: the master never trades on equal terms with the servant, or the rural proprietor with the landless peasant, nor the capitalist owner with the worker, nor even the big corporation with the the local cockroach exploiter. The employer/monopolist/imperialist seeks to maintain not a ‘level’ playing field, but a permanent advantage in which all transactions are ‘freely’ entered into – on his terms. This is not due to individual greed, or moral flaws in human nature, but the necessity of maximizing profit specific to the capitalist mode of production.

  38. Skeptic Says:

    >>>>>Aparently ‘Skeptic’ has read a “Bill O’Reilly’s Short Course” or some such on life in the former Soviet Bloc.

    Not exactly. I live in a country which had many immigrants from the former Soviet Union when the eastern block fell, in the late 80s and early 90s. Some I met as my relatives, some as co-workers, co-students, etc. I am summarizing their description. Believe me, they had worse stories to tell.

    Just seeing the look on their face when they entered the local supermarket for the first time was enough to give the lie to your nonsense about the wonders of the communist paraside. They looked as if they entered Alladin’s cave: “you mean *anybody* can buy *all* of this stuff *without waiting*???”, their face (and sometimes their mouth) said.

    Life in the Soviet Union and the Communist block was bleak, grey, cold, poor drugery puncured by periods of state terror. They *knew*–they told me–that *something* was terribly wrong with this sort of life, but found it hard to figure out exactly *what*: with no freedom of the press, let alone of education, knowing anything about how life in the west really was was forbidden.

    They *did* realize, somehow, that essentially everything in the official news channels was a deliberate, stupid lie, and that by simply inverting what the broadcaster said they are closer to the truth (“the peace-loving USSR had demanded…” = The USSR probably invaded yet another country; “a record harvest…” = bread shortages again, etc.) But this didn’t give them too many clues as to why exactly their government is so evil, or why exactly communism is such a failure, or how much better life in the west was.

    Did you know that it was difficult to find a working lightbulb, or a good pair of shoes, in Moscow–unless you were one of those “connected” to the leadership? I know. They told me. They’d tell you, too, if you ask.

    Anyway, this is my last comment to you. You’re obviously either a troll, or a naive college student who “knows” everything about how the workers are opressed by the evil plutocrats… despite the fact that you’ve never worked a day, or earned a dollar, in your life.

  39. bwago Says:

    The reference to our evolutionary past is bunk.

    First, it assumes most of us still have a genetic connection to cultural norms of thousands of years ago.
    Second, it the assertion that hording of resources or conspicuous wealth were “almost unheard of” is wildly inaccurate; one or a handful of dominate males has been the norm for small human groups for most of human history, and indeed is the case for our evolutionary cousins.

    Yeah, I know this isn’t what most of the article is about, I’m not missing the point, it’s just that this was so wrong I had to mention it.

  40. bwago Says:

    Ah, a good reason not the trust “free markets” is to look at a great deal of human history. Wasn’t the economy far less regulated in the late 1800’s and thereabouts, when companies owned towns, brutalized unionists, and the living wage was virtual slavery? Not to mention the years before the stock market crash.

    Genuinely “free markets” fail for some of the same reasons communism does, although to be sure it is more complicated.

    But regulation is absolutely necessary, to think that the super-rich will at some point decide they have enough money and power is extremely naive.

    This articles talks a great deal about biases in the media and education but doesn’t make many actual arguments.

    “If biological evolution in nature, and market capitalism in society, were really founded on and sustained by nothing more than a winner-take-all strategy, life on earth would have been snuffed out hundreds of millions of years ago and market capitalism would have collapsed centuries ago.”

    After reading that at the end, I think I’ve wasted my time railing against such poor writing.

  41. Balak Says:

    bwago opens another whole can of worms. Poor writing, weak thinking – all in the service of ideology.

    Notice how Shermer’s title itself is so smug and patronizing… “the Onion” could use it to lampoon the skeptic movement.

  42. Skeptic Says:


    Ayn Rand is, I think, wrong, but she deserves credit for what she did. She tackled the age-old question: why be moral, when slefishness is so much more rewarding?

    Plato’s solution was to claim people who are moral will actually come out first in the rat race, ahead of the selfish people, since they are taking good care of their soul, which is much more important than anything else (including life itself).

    Rand’s solution is the opposite: she claims that if someone is selfish, and care for their own prosperity, this will cause them to behave morally, because they will realize that this is best for them.

    It doesn’t work–both claims are obviously false, at least in practice. But Rand deserves credit for facing the problem squarely, and trying to solve it honestly, without recourse to an imaginary afterlife, or to metaphysical notions like the “immortal soul” and its proper care.

  43. Balak Says:

    Especially love the ‘new science of evolutionary economics’ hook!

    Sounds like a great opening for an info-mercial:

    “Why People Don’t Trust (insert name of favourite ponzi-scheme here)”

  44. Chris Says:

    If you think the so called free market is a good thing, then perhaps you should look into Engels writings pertaining to industrial revolution England. The free market is not concerned with the working man– it is however concerned with appeasing to the wants and needs of those with purchasing power. People fear the free market because it is the free market that cuts cost at the expense of lives. The free market is not and has never been concerned with sustainability. That is because the free market recognizes that the demand and therefore profitability in any sector will eventually decline. Therefore the free market’s only interest is maximizing profit over the time period which is deemed the longest that the demand will exist. For example if it is estimated that we will run out of oil in twenty years at a rate of usage in its most conservative form, the free market does not see the gains that can be made over the next 20 years. Quite contrarily, the free market will promote the use of that oil in excess to turn immediate profits. The idea that continued growth is beneficial is an outright lie. All life is constrained by the physics that govern our world. The continued growth that the free market strives for is at the expense of the world around us. Continued use of a substance will deplete certain portions of that substance. That is unavoidable. We consume space, and space is not infinite, it is merely expanding. However we too are expanding in a proportionality to the universe. Therefore the biosphere and us are expanding at an equal rate on the individual level, as is all matter. However, as a growing populus, we are expanding at a significantly larger rate than our environment. The most important thing is this: we have not even seen close to 50% of the worlds countries enter or finish an industrial revolution. What do you really think is going to happen when the entire world consumes 1/3 of what we do? Limitations need to be put on supply as well as demand. Its a fact of biological existence… the growth of every population is restricted. We, the universe and matter are finite.

  45. Skeptic Says:


    The free market works precisely *because* it is a place where people care for themselves. It is motivated by greed and self-interest… which is why it works.

    For example, there is a strong incentive *for the producers* to make goods that will find a market–therefore making things that *others* want to buy. This also benefits the customers, of course.

    Also, there is a strong incentive for the producers to make sure the workers are prosperous enough to buy their products; this is why capitalism tends to raise the standard of living of everybody.

    Marx, incidentally, realized this: as he notes, the more a worker has, the better for the producers–as long as he spends the money on goods the producers make and does not accumulate capital.

    This, one may note, is precisely what happened: yes, the average worker in the USA is no competition at all for the producer in terms of resources… but he *does* have a lot more income, he uses to buy a lot more stuff, than the “freed” and “un-exploited” workers in the communist world.

    This is the two-minute version–this doesn’t mean that the free market cannot be improved, mind you. My point, however, is that the anti-capitalists are barking up the wrong tree: they are against capitalism’s exploitation, greed, and self-centeredness–when it is *precisely* because of these properties that capitalism works as well as it does.

    Capitalism, as it were, is a way to sublimate human nature and turn it into the benefit of everybody: it is the way to turn the producer’s greed into affordable products for the consumer, without the use of force.

    Quite apart from the issue of human rights and freedom–that it is wrong to shoot people for the “crime” of being factory owners–all other ways to fight greed and self-enterdeness failed. They lead to the gulags and the dictatorships, since the age-old problem–Juvenal’s question, “who will police the police?” raises its ugly head.

    Once you have someone in charge to make sure nobody exploits the workers, by letting him shoot and jail and expel the “greedy capitalists”, he has so much power he is all but certain to use *his* position to exploit the workers–and everybody else–for *his* (& his cronies’) personal benefit, in a way that’s *much* worse than the capitalists ever did. This, of course, is what happened in all communist countries.

    If your working conditions suck, you may improve them by striking in order to force the factory owner to raise your wages. But nobody dares to strike to protest the policy of Stalin, the great liberator of the people, the sun of the nations; if you do, you end up dead.

  46. Skeptic Says:

    Let me also add that for all the talk about capitalism “Destroying the enviornment”, it is communist countries that always were by far the worst polluters. The USSR’s destructions of Russia’s enviornment was downright horrific. Only in the west is enviormentalism an important force; in the communist world, anybody who voiced such concerns was deemed an “enemy of progress” and sent to the gulags.

  47. Balak Says:

    Promoting faith in capitalism requires, among other things on keeping people uneducated, fearful and credulous… but While we’re on the topic of the ENVIORMENT, let’s not forget the NUCULAR weapons…
    (Here at college ;-) they teach both history AND spelling).

  48. Skeptic Says:

    Why, exactly, are college professors, students, and the other 17 communists in the world who are neither so hot on the “capitalism exploits the enviormnment” thingy?

    Well, because they have to answer the age-old question: if communism is so great, why is life in the capitalist countries so much better?

    The original answer is that capitalism “exploits the workers”. Well, it turned out that the workers in the capitalist world live much better than those in the communist world.

    So the answer was changed: it was the capitalism is “imperialistic”, constantly taking over new countries to exploit them, and therefore can afford such a high standard of living. Wrong again: the USSR was by far more imperialistic than any capitalist country,

    So the answer was changed again: it isn’t *real* imperialism, it’s “economic and cultural imperialism” that makes the population in third-world countries pro-capitaliss, so that the western capitalists can exploit them, an therefore afford a higher standard of living. Oopes, wrong again: the more western capitalist countries invest in a country, the higher its standard of living. Just consider, say, Libya or Laos as compared with Taiwan or South Korea.

    So now it must be the “enviornment” that the capitalist unfairly exploit. Well, wrong again (do you see the pattern?): the communist world was by far a worse polluter and waster of resources than the west ever was.

    All of these “explanations” for capitalism’s success and communism’s failure are really “We didn’t lose, they cheated!” whines. They ignore the much simpler answer: to wit, that communism doesn’t work, and capitalism (for all its faults) does.

    I wonder, though, what will happen once the “enviornment” excuse for capitalism’s “unfair” success and communism’s failure is shown to be as empty as all previous ones. What will communists do then? Claim NASA “proves” capitalism is “exploiting outer space”?

  49. MJ Says:

    I notice you didn’t mention much about peoples ignorance about fiat currency versus having a free competing currencies backed by gold silver or something of agreed value.

  50. Skeptic Says:

    That might have to do with the fact that the “fiat currency” cosnpiracy theorists are ignorant fools who have no earthly idea about basic economics. Nobody who matters agrees with them, for several very good reasons.

  51. ML Says:

    It’s not as simple as “Capitalism is bad implies communism is good.” That’s the same argument as “Evolution is flawed, so God created the world in 7 days.”
    Clearly, interventions from “the people” have improved conditions for workers and humanity in general. Just after the industrial revolution, human rights abuses were commonplace. Nowadays, we have safe-guards against the potential for abuse in a system whose economy is still driven by the bottom line (that’s inherent to capitalism). Our system of government is not necessarily based entirely on profits, however, so there is an interplay between market regulation (to safeguard the worker / level the playing field) and market freedom (to ensure a real competitive environment exists).
    Hmm… Paul already said what I just said. Uhh… what’s that over there?! *runs*

  52. Mathew Cherian Says:

    Eternal vigenlence is the price for Liberty, I believe this what it is all about, people vigenlent even when ejoying all the fruits of free market. I think the Greek philosopher who stated the above precived well when he saw the Greek society pursuing freedom, justice and luxury to be the triads that should shape societies.

    I believe it is not exactly disappointment but vigelence in play.

  53. RHM Says:


    You continue to turn out great material and give common-sense explanations that are easy to understand. Keep up the good work.

  54. Rene Says:

    While I see your points to some extent, I’m not convince that completely free markets are unilaterally beneficial — or whether or not that was your point.

    I find that your argument places way too much importance on the acquiring of wealth as a measure of progress, in which capitalism excels. The ideas of Marx & Engel would never have caught on if capitalism and free markets were such a perfect and trustworthy system that provided all the answers.

    Free markets do work, but they work best when they are balanced with social mechanism that protect individuals from the excesses and abuses by the influential over the masses. By itself free markets don’t do that, which is why I see the role of governments, the media and academia in many ways as evolving into some sort of counterweight. The simple fact that these mechanism exist in most free societies is proof enough that they are necessary to some extent. Too much of either and you have tyranny.

    If money was all that mattered, I would agree fully. But too many things can’t be measured by GDP.

  55. Al Says:

    “(You’re a college student, aren’t you, Balak? Just an educated guess. At that age, everybody’s either a communist or an Ayn Rand fan… you’ll grow out of it.)”

    Now let’s not get at university students. I’m a university student, and I think that i) communism is a ridiculous economic system that goes against human nature and ii) that Ayn Rand was a nasty, selfish bitch. And an ugly one, at that.
    Laissez-faire capitalism does not appear to be sufficient to produce a society of happy individuals with good prospects. Check out how the Northern Marianas are faring; there is no labour regulation, and there are also the corresponding cases of abuses of that. (The lack of labour regulation is practically imposed on the islands by the US, which is the de facto colonial power there.)
    I also find it annoying that there has to be this polarisation; clearly, someone who is not a laissez faire capitalist is not instantly a communist, and vice versa. Reason, gentlemen, have we forgotten it? If one point of view is wrong, and the adherent of it is a rational person, then ad homming them is hardly going to do anything, is it?

  56. Caleb Says:

    Capitalism in its purest form is inherently flawed. Socialism in its purest form is inherently flawed. I’m a firm believer that we as a society should strive to find the best in each ideology and disregard the rest. The best economy is a mixed economy. For evidence of this, one only has to look to the the sucessful social democratic policies employed in the UK, Germany, Sweden, Norway, etc.

  57. Skeptic Says:

    >>>>>>I also find it annoying that there has to be this polarisation; clearly, someone who is not a laissez faire capitalist is not instantly a communist, and vice versa.

    Absolutely correct, Al, but note that I explicitly did *not* claim that. My criticism is aimed specifically at the would-be communists of Barak’s stripe, not at all those who claim the free market needs some adjustments, as you can see from my posts.

  58. Balak Says:

    The ‘free market’ does not need ‘adjustments’. The capitalist state and the system it protects need to find their place – as soon as possible – into the toxic-wastebin of history.

    Unfortunately, thanks to the betrayal of the proletarian cause by stalinism and social-democracy, the system of private ownership in the means of production has been able to rise, beshitted and stinking, from its deathbed to threaten our species anew with World War, environmental melt-down and social barbarism.

    As Shermer’s brainless happy-talk demonstrates, capitalist ideology itself is blinded to the consequences of its actions by the irrational drive for ever greater accumulation. Our species is travelling at high speed toward the abyss with no one at the steering wheel… And the ‘invisible hand’ nitwits happily insist that this is a *good* thing… any effort at conscious direction of the economy, they argue (its subordination to the needs of the human species) would interfere with their ‘divine law’! The ultimate historical fusion of god, mamon and feces is complete!

    Its no accident that, in its advanced senile dementia, U.S. imperialism has turned its back on science to embrace religion.

  59. Skeptic Says:

    Incidentally, folks, I’ll betcha a fiver Balak, the proud protector of “the workers” from the “greedy capitalists”, had never worked a day, or earned a dollar, in his life.

    I know, I know–nobody’s going to take me on it, it’s a sucker’s bet…

  60. Rick Says:

    I agree with a lot of Dr. Shermer’s writings even though he does write from an evolutionary presupposition. I think he is still trying to convince himself that this theory is really fact.

  61. Rick Says:


    I do agree that capitalism is the best!

  62. Skeptic Says:

    >>>>>I agree with a lot of Dr. Shermer’s writings even though he does write from an evolutionary presupposition. I think he is still trying to convince himself that this theory is really fact.

    That’s not half of it. He also writes from the gravitational presupposition and from the electrical presupposition. I guess he is still trying to convince himself gravity and electricity are a fact.

    I mean, they’re CALLED the “THEORY of gravity” and the “THEORY of electricity”, aren’t they? How silly of Shermer to still pretend they’re facts. And he calls himself a skeptic. Tsk tsk.

  63. Skeptic Says:

    >>>>>>The ‘free market’ does not need ‘adjustments’. The capitalist state and the system it protects need to find their place – as soon as possible – into the toxic-wastebin of history.

    But if that happens, Balak, where will dad get money to pay your tuition?

  64. Rick Says:

    >>>>>I agree with a lot of Dr. Shermer’s writings even though he does write from an evolutionary presupposition. I think he is still trying to convince himself that this theory is really fact.

    That’s not half of it. He also writes from the gravitational presupposition and from the electrical presupposition. I guess he is still trying to convince himself gravity and electricity are a fact.

    I mean, they’re CALLED the “THEORY of gravity” and the “THEORY of electricity”, aren’t they? How silly of Shermer to still pretend they’re facts. And he calls himself a skeptic. Tsk tsk.

    Wow! They really got the cream of the crop skeptics to reply to posters on this blog didn’t they! Just kidding!

    Septic, you completely missed the point, but I figured as much.

    Hey, have you heard about the new Ben Stein movie coming out? It’s called “Expelled”. Here is a link and a trailer.

  65. Skeptic Says:

    Oh, I’ve heard of the Ben Stein movie all right. It’s (yawn) the usual creationist propaganda–claiming there’s “viewpoint discrimination” against creationism (or “intelligent design” as it’s now called) in academia.

    Well, no kidding. Maybe this “viewpoint discrimnation” has something to do with the fact that 100% of the evidence supports evolution and none whatever supports creationism. In fact, the whole POINT of science it to practice “viewpoint discrimination”–to disriminate in favor of the viewpoints that, you know, has evidence in their favor.

    Isn’t that SOMETHING? Science’s been doing that for, oh, at least 400 years now. Maybe Mr. Stein didn’t get the memo.

    Anyway, why stop with biology, if “viewpoint discrimination” is such a terrible sin? I suggest forcing geology departments to hire flat-earthers, history departments to hire holocaust deniers, and math departments to hire circle-squarers. After all, we wouldn’t want to discriminate against such views, just because–like creationism–they’re silly pseudoscientific nonsense without a shred of evidence in their favor, would we?

    For that matter, if stopping “viewpoint discrimination” is so important, why not let in Flying Spaghetti Monsterism? I suggest every biology department should have at least one evolutionist, one creationist, and one Flying Spagetti Monster theorist. You know, in the interest of balance, stimulating academic discussion, and avoiding viewpoint discrimination.

    After all, the FSM theory has exactly as much evidence for it as creationism does–namely, none–and when it comes to shouting “evolution didn’t yet explain [whatever], THEREFORE GOD (*cough* “an intelligent designer” *cough*) DID IT!!!”–which is all creationism does–one might as well say “FSM did it!”, instead.

    There certainly any evidence to favor Intelligent Design Creationism over Flying Spaghetti Monsterism–and even if there *were*, we wouldn’t something as silly as evidence to make us prefer one viewpoint over another, would we? That’s “viewpoint discrimination”, which is a no-no, because Ben Stein says so.

  66. Rick Says:


    I never said anything about creation or evolution. I think the intelligent design argument is just plain stupid! I just wanted to inform the bloggers of the movie. They can watch it and make up their own minds. Have you already seen the movie?

    Skeptic, you need to take it easy, okay?

  67. Rick Says:

    Now, I wonder what Dr. Shermer’s thoughts are on universal health care. As a civil libertarian, he’s probably against it.

  68. Skeptic Says:

    Oh really, Rick?

    You “just want to inform” people of this pro-creation, anti-evolution movie, and you just “innocently” criticize Shermer for treating evolution as a fact instead of “just a theory”?

    Sure. And I’m Mary of Romania.

  69. Rick Says:


    Take it easy! The only point that I made in my previous post was that Dr. Shermer has a naturalistic worldview. He has admitted this much. I didn’t post that link in order to pull any of the faithful away from the flock, I just wanted to inform the bloggers of the movie since it probably would be interesting to them.

    If it makes you feel any better, I’m not opposed to the theory of evolution. I’m not quite sold on it though, I don’t think the evidence is a great as so many claim that it is. I enjoy science and the conquest for knowledge and truth. I am a thiest by faith, but I do not try to use the Bible as a science book. I think that the six literal day creation, six long periods, and intelligent design views are seriously lacking and really distort the intended meaning of the scripture. I’m more in favor of the Frame Work view taught by Meredith Kline and modified by Lee Irons, which leaves the queston of how God did it to science and mystery. So, I don’t have a dog in this fight. But Scientist have biases and act on faith just like everyone else, so this has to be brought out. There are also verious incentives and interests for scientists to hold to certain views and shy away from other theories. When ever a view becomes a dogma, then we have a problem. Enough rambling by me.


  70. Balak Says:

    Free market ideology is socially irrational, because it posits a mass of individual economic decisions based on the prinicple of internalizing (privatizing) profit while externalizing (socializing) cost. Each individually ‘rational’ decision taken on this basis has the cumultave effect of bringing on irrational and destructive consequences, eventually resulting in massive social breakdown. Historically the capitalist state has intervened at such moments to (temporarily) “save the system from itself” with (improvised) economic interventions of one kind or another, or destructive wars.

    The anti-human ‘free market’ system has got to go!

  71. Skeptic Says:

    >>>>>>>>The anti-human ‘free market’ system has got to go!

    …or else WHAT? You’ll hold your breath and turn blue? You’ll refuse to take dad’s tuition money?

    If you don’t like the free-market system, nobody’s forcing you to stay in the USA. You can emigrate to North Korea, Cuba, Vietnam, etc., and live in a Socialist-Marxist paradise.

    Don’t let the door hit your behind on the way out.

  72. Balak Says:

    ‘Skeptic’ might well rename himself ‘True Believer’. If his faith in capitalism is so easily shaken, one must assume that it’s about as childlike as his responses on this thread.

  73. Jan Says:

    Dear Balak:

    Skeptic’s question, or else what, is a valid one.

    You said in an earlier comment that humanity would be better off governed by democratic institutions with their feet firmly on the neck of the free market. Fair enough.

    So markets don’t decide resource distribution any longer. Fair enough. How, exactly, should a democracy decide it?

    Let us undertake a thought experiment. Pretend that democratic, internationalist socialism has overthrown public and private kleptocracies the world over. No more corporations, and the people, we presume, elect the planners every so often.

    So what about cell phones?

    They require rare metals that have to be mined, at terrible environmental cost. No one actually needs one, unless perhaps they’re an emergency responder. The public square would become much more civil and aesthetically pleasing. So get rid of them, except for authorized personnel with a compelling need.

    Suppose people don’t want to get rid of them?

    A couple of months ago the NYT ran a story about devices that let you block cell phone transmissions around your person. I have seldom seen more venom in their letters column than that expressed by a mother who insisted that she needed to keep in touch with her precious offspring.

    So parents have a compelling need. Make an exception for parents.

    Suppose single people resent that. Suppose a voting bloc emerges and elects a new bunch of global planners who pledge to continue cranking out portable phones.

    So much for progress by planning.

    If cell phones are going to be that impossible, how are you going to plan little things like, say, the job market? Or food availability? Or the distribution of medical resources?

    Markets are blind, but do socialists really have enough sight to replace them

  74. Balak Says:

    Jan, I think your questions are much too narrowly cast.

    It’s not a matter of whether ‘socialists have enough sight to replace blind markets’ but whether the human species will have the consciousness to ensure its collective survival through the rational organization of its economic affairs before we are destroyed by the very powerful material forces we have unleashed over the last couple of centuries (The looming environmental catastrophe being only one example).

    This means overcoming a social and ideological inheritance of blind irrationality, theft and aggression from the long epoch of private property (slaveholding, feudal, bourgeois etc.) on which present-day capitalism (imperialism) is built, and which the capitalists have a direct material interest in maintaining.

    As to cell phones, this is sort of silly. It doesn’t take socialism to regulate such questions when they begin to pose genuine problems (look at the capitalist state’s bans on smoking, imposed with barely even a nod in the direction of ‘individual rights’).

  75. Skeptic Says:

    >>>>>>So what about cell phones?

    I asked the local college’s “Marxist cell” a similar question (only I used golf clubs–just to piss them off more, golf being, you know, a game bankers and capitalists play.) Apparently, it seems, there’s going to be some committee somewhere who will determine (a) if golf clubs are in fact necessary for humanity, and (b) if so, exactly how and when they’re going to be made, with a standard-issue golf club for all, so as to not arouse class envy.

    That sort of thing goes a long way towards explaining why it was so hard to get decent shoes, cars, lightbulbs, or anything else in Moscow (or anywhere else in the communist world). The committee didn’t consider them important enough for the good of humanity, or the advancement of socialism, or whatever. And who are YOU, with your EVIL CAPITALISTIC and GREEDY desires for material goods, to tell the wonderful, wonderful commisars on the committee what humanity REALLY needs?

    So, to answer your question, in the wonderful socialist world, MAYBE there will be a standard-issue cell phone you MIGHT get after ten years of waiting, if they decide to make any at all. (And if it stops working, as soviet-made goods usually did, within a week, then there’s a two-year waiting list for reapairing it.) The other possiblity is to smuggle such a phone from the west, at the price of about twice the average yearly income in the socialist paradise. The latter may prove harder to do if, as Barak claims to want, the evil capitalist west will be destroyed.

    Of course, Balak is all talk. He loves his electronic gadgets (like his computer), his comfortable life in the capitalist world, and his capitalist-produced cell phone, car, television, grocery shopping, and all the rest. He is just as much as a capitalist as you or I are. He just thinks that if he *says* he favors socialism and hates capitalism, then that somehow makes him more “enlightened” or “superior” to us benighted masses.

    It’s just a pose. It’ll pass once he graduates from college.

  76. Skeptic Says:

    What really pisses me off about Balak’s answers is that he, personally, is middle-class, educated, has all the comfort capitalism brings, and so on. His argument against the free market isn’t really, “I am willing to be poor to save humanity”, but rather, “I want OTHER PEOPLE to be poor to save humanity”.

    It’s the same sort of annoyance which I feel whenever I argue with the mideavalists who claim “the good old days” were the best. They always imagine themselves as lords, kinghts, gentlemen farmers, philosophers, painters, architects, poets, whatever–but NEVER as the illetrate peasants, serfs, and slaves which were 95%+ of the population in the “good old days”.

    Same here. Barak imagines himself, in this brave new socialist world, as one of its thinkers, guiders, philosophers, shapers, planners, or whatever. He will have his own private dacha, given to him by a grateful world for saving it from the clutches of the free market… it’s going to be all those OTHER people, 99% of the population, who would be standing in line for hours day for low-grade hamburger meat or waiting two months for a plumber.

  77. Miguel Munoz Says:

    Dr. Shermer, I always look forward to your column in Sci-Am, but I think the media-bias study you cite could be subject to a bit of healthy skeptical scrutiny. The standard against which the media is measured is Congress? Are they kidding us? There are many studies about media bias, which produce many different results, so a single questionable study doesn’t do much to prove your point. Check out Fairness and Accuracy in Reporting for some alternative studies with (IMHO) better methodology.

    But you seem to be saying that people are irrationally skeptical of free markets because they are misled by the liberal establishment. You might want to apply the traditional economist assumption that people are rational. This isn’t always true, but there are far too many rational reasons for skepticism that deserve to be discussed. For some excellent examples, check out the book “World on Fire,” by Amy Chua. She’s a Yale law professor and a firm believer in free markets, who finds examples all over the world of popular backlashes against free markets and democracy. The reasons are always based on powerful political and economic forces, rather than undue influence by any “liberal establishment.”

  78. Balak Says:

    I would put it more simply:
    poor and oppressed people most often rebel against ‘free markets’ because ‘free markets’ most often screw them over (while increasing the wealth and power of the rich). What’s irrational about that?

  79. Skeptic Says:

    Well, for starters, what’s irrational about that is that the screwed-over poor in the free-market west live far better than the average citizen lives, or lived, in any non-free market system.

    The result of destroying the free market system is not to stop poverty, but to greatly increase it, by making everybody as poor, in fact much poorer, than the poor are in the capitalist west.Sounds irrational to me.

    Of course, this doesn’t really the poor are irrational–in the capitalist world, the poor are usually, if anything, more economically conservative and pro-free-market than most other classes.

    It’s frustrated middle-class college kids who are the “revolutionaries”, usually when they discover the world doesn’t really care how wonderful they consider themselves to be. How can the world be so unfair? “The system” must be rotten! Let’s have a revolution and save the poor from the evil injustice of the capitalists!

    What, the poor don’t seem to want to be saved? Well, screw ’em–who are *they* to tell *us* enlightened people what they want! Once the revolution comes, we’ll send them to reeducation camps until they REALIZE how much it was all for their own good.

  80. Miguel Munoz Says:

    Skeptic, I wasn’t talking about destroying the free market system. It may well be the best possible system, but that doesn’t mean it’s a flawless system. Left entirely unregulated, it has created havoc in many people’s lives, which is why we have the Fed to keep things under control. Just as the lame zebra caught under the lion’s claw isn’t likely to trumpet the virtues of natural selection, so the aging couple driven to bankruptcy by their medical bills can be forgiven for their mistrust of a free but inflexible market system. I’m not calling for us to abandon free markets, I’m just pointing out that those of us who defend market systems still need to show respect for the entirely rational mistrust of the system.
    (Again, let me recommend Amy Chua’s book “World on Fire” for some excellent illustrations of my point.)

  81. Skeptic Says:

    I know, Miguel–my reply was to Balak’s “destroy the evil system” nonsense, not to your post. Your criticism of the imperfections of the free market system is one thing; Balak’s “I will fight against the evil capitalistic system until dad stops sending me money”, something else entirely.

  82. Jonathan Brown Says:

    As a student pursuing a career in sociology, people like Michael Shermer are very confusing to me; they support science when it comes to creationism and faith healers, but they never learn to apply that skeptical thinking to the social world.

    When debating about creationism, Shermer defends the principal that the science that makes it into the peer-reviewed journals is the science that should be taught in school. Even a casual glance at the social science literature would demonstrate that laisse-faire economics have been almost universally rejected by social scientists. And Shermer criticizes professors for being too liberal? Would Shermer also criticize biologists for being too evolutionist? I doubt it. So why would Shermer distrust anthropologists who reject false views of how our society operates but accept the claims of Biologists regarding evolution?

    We should all be skeptical of “free” markets because they do not exist. One of the principal findings of sociology is that markets are ALWAYS socially constructed, they are never “free”. Markets cannot exist without laws banning theft and homicide, contract enforcement, police and military defense, legal rights, copyright laws, etc.

    With this in mind, Shermer’s comment that anti-capitalists are motivated by envy and anger towards the rich makes no sense. The extreme inequality in wealth distribution is not the product of merit — it is actually the most artifical thing on earth, as wealth is literally distributed upwards from the poor to the rich.

    Finally, Shermer argues that if capitalism was really so bad, it would have imploded years ago. But this is exactly what happened! The history of unregulated capitalism is filled with unspeakable horror: vast inequality, robber barons, child labor, sweatshops, senior citizens starving to death, company towns, filth in our food, deadly “medicine”, and union busting thugs. Depressions were also common with unregulated capitalism. The ONLY reason capitalism still exists today because of government intervention that places checks and balances on the market, preventing its most extreme abuses from occuring as frequently as they had in the past.

    One can look at some basic statistics — America has the most unregulated market in the industrial world, and it also has the most poverty, inequality, crime, pollution, worst health-care system (with the highest ameneable mortality rate), and low life expectencies.

  83. Jonathan Brown Says:

    “What, the poor don’t seem to want to be saved? Well, screw ‘em–who are *they* to tell *us* enlightened people what they want! Once the revolution comes, we’ll send them to reeducation camps until they REALIZE how much it was all for their own good.”

    Quit making things up and creating straw-men to attack things you don’t understand. When and where has anyone in America actually advocated this viewpoint?

    I think the entire premise is flawed. Polls, and common sense, show that most poor people do not want to be trapped in dire poverty, and do not need to be sent to concentration camps to understand that being paid starvation wages is NOT a fair deal.

  84. Skeptic Says:

    >>>>>>With this in mind [the inequality in income], Shermer’s comment that anti-capitalists are motivated by envy and anger towards the rich makes no sense.

    To understand the envy of the anti-capitalists, and decide whether it makes sense or not, you should first realize who they actually are.

    The anti-capitalists aren’t, for the most part,the poor. Sure, they would like to *be* rich, sure, but for the most part do not consider the rich, let alone capitalism in general, to have unfairly exploited them.

    The anti-capitalists are usually dissatisfied intellectuals–people who discover that their academic training does not get them what they consider to be their “just reward” or “true worth” in the free market system–that are envious of the rich.

    It is this envy–essentially envy of social status, not envy of money per se–that usually motivates anti-capitalists in the USA. It is envy based, not on the belief that in a just world they would have more money, but on the the belief that, in a just world, they would be the world’s leaders instead of those awful rich people.

    The real cause of anti-capitalism, at least my experience shows, is almost invariably not poverty, but frustrated self-importance–the kind confined (in its more virulent forms, at least) to teenagers and professional intellectuals. The poor, in general, have better sense.

    >>>>>>>>>>>>The extreme inequality in wealth distribution is not the product of merit

    Who on earth ever said it was? If you’re a successful capitalist, it shows you’re good at one thing: you can make stuff that people want to buy. But Shermer’s point is quite different–to wit, that it is this system, with its self-centerdness, that actually works: the “exploited poor” live in the capitalist world far better than the poor live anywhere else, precisely *because* people, the rich included, are free to follow their self-interest.

    All other economic systems are based on the idea that people’s self-interest should be drastically curtailed in order to stop economic exploitation. The result, in practice, is that only those who are in charge of curtailing the self-interest of others–usually the ruling junta–have any ability to follow their own self-interest. So the result, naturally, is that *everybody* except a tiny minority are poor.

    >>>>>>>it is actually the most artifical thing on earth,

    Well, duh.

    >>>>>as wealth is literally distributed upwards from the poor to the rich.

    Yes–people get richer than other people by selling them stuff they want for money. But if that was all there was to it, how come the poor in the capitalist world live so much better than the poor–and for that matter, than the middle class (if it exists)–anywhere else?

    See above for the answer.

    >>>>>>Quit making things up and creating straw-men to attack things you don’t understand. When and where has anyone in America actually advocated this viewpoint?

    Well, only the other day, a certain Mr. Obama was caught on tape showing utter incredulity that–imagine that–some people sort of prefer to keep their irrelevant, outdated freedoms (like those guaranteed by the second amendment, for instance) to voting according to their economic interest.

    He seems not to have noticed that those ignorant hicks realize that the government offering to swap those “irrelevant” freedoms for better pay usually means it will take both, as the history of dictators who were put in power by popular demand during an economic crisis show.

    This is not exactly sending people to camps, of course, and I certainly don’t think Obama even imagines such a possiblity, but the totalitarian temptation–“my benevolent government would make sure the economy will be more fair, if only you annoy peasants would stop bitching about losing some irrelevant 200-year-old freedoms”–is certainly there.

  85. Jonathan Brown Says:


    1) You state that opposition to inequality is motivated by “envy” and that poor people are not opposed to this system. What proof do you have of this? Can you pull me an example out of a peer-reviewed psychology journal, showing that progressives are motivated by envy of the rich?

    2) You state that the poor in capitalist countries are better off than the poor who live anywhere else. This is a huge non-sequiter, and is false on many levels.

    First, both relative and absolute poverty are associated with decrease in quality of life. That means that countries that have high levels of inequality (such as the US) but not much absolute poverty still experience higher levels of social problems and higher mortality rates. See this study for an example:

    Secondly, economies that are the most unregulated have the most poverty. The United States spends the least on social programs but has more poverty than almost any other industrialized country. This fact disproves your argument in one fell swoop.

    3) Your ignorance of basic sociology is betrayed by the fact that you believe “upward re-distribution of wealth” occurs when poor people buy products from rich people. This is nonsense.

    Upward redistribution of wealth is actually something that is built into capitalism at the level of GOVERNMENT, not consumer. The capitalist economy that is upheld and maintained by the government is constructed to create extreme inequalities of power and wealth. This occurs by socializing the negative costs of doing business onto the taxpayer and the public, and privatizing the profits (also known as a negative externality). Other forms of upward redistribution include starvation wages, price gouging, corporate welfare, and CEO pay raises.

    If you can follow my logic, it is this:

    a) capitalism is created and maintained by ALL OF US through the government

    b) the system of capitalism (which we all pay to create) creates extreme inequalities of power and wealth

    therefore, the wealth, tax-dollar, and labor-value is being taken from the common man and used to make profit for the obscenely rich, furthering their power and restricting the freedom of the rest of us.

    5) Your statement about the “totalitarian temptation” shows that you truly have no understanding of what progressives actually believe. When you use language like “ruling junta”, all you are doing is adopting the language of the ruling class and transfering their notion of top-down heirarchy to progressives. This argument will always fail because progressives are non-heirarchical — we reject inequality and stratification and support a system of government where power derives from the bottom-up from the people.

    Your thinking is rooted in heirarchical, 18th century notions of social organization, thus you lack the quality of mind necessary to understand a system that is NON-HEIRARCHICAL and democratic.

    If you want to continue this exchange, you can keep on doing so here or email me at if you would like.

    All the best,


  86. Skeptic Says:

    >>>>>>>>1) You state that opposition to inequality is motivated by “envy” and that poor people are not opposed to this system. What proof do you have of this? Can you pull me an example out of a peer-reviewed psychology journal, showing that progressives are motivated by envy of the rich?

    I can do better than that: I can give you world history. In virtually all countries which experienced anti-capitalistic revolutions–which inevitably results in dictatorships, of course (as revolutions in general usually do)–the supporters of the revolution, the progressives, are mostly (1) upper-middle-class, and (2) actually despise the workers they claim they wish to help.

    To prove (1), note that most progressives in the USA are upper-middle-class. Che Guevara was a medical student; Marx was a newspaper editor; most Russian anarchists belong to the (lower) aristocracy / professional class (where they knew enough of the higher class’ life to desire it, but also that they were unlikely to achieve it.) Virginia Woolf, the would-be “revolutionary” (“Three Guineas”) was of course a member of a well-known literary family. These examples are wholly typical. And, of course, there’s nothing more common than the college “progressive”–who rants about how the workers are opressed by the capitalists, but himself is a member of a middle class family who never worked a day or earned a dollar in his life. Actual workers are a (relative, at least) rarity in “progressive” circles.

    To prove (2), consider that Marx opposed adding members of the actual peasantry or working class to the staff of the newspaper he edited–the peasants are not “educated” enough yet to realize what they “really” want, you see. Similarly, the “progressives” in the USA usually despise the working class of their own country, for all their talk about the “workers of the world”. There’s nothing more common than an American “progressive” loving the “workers”, but hating the “inbred redneck conservative fundamentalists”. Both groups are more of an abstraction than a reality, naturally, but–inasmuch as they exist–they’re both caricatures of the *same* class, the American working class. Obviously, these “progressives” care little for the workers as they actually exist. They only “care” for those workers who agree with them, and who would accept them as their leaders.

    Why are (1) and (2) the case? If helping the workers against the unjust system were the real reason, you’d expect the exact opposite–you’d expect most progressives to come from the poor or working class (instead of the middle class and higher), and in any case to actually respect working class people (instead of despising them).

    The simplest explanation for this contradiction is that the real reason for being a progressive is not to help the workers–if you did, you’d act differently (for example, you’d care about what the workers actually want)–but to “educate” and “lead” the workers while making a “more just” society–which, in effect, means a society where you have a higher social status than you currently do.

    In other words, the real reason is envy of those who have more power and wishing for a society when you would have it, instead. Progressives are *positive* that, once the revolution comes, *they* would use their new-found power a LOT better than the evil rich people do–they would promote peace and justice and education and… (etc., etc.). All experience and all history point to the exact opposite–if anything, once the revolution comes, the progressives in power tend to either lose power quickly to a ruthless dictator or become ruthless dictators themselves–but that doesn’t matter to the “progressives”, since what they really want is to get the power; they’re very forgiving of its horrible abuse, as long as it is done by *people like them*: it took them 70 years, for example, to wake up to the reality of life in the Communist world.

  87. Balak Says:

    Why the Poor Love Free Markets:

    “On the roof of the former prison, enterprising women prepare something that looks like biscuits and is even called by that name. The key ingredient, yellow clay, is trucked in from the nearby mountains. The clay is combined with salt and vegetable fat to make dough, which is then dried in the sun.

    For many Haitians, the mud biscuits are their only food. They taste of fat, suck the moisture out of the mouth and leave behind an aftertaste of dirt. They often cause diarrhea, but they help to numb the pangs of hunger. “I’m hoping one day I’ll have enough food to eat, so I can stop eating these,” Marie Noël, who survives with her seven children on the dirt cakes, told the Associated Press.”


  88. Jonathan Brown Says:


    Your (non)response did not adress any of my points and is filled with blatant falsehoods and anecdotal evidence. You argue like someone who has never actually even read the positions of the people you disagree with.

    First of all, you ignored all of my points.

    Secondly, you dishonestly conflate 21st century “progressives” with 19th century Marxism or 20th century violent revolutions. This is dishonest and I won’t even dignify it with a response.

    You state that poor people do not support progressive causes. You provided no evidence to back-up this assertion. Why not look at public opinion polls, voting records, surveys, etc.? Instead all you offer are anecdotes.

    Apparently you have never been educated about how social science works, how to use logic, or how to construct a basic argument. I don’t have time to teach you, especially since you don’t even bother to respond to my posts.

  89. A rational atheist defence of capitalism « Says:

    […] also has a good blog post on capitalism and the public bias against it; read it and you’ll get an idea of the direction the book leans: Capitalism may not need apologists and propagandists, but it does need a vigorous scientific and […]

  90. James F. Elliott Says:

    This article is terrible. A huge portion of it is predicated on an axiom, that liberals are opposed to capitalism, with absolutely zero supporting rationale.

  91. Skeptic Says:

    >>>>>>>>>Secondly, you dishonestly conflate 21st century “progressives” with 19th century Marxism or 20th century violent revolutions. This is dishonest and I won’t even dignify it with a response.

    To consider how someone is likely to behave in the future, you need to look how similar people with similar beliefs behaved in the past.

    The 19th century anarchist and the 20th century communists didn’t wake up one morning and say, “we think gulags and terror are a great idea!”. They both were doing it for a high, GOOD cause–for social justice, equality, the end of the plutocratic oppression of the workers by the capitalists (sounds familiar?) and so on.

    That being the case, and human nature being what it is, it is likely that the 21st attempts to end free markets will end in similar ways.

  92. Randy Bessinger Says:

    I think that capitalism is the greatest system for advancing wealth for the greatest number of people, but I don’t think it is “moral” or “immoral”. It just “is” and that is why there needs to be gov’t oversight and a safety net to make sure that those who would normally be excluded from the rewards of capitalism are not overlooked. I am not sure if that makes me left or right??

  93. Landon Says:

    It is true that the free market is the “winner” as far as advancing our society. Though it is only through government oversite and the ability to “tame” the market that everyone is able to participate and benefit from the free market. Though the free market of today is hardly free, and with that I just would like to point to the massive consolidation of wealth in the last couple of decades, and how does that benefit everyone or society. So the really important question and one I believe is left out of this article is, “what have we given up for this ‘advancement’ of our society.”

  94. RE: Why People Don’t Trust Free Markets « Esoteric Dissertations from a One-Track Mind Says:

    […] Shermer — codesmithy @ 7:32 am Michael Shermer wrote a post on his blog called “Why People Don’t Trust Free Markets.” Shermer is the founder of the The Skeptics Society and editor of its magazine Skeptic. […]

  95. Cathy Danielson Says:

    It’s funny. I actually agree with Michael
    Shermer when it comes to just about
    everything, UNTIL he abandons all his
    normal skepticism and need for actual
    proof of assertions when it comes to
    politics or anything connected with
    politics. This is so disappointing to see
    from such a brilliant thinker on other
    subjects. Come on!! I expect more than
    this from someone who exposed the sheer
    silliness of Deepak Chopra and Rupert
    Sheldrake. What IS it about libertarians??
    Why are they all nuts when it comes to
    their pet issues?

  96. Dan L Says:

    As several people have pointed out, free markets don’t truly exist. It’s an asymptotic ideal, like absolute zero or a blackbody radiation spectrum. In the real world, competition is always imperfect and whichever entity has a greater share has more leverage to increase its share even further. This leads to the accumulation of wealth into a smaller group of hands, and I believe this is ultimately inevitable without a government acting to redistribute the wealth. Ultimately, an unregulated market will tend AWAY from competition as the big boys start to acquire each other. The situation gets a little worse — since we elect our leaders, our government is essentially a market, and the same rules are at play. Whoever has the most money can pay for the most advertising which provides the most name-recognition which leads to brand loyalty (I would have put it in scare quotes if the pundits weren’t chattering about the Republican “brand” so much) and ultimately, market saturation. In other words, political power is also for sale. And once the conglomerates have purchased political power, they will obviously push for deregulation, making it easier to amass even more wealth.

    Skeptic, you’re wrong on most counts from a historical perspective. The lower classes were quite involved with anti-capital movements (populism in the nineteenth century and socialist, communist, and anarchist societies in the early twentieth) before WWII, and these movements (if I may include socialist-inspired labor unions as movements) are directly responsible for the labor laws that make the quality of life in the US so high. However, I must concede, most of today’s revolutionaries are white middle-class kids from the ‘burbs. I would propose that this is because the sorts of movements I was just mentioning caused a great deal of government regulation pre-WWII, and that these regulations were fairly successful in preventing the stratification of capital for the middle half of the twentieth century.

    I don’t mean to pan capitalism, however. Its only drawbacks result from our inability to realize the ideal. In the limit, it’s actually quite beautiful; in a sense, it’s the embodiment of the golden rule. To whit: I don’t want to be a subsistence farmer, I want to be a carpenter. Since you want to be a farmer, I will make plows, carts, fences, and barns and exchange my services for the extra food you are able to grow, since my products allows your farming to be more efficient. It’s this (almost altruistic) system of give and take that we can credit for the last century of technological innovation. Capitalism creates incentives for good ideas, which ultimately make the production of goods more efficient and therefore effectively creates wealth from nothing.

    How we reconcile the drawbacks and advantages is the game we’re playing right now, and a winning strategy would make the whole problem pretty boring.

  97. Al Says:

    I’m very sure that people who are arguing against capitalism and/or about limiting it, have not read the book this blog is based on, “The Mind of the Market”. Shermer answers these arguments with observation, not with conjecture. And, he puts forth a very good set of facts regarding why so many of these ideas are counterintuitive to people.

    One of the things that, as far as I was concerned, Shermer proved is that we evolved with a zero sum idea of how economies should work. These ideas continue to pervade our societies leaving people to believe that if one person gets richer, another gets poorer. This problem is so bad, that more Americans want a socialist/communist-leaning government. As evidence of my claim, see this article by Gallup:

    The article shows that 51% of Americans desire, effectively, a hard stop on the limits of the free market and government intervention that makes the markets not-free. They want the government to take from people who have more than they and give it to them. In short, these people are jealous and I believe it is because they perceive wealth and earnings to be a zero sum game.

    The government used this idea to establish the income tax. The slogan was “soak the rich” and promised to tax only the most wealthy income earners at about 1% in 1913. I believe that in today’s dollars, you would have had to earn about $500,000 per year to be taxed at all. Whatever the exact figure, most people don’t earn that much money so it’s easy to vote away the freedoms of those that do (our constitution was supposed to protect the rights of the individual from the tyranny of the masses). However, top-down economic systems always come home to roost. Now it’s the middle class, the same large voting block that opted to create a government institution, the IRS and the income tax, to punish those who they believed had more than they, who bear the lion’s share of the tax burden (and not because their tax rate is higher than those who earn more than they do but rather because of what this form of taxation does to the price of goods). Incidentally, a progressive income tax is point number two on the communist manifesto. BTW, I have no problem with taxation, I just want it to be done in a way that does not usurp our freedoms using imposts and excise taxes applied fairly rather than an income tax.

    The reality is that top-down economic policies lead to reductions in the freedoms of the people who are asking for the intervention and gives the government massive power. But, worst of all, they are asked for and supported by people under an unfortunate false-premise.

    Last year, 124 countries had economic growth of 5% or more. 124 X 5% is 620%. If the accumulation of wealth is a zero sum game, then the rest of the world has to be 620% less rich now due to the growth in these 124 countries. The zero sum idea gets even more absurd when you apply the concept of time to it. If economies are zero sum there must be only so much to go around. So, how do we go from no economy to a multi-trillion dollar economy in a few hundred years? Why would the average wealth per person continue to go up over time? Wouldn’t it make sense that back in 1908 earnings per person would be much higher than they are today if we had a zero sum economy?

    The fact is that there is no zero sum economy so communism and other forms of gross economic control are not necessary and even reduce the freedoms of the citizens. Believe it or not, you can make yourself valuable to the market if you like. If you do that, the market (the people) will see to it that your standard of living goes up. It’s that simple and it’s no one’s problem to figure out but your own. And, it is certainly not the government’s job to do your dirty work for you.

    In any event, I highly encourage that you read the book. Then, if you disagree with the conclusions, at least you’ll be speaking from a position of knowledge and not from conjecture as many posts here have.

  98. Geoff Henley Says:

    Market capitalism requires state action.

    Without government power, we have no effective means of enforcing agreements and recognizing private property rights without parties disastrously resorting to self-help.

    Before the expansion of the federal government during the New Deal, the government among other things coined money, charged tariffs, raised a navy to ensure open trade routes, enforced patent and copyright law, protected contract rights and promulgated laws that fostered the growth of infant industry. The Philadelphia Convention that gave birth to our nation would not have even occurred, but for the then pressing need to regulate interstate commerce.

    Likewise, 19th century lawyers and judges had to create laws that protected corporations and insulated shareholders from personal liablity.

    That said, our entire nation benefits from an economic system that ensures personal liberty and increased living standards.

    Once someone enclosed land, or horded acorns and fish, the free market could not long stand organically within the state of nature. Capitalism is a machine, and one that far exceeds its rivals. We want it to run it well; understandably, that requires regular maintenance.

  99. Sheldon Says:

    As a long time reader of Skeptic mag. and a fan of some of Shermer’s books, I have to say I am deeply dissapointed with what appears to be Shermer’s uncritical defense of free-market capitalism. Not just because I disagree with his conclusions, but also how he arrived at those conclusions, and how completely un-skeptical he is of his conclusions. He quite willfully ignores so much empirical evidence and alternative perspectives. Take the following passage from this blog article below:

    “Capitalism may not need apologists and propagandists, but it does need a vigorous scientific and rational defense as evidenced by the fact that so many people still distrust free markets.”

    Clearly this is not the case. Capitalism has developed the biggest and most sophisticated propagandist industry ever known to human civilization. It has at least two related manifestations, one called the advertisment/marketing industry, the other called the public relations industry. We here in the U.S. are the most propagandized people into the values of free-market capitalism of all history. How can Shermer ignore something so obvious?

    Then he goes on to say that people distrust businessmen and corporations, and free market “solutions”. He seems to willfully ignore that this distrust and skepticism may be based on evidence and rational argument.

    I have made an effort to obtain the book from my local library, so as to read it and give it a fair consideration. And I will continue to obtain is. However, I have no intention of buying what I percieve to be a bunch of poppycock. I would hope that Shermer would have acknowledged critical of capitalism such as Keynesian tinkering reformism, and more critical Marxist perspective.
    Does he? It doesn’t appear so.

  100. Sheldon Says:

    Oops, hit the submit button. That paragraph should have read:

    I have made an effort to obtain the book from my local library, so as to read it and give it a fair consideration. And I will read it eventually. However, I have no intention of buying what I percieve to be a bunch of poppycock. I would hope that Shermer would acknowledged perspective critical of capitalism, from Keynesian tinkering reformism, to more radical Marxist critiques.
    Does he? Everything I have read so far suggests he doesn’t.

  101. Chris R. Says:

    I have noticed that few of the comments have much to do with the title of the piece: “Why People Don’t Trust Free Markets.” Instead, it seems to have diverged into a discussion of the merits and flaws of free-market economics.

    I was reading recently (sorry, I don’t recall the source, possibly Cialdini’s “Influence”), that cognitive science had determined three forms of exchange that seem to be natural to humans: giving without obligation (usually restricted to families or very close friends), reciprocity (exchange of favours: I give you something now, you give me something later) and barter. Note that none of these typify arms-length free-market exchanges. Essentially, capitalism does not come naturally to humans.

    Families essentially operate in a manner akin to communism. Family members are expected to contribute to the degree they are capable (thus older children are expected to do more and harder chores than younger), and receive from the family based on need (e.g., caring for the sick). I think this helps explain why communism has been especially popular in countries that had never experienced a free market system.

    One commentator was absolutely correct in saying that the rule of law (especially property rights) is essential for a functioning free market economy. People will not pool capital and take risks if they cannot expect to enjoy the fruits of those efforts. However, history shows that while you can have a free-market economy without democracy (and vice-versa), it’s not a stable situation. Free-market economies lead to prosperity, and prosperity leads to demands for increasing political freedom. It has happened in Malaysia, South Korea, the Philippines (among others), and will almost certainly happen in China as well.

    By the way, I have noticed a tendency to conflate the two meanings of the word “capitalist”. The first is simply someone who promotes capitalism; the second is the common use of the term to someone who invests capital in an enterprise for a return. The reason that this is important is that capitalism, and thus capitalists in the first sense, promote a free market. But capitalists in the second sense do not necessarily want a free market: they would much prefer to have a monopoly, or at least an oligopoly. Free markets work (at least in theory) because they drive price down to marginaly cost, and thus profits to zero. This tendency encourages innovation and efficiency, and so leads to increased prosperity for all. However, capitalists (and companies), as profit-maximizers, want to keep profits high. This is most easily achieved by limiting competition, which is why we have anti-trust laws. Thus the behaviour of capitalists in the second sense is not necessarily the best indicator of the effects of free markets.

    The main critique of free-market economics, in my mind at least, is that they are based on the assumption of “homo economicus”, the person who always acts to maximize his or her own economic self-interest. While this greatly simplifies analysis, it means that theory and practice necessarily diverge. Until we are able to more fully understand “human nature” and incorporate this understanding into economic models, we shall have to accept (to paraphrase Churchill) that the free market is the worst economic system, except for all the others that have been tried from time to time.

  102. Garry Says:

    “I have noticed that few of the comments have much to do with the title of the piece: “Why People Don’t Trust Free Markets.” Instead, it seems to have diverged into a discussion of the merits and flaws of free-market economics.” – i agree!

  103. Alan McCrindle Says:

    Michael makes a lot of use of the idea of evolution, emergence and complex adaptive systems in his book.

    Emergent complex adaptive systems are governed by negative feedback loops that maintain long term stability (co-operation) and positive feedback loops that drive short term change (competition). Both are necessary and the end result needs to be homeostasis otherwise the system will fail.

    The free market is an example of a short term positive feedback loop. But without negative feedback loops it will naturally lead to inequality, and an over adaptation of the environment and eventual collapse.

    Free markets are a cultural evolute not a biological evolute. They do not come pre-packaged with built in negative feedback loops as do biological complex adaptive systems. They are blind to anything that cannot be objectified and quantified – such as the externalities they exclude. As such they are blind to long term limits and the long term consequences of their behaviour.

    So we humans will need to build in negative feedback loops otherwise the human race will join the list of the other 99.99% of the species that have ever lived on this planet. It is premature to claim the great leap forward either as a great achievement or predicated on the free market alone. It is built on our capacity to harness energy and right now we are living unsustainably as a species on this planet.

    It is not surprising therefore that some people should be afraid of “unregulated” free markets.

    Claire Graves did some very interesting work on the “emergence” of human value systems, cultures and the systems that they are embeded in. This has since been popularised in the book spiral dynamics.

    According to this theory, free markets, democracy, reductive objective science, individualism, competition and multiplicity are part of an express-self meme. The value systems that precede and follow this value system are both co-operative, communal, sacrifice-self memes. So I would expect people located in these value systems to be suspicious of free markets.

    So in my opinion – while free markets are an advance from command and control they are insufficient by themselves because they fail to provide us with the feedback we need for long term stability and survival.

  104. Torkel Says:

    I like Shermer’s other works but am equally puzzled by his highly unskeptic views of free markets as the many other commentators.

    If history has thought us anything about economic systems it is that unregulated capitalist markets has been one of the most destructive forces for human right and liberties.

    Just look at countries like Chile during the seventies, which instituted one of the most free market societies ever and the result of which is often touted as a economic miracle. Another result was a HUGE increase in poverty.

    One thing free market proponents forget is that freedom involves more than your right to vote, there a human right of health care, of eduction, of clean water, of the right to express yourself without fearing a libel lawsuit (you might have used a company logo in your drawing).

    And the idea that mainstream media is “left” or anti-capitalist is ludicrous. Whenever I watch american media (fox, cnn, etc) I get sick, how can you stand such political pro-corporate propaganda?

    Reading Skeptics comments also makes me sick, what reality do you come from? The reason the working people of the west industrialized countries have it better than third world countries (be that capitalist or communist or dictorships) is that we have had (in the past) a strong labor moment, consumer and activist movement that has pushed for labor laws and price regulations to make life livable for average working people.

    Another reason we have it so good in the west is because of constant exploitation of the third world (through colonial wars, slavery, sweatshops, economic strangualtion and enforced privatization, etc).

    What also makes me upset is the reasoning “pure free markets or communism”, like there is no middle ground. Mixed economies like in Sweden who has a strong socialistic movement is rated the best place to live in studies after study (best education, best health, best human rights, wealth).

    The US is one of the most unregulated capitalist economies and is rated very low in UN studies on health, wealth and education (even lower than Cuba in health studies).

    And as many have commented, there is nothing free about markets in today’s capitalist societies. The power multinational corporations hold over democratic socialites is stunning and should make any citizen skeptic about the dangerous of unregulated free markets.

    I could go on and on, please Shermer wake up, be skeptic, there are great rational reasons people don’t trust free markets!

  105. Justin Says:

    It’s depressing that neo-liberals have smuggled themselves into skepticism and appointed themselves the only voice in the movement. And yet, no one notices it despite how obvious it is.

    But what’s more distressing is that anyone who disagrees with or actively opposes free-market capitalism is labeled a “Marxist” or hates liberty. It’s that kind of anti-rational (in the name of reason) POV that makes me strongly distrust followers of Hayek, Rand, and von Mises. Either/or fallacies don’t cease to be fallacies even if they gain popularity. Ironically, it reminds me of a more benign version of Bolshevism: if you belong and/or believe in the party you’re good, if you don’t then you’re bad. It’s the ultimate joke of the last century. In the end, free-market capitalism is as much of a religion as Marxism is: their god is the invisible hand of the market and the belief that it can do no wrong.

    My opinion on capitalism is closest to George Orwell’s (a socialist critic of all forms of oppression–including free market capitalism and Soviet communism):

    “The liberty of the individual is still believed in, almost as in the nineteenth century. But this has nothing to do with economic liberty, the right to exploit others for profit.”

  106. Randy Bessinger Says:

    I just read Thomas Franks book “The Wrecking Crew”. I didn’t see any mention of Saipan in Dr. Shermer’s essay and what went wrong in that experiment in capitalism. From reading Thomas Frank’s book I don’t see much difference between the far right and libertarianism except for the far right’s fascination with policing morality. When it comes to business they favor little to no govenment intervention or regulation other than the market itself.

  107. Scott Says:

    I just read The Mind of the Market with great interest. So trade seems to improve happiness… But the success of trade is highly dependent on the hyper-marketing that leads buyers to believe they need things that they don’t (i.e, become materialistic). Shermer acknowldeges this. He also notes that such materialism does not increase happiness. So how does the “trade improves happiness” theory reconcile this? Also, I didn’t see mention of opportunity costs with regard to trade. The capacity/opportunity for gainful trade is profoundly unbalanced across the globe (and in the U.S.). How has this been treated? To the extent that it has been successfully managed, hundreds of millions of people still live well below every definition of poverty and do not have the opportunity to trade themselves or even benefit meaningfully from trade. I guess one answer is to educate the globe so we can learn to be better capitalists. But how does one do that without funding education in some way at the outset? I suppose Hobbes and Locke have something to say about this question.

  108. Greg Watson Says:

    It has been pointed out earlier: The vast and highly profitable fields of advertising, marketing, and public relations are indeed the apologist and propoganda wings of the so-called free market system. We overlook that at our peril.
    One of the primary roles of commercial/consumer advertising is to manipulate emotion and create a need where a need did not previously exist. That’s an arsey-varsey, not to mention unethical, way to go about providing people with, ahem, free market access to the things they want.
    Advertising, marketing, and public relations tend to celebrate avarice and greed. They foment social disquiet and a sense of unease based upon the quantification of acquisition. The more stuff you have, the better person you are; the happier you will be; the more love you will gain.
    Automobile manufacturers still sell cars with the promise of a a zipless fuch.
    We humans are so very easily manipulated through emotional trickery and trigger pulling. Advertising, marketing, and public relations firms take full and complete advantage of this.
    To downplay or ignore, as Shermer (and Skeptic) seems to do, the power, both in terms of real wealth and political influence, and in terms of the usually mendacious play on emotion, perceived need, and social control and manipulation exerted by advertising, marketing, and public relations firms is to ignore the elephant in the room.
    Furthermore, I would argue that the premise of the argument is fuzzy in the first place. The people in the dirt, the majority at street and grass roots level, the oft-times “victims” of the negative effects of the so-called free market system do not mistrust free markets, or free market solutions. By and large they aren’t even actively thinking of such fuzzy concepts.
    The majority mistrusts the physical and tangible major corporations, the executives therein, and the political policy makers who as a matter of course develop policy that clearly benefits the wealthy and the powerful first and foremost over most of the truly important needs of the people who have less good fortune.
    To hide the real target of mistrust behind the amorphous and intangible fog of concept, the “Free Market,” does a small disservice to truth and argument. It tends to shift the focus from the tangible, as in civilian casualties, to the amorphous, as in collateral damage.
    But then that’s public relations in a nutshell, isn’t it?

  109. Skeptic Says:

    >>>>>>>Clearly this is not the case. Capitalism has developed the biggest and most sophisticated propagandist industry ever known to human civilization.

    Presumably Stalin and Pol Pot were paid by this propaganda industry, since obviously the best advertisement for capitalism is not pro-capitalist “propaganda”, but the 100,000,000+ killed and billions whose lives were ruined by socialism’s attempt to create a brave new world.

    Indeed, socialism failed so miserably, with such horrendeous consequences, that even if capitalism was far worse than it is, it would still be preferable to socialism. I mean, a 100-meter olympic sprinter doesn’t really *need* propaganda to prove to people he is faster than a slug, does he?

    >>>>>>>Last year, 124 countries had economic growth of 5% or more. 124 X 5% is 620%. If the accumulation of wealth is a zero sum game, then the rest of the world has to be 620% less rich now due to the growth in these 124 countries.

    (Scratches head) er… that must be the “NEW MATH” version of doing percentages, I guess… :)

    >>>>>>>Skeptic, you’re wrong on most counts from a historical perspective. The lower classes were quite involved with anti-capital movements (populism in the nineteenth century and socialist, communist, and anarchist societies in the early twentieth) before WWII,

    I’m quite aware of it, but–as you said–it was mostly *BEFORE* WWII. *SINCE* WWII, indeed since the 1920s (after the first world war) those giving the tone to socialism–and supporting mass murderers such as Lenin, Stalin, and Mao–were mostly western intellectuals, who rarely came from the working class.

    >>>>>>>>Another reason we have it so good in the west is because of constant exploitation of the third world (through colonial wars, slavery, sweatshops, economic strangualtion and enforced privatization, etc).

    Nonsense. This is simply the latest Socialist excuse to why Capitalism succeeds and Socialism fails when “everybody knows” it should be the other way around. In reality, the more “economically exploited by evil multinational companies” a country is, the *higher* the standard of living there usually is. See my post above (#48) about this issue.

    >>>>>>>If history has thought us anything about economic systems it is that unregulated capitalist markets has been one of the most destructive forces for human right and liberties.

    Yes, we all heard of those awful dictatorships like England, the USA, 19th-century Europe, etc.–as opposed to those free places like, say, Maoist China.

    (But frankly, Torkel, it seems clear you care more about “feeling sick”–that is, feeling self-flattering outrage which proves, to you, your moral and intellectual superiority–than you care about the facts.)

  110. Skeptic Says:

    >>>>>>>Advertising, marketing, and public relations tend to celebrate avarice and greed. They foment social disquiet and a sense of unease based upon the quantification of acquisition. The more stuff you have, the better person you are; the happier you will be; the more love you will gain.

    Indeed so. The end result? Everybody produces more and consumes more, but everybody HAS a hell of a lot more than they would have otherwise.

    In the capitalist system, you have greedy, evil cooperations giving you (say) 517 different types of cell phones for their own private benefit. 400+ or them have features that are totally unnecessary and are only kept going for a while with agressive advertising, before the companies that make them go bankrupt, and you’re left with–say–100+ choices. (Made-up numbers, but you get the idea).

    In the socialist system, however, you MIGHT have ONE type of government-issued cell phone that PERHAPS compares with the shoddiest and lousiest western-made ones, and tends to break down within a week. (No motivation on the government’s part to care about the consumer). Of course, you probably won’t even have that, since some government beaurocrat probably decided cell phones are an unnecessary trinket “the people” don’t need and is just a way for evil western companies to make money using their evil advertising methods.

    Incidentally, the government beaurocrat in question also usually makes an exception and allows (capitalist-made] cell phones to be owned by government beurocrats just like him, so the result is that you *can* usually get *some* cell phones in the socialist country–at about 10 times the cost, after bribing some officials, and, naturally, only if you have connections.

    Call me a naive capitalist brainwashed tool, but I sort of prefer the former way, with all its abuses.

    Incidentally, the idea that advertisement somehow determines demand is terribly naive. Sure, it helps. But there are numerous examples of products “everybody would buy” that totally failed–in fact, the *great majority* of products fail–because they do not convince the public they really need them. This 90%+ or so failure rate of new products is rather strange, if advertisement is such a fail-safe propaganda method for the evil capitalist bosses, isn’t it?

  111. Randy Bessinger Says:

    How does the fun recent events and the mass govt intervention to save a run on the banks figure into this. Inquiring minds want to know.

  112. Weekly Economics Lesson: Walter Block on the Environment Says:

    […] the free market and economics in general. The famous scientist and skeptic Michael Shermer has written an article and a great book, The Mind of the Market, about this issue. The majority of people seem to think […]

  113. time to eat these words? Says:

    this article, written by someone who attempts to spend his life devoted to rational thinking, really blew my mind in its blatant disregard for rationality, history, current events, critical thought, and reality.

    its so perfect and timely to read it today, 12 hours after the bailout bill was finalized.

    will this bizarre sect of libertarian skeptics like penn gilette and apparently shermer learn anything from this entire experience, now that we’re finally experiencing the fruits of a free market on a larger scale?

    something tells me no, the cult of free markets and globalization will find a way to live on their minds, like any other virus born of religiosity.

  114. Responsibility? Says:

    Its not anyones job to regulate the market, the better suited and better educated will succeed and the uneducated and less able will utterly fail and their failure will provide money for the wiser. If you want freedom be prepared to lose out to the better suited because they are free to pursue whatever ways to make money possible and therefore your well being is of no concern. compassion for the weak only slows down the free market and clogs the wheels of effective government, allow the market to regulate itself and the those unable to compete or unable to change with the market will lose everything.

  115. Balak Says:

    The End Of American Capitalism?

    By Anthony Faiola
    Friday, October 10, 2008; A01

    The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.

    Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation’s wealth and has upended
    Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

    The Bush administration is considering a partial nationalization of some banks, buying up a portion of their shares to shore them up and restore confidence as part of the $700 billion government bailout. The notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system.


  116. Yahzi Says:

    Hey, Skeptic… now you can respond to the rabid rantings of Responsibility and his “If you’re poor its because you’re stupid and God hates you!” argument. You know, just to show people what balance looks like.

    Free market systems leverage risk for reward. This is great because it maximizes reward. However, there are some areas – like the food supply, political rights, military defense, etc. – that we are unwilling to tolerate any risk in. We don’t want to double the food supply for only a 1% chance of having no food at all next year.

    So it should be pretty self-evident to anyone that capitalism is great for some areas, and not in others. I’m pretty sure Skeptic has acknowledged that capitalism requires regulation, moderation, and is not a universal panacea for all areas of human existence. I think that puts him solidly in the reasonable camp. Balak, Responsibility, et al… would you care to join us?

  117. Steve Schuler Says:

    I would like to see an update by Dr. Shermer on this article in light of the recent crisis in U.S. and world financial markets and the governmental responses to it. Considering the scale of the public funds allotted to help stabilize the markets is it fair to say “We are all Socialist now”?

  118. Mark Deneen Says:

    Everything in the essay is true if you accept the following:

    1. 1/3 of the world must eternally suffer to provide what in other terms is profit.

    2. Enormous uncertainty of existence. Something humans perpetually fight as a natural condition of evolution and survival.

    3. The meaning of life is to be a physical economic gear in an external machinery.

    Otherwise, real deep thinking here.

  119. theraccoun Says:

    Socialist values = good (in general)
    Capitalist value = bad (in general)

    Socialist systems = BAD (in general)
    Capitalist systems = GOOD (in general)

    {excuse the vast oversimplification above}

    The U.S. school system generally reenforces capitalist values (even though most teachers have liberal slants).

    Modern teaching pedagogy, starting largely with Dewey, encourages group work, CREATE(ive) thinking, and NOS. Modern schools aren’t producing innovators. They are producing the wide gap we see in society today. (education is one of my fields, so please argue this point with me)

    Why have our school systems not evolved? Or, better yet, why have they not evolved more rapidly?

    Capitalism, unlike socialism, has the ability to rapidly evolve.

    The U.S. does not have a capitalist system. FAR from it actually

    Deenen, I should hope that people do move away from their addiction and happiness to the material world.

    Let’s get our school systems to start developing this. Then, let’s let an actual capitalist system allow it to thrive.

    {that point seems contradictory to the socialist}

    Deenen, your job is to read “Capitalism and Freedom” by Milton Friedman.

    Skeptic, your job is to brush up on Marx and Einstein’s socialist paper.

    Schuler, your job is to consult a libertarian think tank on how they saw the development of the current economic crisis.

    My job is to go to sleep now and pretend like actually just accomplished something

  120. Russell Says:

    Though I greatly admire your work and thought process, you lost me at the second paragraph (life is short, can’t read on once I find a fatal flaw in argument):

    Businessmen are distrusted, corporations looked at askance, and there is a well-known resentment against those who have most benefited from markets.

    Corporations are created by the state – one can argue their benefits, but Austrians (like Mises) don’t equate corporations with the free market. I think you have conflated corporations and entrepreneurs. They are most certainly not the same thing.

  121. Michelle Says:

    I’m relatively horrified to find this essay and the one on scientology after it on your website. I would have absolutely expected better from you.

  122. Jason Says:

    I wholeheartedly agree with many of the points in Michael Shermer’s article and Skeptic’s posts.


    “# MJ Says:
    March 1st, 2008 at 1:05 am
    >>>> I notice you didn’t mention much about peoples ignorance about fiat currency versus having a free competing currencies backed by gold silver or something of agreed value.
    # Skeptic Says:
    March 1st, 2008 at 8:44 am
    >>>>> That might have to do with the fact that the “fiat currency” conspiracy theorists are ignorant fools who have no earthly idea about basic economics. Nobody who matters agrees with them, for several very good reasons.”

    Er, Michael Shermer quotes von Mises and Austrian School Economics in the beginning of the article. The Austrian School has a VERY coherent, fairly simple explanation of why a DEBT-BASED Fiat currency system, manipulated by interest rates controlled by a cartel (the central bank aka the Federal Reserve), creates bubbles, booms, and the inevitable bust (recession). See Austrian School Economist Murray Rothbard’s books “The Case Against the Fed” and “The Mystery of Banking”:

    The creation of the FED was simply “regulation” designed by the biggest banks of Wall St. in 1910, (nominally competitors) in order to enable cartelization of their banks to address the rising competition and market share of small country banks, and to control the money supply through a central bank (very profitable), in the model of the European central banks. They lobbied Congress and propagandized the public, convincing them that this “regulation” was for their own good. It is no more a “conspiracy” than say, the corn-ethanol-fuel tax break mandate which benefits the corn processing giants. (It was lobbied by pseudo scientific “think tank” papers funded by them).

    The privately-owned FED is a government-granted monopoly with huge central planning powers over the money supply. This in itself is against free market principles. It actually resembles Socialist central planning more than the free market. In fact, one of Marx’s 10 Planks is a “centralized system of credit”.

    The FED institutionalized huge leverage ratios (fractional reserve banking) resulting in massive expansion of credit (aka debt) in the roaring 20’s, and this led to the crash of 1929 and the Great Depression. (Sound familiar?)

    In addition, a DEBT-based fiat currency system with high leverage ratios features rapid contraction of the money supply (actually credit/debt), which accelerates recessions and makes them more severe, whenever there is a market correction to the bubble. Such a rapid contraction is not possible with either a DEBT-FREE fiat system of currency issuance, nor with an asset backed system, nor a system with 100% reserve requirements on demand currency deposits. (None of which are possible with the Federal Reserve Act). Keynes advocated government borrowing from the FED to “stimulate” the economy during recessions, but, guess who his employer was… you guessed it, the FED. Funny, really. The owners of the central bank make a tidy profit from the interest payments government makes on borrowed fiat money.

    Cartelization is against the principles of free markets; Corporations do it by lobbying for laws to erect artificial cost barriers to startup competition (which is by its nature, the best “trust buster”). Such laws distort the free market and destroy the level playing field which is necessary for the free market system to be the most fair system for all. Enron for instance spent big money on lobbying for regulation…

    On the progressive’s complaints… a lot of what the “progressives” call the “evils” of the free market, are really the evils of CORPORATISM (aka Fascism). The common theme again is that these corporations lobby for favors from government. The free market is the VICTIM in this economic crisis, not the culprit. Corporations can and do have a legitimate function, but they should compete on a level playing field, not one shaped in their favor via their lobbying.

    The answer is not Socialism nor more regulation, it’s dismantling all Corporatist regulations that are anti-free market disguised as being “for the common good”, and stamping out corruption in the form of selective enforcement (e.g. see SEC never investigating complaints about Madoff, nor about “naked short selling”).

  123. Matt Says:

    I believe the problem lately is Republicans. They interfere in the markets as much if not more than the Democrats. Unfortunately they claim to be champions of the unregulated, free market. So when their reckless spending and pointless regulations screw up the economy, and corporate types pay for special favors impossible in a free economy, people blame it on the free markets.

  124. Cthulhu Says:

    I’m puzzled as to why Shermer only talks about capitalism as ‘free markets’. Free market capitalism is but one way to use the economic construct; capitalism does not entail free markets. No one is afraid of free markets (at least none that I know), they just see how ideological free markets are. There has never been a ‘free market’; ever. Regulation has always existed within capitalism; even though the amount of regulation has varied. Communism failed because Humans are naturally greedy and lazy. I’m sure many agree with this notion, so then why can’t people tie this notion to free markets? I could never understand this. Free markets fail for the same reasons communism fails, and yet people don’t realize this, or refuse to accept the reality. There will always be federal regulation as long as the state system is in use. Even if free markets were established, it wouldn’t be long until they devolved back into their regulated corporate selves. Free market capitalism is an interesting and positive ideology, but much like the Utopia of communism, it will never be successfully implemented (for good or for worse). I guess the only way for it to work would be to indoctrinate every Human being into fair, hard working people. Oh, the irony…

  125. John O'Grady Says:

    Michael Shermer is a capitalist? Now I’ve seen it all.

  126. Famous Mortimer Says:

    It’s fascinating to watch supposedly Skeptical individuals froth at the mouth at even the mention of free market ideals. Shermer’s essay didn’t merely inspire balanced debate on the topic, it inspired obviously polar views on the issue that provide little promise for a future of more reasoned debate.

    The reason that Shermer is not dedicating a relatively short essay to highlighting every negative aspect of Capitalism is because that sentiment is already expressed in ample quantity by his audience: The Skeptical Community. The responses on this thread tends to reinforce that impression.

    It jives with my theory that many Skeptics come into the fold as rabid Atheists, and then learn that there’s a whole host of other issues to be skeptical about. This proves to be incredibly frustrating, and pedantic, and so they revert to the fingers in the ears strategy. Ad Hominem attacks soon follow.

    It appears that many Skeptics, and Academics seem to have faith in some utopian ideal of human interaction that I believe is childishly absurd, and, in the end, is incredibly damaging to human progress. People have entirely too much confidence in their own world view, and I have found that righteousness to be most common in supposedly Skeptical circles.

    Anyhow, Capitalists critiques are necessary, but individuals, or groups who still pray for the demise of Capitalist systems will be looked upon in the future with the same sense of awe as “The Flat Earth Society.”

    History, and therefore, the future, is not on their side.

  127. Famous Mortimer Says:

    “Communism failed because Humans are naturally greedy and lazy.”

    Soviet Communism failed because people wanted more than their neighbor, and soon realized through an increase in information that their “beastly” Capitalist enemies actually had a higher quality of life. Their government lied to them through their control of the media, and intense disinformation campaigns. “Greed,” although you seem to use it in the perjroative sense, is certainly at work here, but laziness has little to do with it. Most people are “lazy” under conditions that do not ultimately benefit them, or the people closest to them. However, I consider that perfectly rational, and well, empowering.

    Not everyone wants to be a member of some wider society. Many people have their lives, and they want to dedicate their resources, and time to that life. They should be allowed to do so, without constant meddling.

    It’s easy to be “lazy” when the government has provided you with a sure path to a dead end job. Again, it’s the lack of understanding of basic human behavior that seems to galvanize these naive views about what human beings want, need, and will tolerate over long periods of time.

    This is what is at the heart of Michael Shermer’s thoughts on the topic, and as usual, it seems to soar directly above the heads of already indoctrinated idealists.

    People talk of socio-economic experimentation in democratic societies as if such systems can be maintained, and instituted in every election cycle. In democratic societies, political strategies constantly come in and out of vogue due to the public’s ability to hire someone new.

    This is why the system which allows for the greatest amount of freedom tends to be the most favored over other systems that institute wide social strategies, or experiments through government coercion. The reality is, such ideological systems cannot be sustained democratically over long periods of time. The government must then find ways to maintain control over the system.

    You could fight tooth and nail to win a single election that promises you your wonderful social scheme. However, it could all be (and would likely be) replaced after the next election unless state tampering was involved. So, you’ll have to do more than groan on about every possible imbalance derived from Capitalism. There isn’t a perfect strategy that benefits all individuals. Freedom, even when it results in some people not benefiting from it, is still better than a system that drags the masses down with it.

  128. Vichy Says:

    Morality is nonsense, and self-interested materialism reflect the facts of reality. Egalitarianism is for monkeys and ants.

  129. Paul Patton Says:

    Michael Shermer’s essay defending free market capitalism has some refreshing aspects. Rather than justifying capitalism by an appeal to “human nature”, he admits that it is completely foreign to the evolutionary egalitarianism of our hunter gatherer past. He also acknowledges that “Free markets are chaotic and uncertain, uncontrollable and unpredictable.” and that people have little tolerance for this uncertainty. While conceding these major points to free market skeptics, he then resorts to the usual tired dogma of free market supporters.

    Shermer tells us that while in all other forms of society economic inequalities occur when elites “exploited an unfair and rigged social system to achieve gains best described as ill-gotten”, capitalism is uniquely different. Inequalities like the billion dollar paychecks of some corporate CEOs, we are supposed to believe, are the result of “natural differences in drive and talent between members of a society equally free to pursue their right to prosperity”. Shermer offers us no evidence to support this remarkable assertion.

    Former ExxonMobil CEO Lee Raymond earned a salary of $1.7 billion dollars annually. Could it really be that Raymond has 40,000 times the “drive and talent” of a university professor earning $40,000 per year? If so, Mr. Raymond must be truly remarkable. Is he perhaps a superhuman with mutated muscles and neurons that allow him to accomplish tens of thousands of times more work than the human norm? Maybe this is so, but I can think of another possibility. Perhaps Mr. Raymond is simply an ordinary mortal, and capitalism in practice is just like all those other forms of human society in which an unfair and rigged social system produces ill-gotten gains.

  130. Miles White Says:

    It’s such a simple concept really. Markets have been a natural phenomena of human nature since the dawn of man. It’s obviously necessary to accumulate private property for ones own survival. To criticize Capitalism, is to criticize economics. I’d like to see a nation thrive and prosper without wealth to be produced, or traded period. Communist and socialist idealists fall flat on their faces when they encounter this argument. Mises’s economic calculation problem really explains it all. It makes me sad to see intellectuals in this day in age allow themselves to be duped by the same tired old fairy tale utopias.

    “Communism doesn’t work because people like owning stuff.” -Frank Zappa

  131. Paul Adel Says:

    “The meek shall inherit nothing” – Frank Zappa

  132. Paul Adel Says:

    Without comparison to the efficiency of communist/socialist systems (they dont represent a particularly admirable reference point), it must be admitted that capitalism as manifested in the US has a tendency to be plagued by waste and product mediocrity. There is considerable incentive to incorporate planned obsolescence in product design, and convenience of use often translates to wasteful design. Having expressed these criticisms, I still prefer a free market to a managed market, and I prefer democracy to other social structures.
    Democratic capitalist free market systems are a breeding ground for avarice and glorification of power (again, not bothering to compare to communist/socialist systems, which are no better in this regard). The only protection from serious abuse is regulation. Fortunately, our system of government, is built on a system of checks and balances. It is self regulating to a far greater degree than other social structures, with a greater ability for self correcting its course. The greatest challenge faced by the American society is balancing regulation with deregulation. A lot of either is bad. Not enough of either is just as bad. The second greatest challenge is that such a system is prone to hurt the most vulnerable. Altruism is not a positive attribute for participants in a strictly free market sytem. True libertarianism is great for those that can afford it. At the time the constitution was drafted, there was not as much separation between the haves and the have nots (neglecting for the moment the plight of slaves). Libertarianism had less potential for causing harm when there a more even playing field. Noblesse Oblige and tikkun olam are not integral tenets of the libertarian philosophy. Without them, capitalism, free market economy and democracy will continue to make the few more comfortable and the many less comfortable. A republic (a representative democracy) cannot avoid accumulating power in the hands of the few. Lastly, the US political system has reached the point of being entirely motivated by desire for control. The truth, the welfare of the public and the long term consequences of today’s actions have gone by the wayside. The two party political system has outlived it’s usefulness.

  133. jayrayspicer Says:

    I don’t dispute that capitalism has raised our standard of living and enabled society to do great things. I agree that people operating in their own rational best interests has the best chance of making the world the best possible place.

    However, there are three problems with free-market economics that the article does not address. One, people are very, very often not particularly rational in their economic choices, allowing emotional considerations to overtake them. Two, even when they try to be as rational as possible, consumers very rarely have enough information to make the decision that is truly in their own best interests (and producers tend to like it like that). And three, our accounting systems are woefully inadequate to the task of incorporating market externalities into prices. Taken together, this results in, at best, suboptimal societal outcomes. Markets must be regulated to prevent fraud and obfuscation (false advertising), or consumers have no real chance to be equal participants. Accounting systems must be expanded to completely capture and represent all costs.

    So, yay capitalism, great so far, but we have a long ways to go to achieve truly free markets of fully informed, rational participants, and I submit that that would be impossible without government regulation.

  134. Scarlette Says:

    Skeptic said: “The anti-capitalists aren’t, for the most part,the poor. Sure, they would like to *be* rich, sure, but for the most part do not consider the rich, let alone capitalism in general, to have unfairly exploited them.

    The anti-capitalists are usually dissatisfied intellectuals–people who discover that their academic training does not get them what they consider to be their “just reward” or “true worth” in the free market system–that are envious of the rich.

    It is this envy–essentially envy of social status, not envy of money per se–that usually motivates anti-capitalists in the USA. It is envy based, not on the belief that in a just world they would have more money, but on the the belief that, in a just world, they would be the world’s leaders instead of those awful rich people.

    The real cause of anti-capitalism, at least my experience shows, is almost invariably not poverty, but frustrated self-importance–the kind confined (in its more virulent forms, at least) to teenagers and professional intellectuals. The poor, in general, have better sense.”

    I agree with Skeptic. I have been saying the same thing about Robespierre for years now. When you read about him and read some of his writings, it seems that he felt highly offended that he was not in charge and that instead, people that he considered inferior buffons – the aristocrats – were above him in status. These people are very narcisssistic and very dangerous. They must be exposed as often as possible.
    I have also observed that many intellectuals seem to be enamoured with their own thought process and believe that those thought processes are somehow superior to the thought processes of those they consider to be lesser beings. They think that their ideas are unique, they are not, many people have them but most people are not so impressed with their own ideas that they think that they should write books about them. I am not anti-intelectual and do enjoy many of their writings but it is clear to me that some are bitter narcissits. Sartre, De Beauvoir, Nietzsche, Chomsky come to mind.
    Sartre appealed to me when I was a teen-ager, I grew out of it. Sartre never did.

  135. Scarlette Says:

    I forgot to mention my favorite malcontent: Jean-Jacques Rousseau. He was one angry, bitter and resentful man, he spent a lot of time writing about it also. Talk about needing a chill pill!

  136. Paul Says:

    “Why do people distrust free markets?”, writes Shermer.

    It’s easy to state a few hypotheses, and we don’t need to hide behind buzzwords (“new science”) or get thrown off the “evolutionary” trail by a distracting old trope about “liberal bias in the academy”.

    Hypothesis #1: Skeptics have figured out that “free markets” is a buzzterm used by knaves and dupes who shy away from stipulating precisely what a free market is, and is not. Heartland Institute of Chicago, for example, ought to be notorious in this regard. Joe Bast and his crew have been at it for more than twenty years, but if you ask them to explain “free markets”, a spokesman will tell you that he has to ponder your question before getting back to you. When he does get back to you–a day later–he confesses that “free markets” is an imprecise term, that the people who use it approvingly know what it implies. Yet they don’t spell it out in detail so that you can pin them down.

    Hypothesis #2: Skeptics of “free markets”, whatever that is, have actually worked at places like MCI Worldcom, e.g. in business development. They are familiar with the culture of aggressive go-getting. Basically, anything goes so long as it’s not overtly illegal, margins are good, NPV is positive, and IRR is equal to or greater than the target. If a sales mgr or rep doesn’t make quota for too many quarters in a row, he’s shown the door and replaced by a younger gunslinger. But his family still needs food, shelter, etc., so ethics takes a back seat in the mind of the most experienced people. Simply stated, the culture of business militates against ethics.

    And maybe skeptics are familiar with the businesspersons’s doubletalk about regulation. For example, at WCOM, when we didn’t want to extend to a customer some particular term and condition of contract, it was popular to hide behind the FCC’s and local telcos’ regulations, not to mention the firm’s own tariff filings. And it was popular to complain about regulation when we wanted to do something contrary to regulations.

    Of course, forests and mazes of regulation are an excellent way to discourage news entrants and thus limit competition.

    Hypothesis #3: Skeptics of “free markets” know that there’s plenty of market rigging in autos (via indirect subsidies, e.g. roadbuilding, or direct ones, e.g. bailouts for Chrysler and GM), in widebodied passenger aircraft and jet engines (financed in part via militarism), in medicine (state-sponsored trade unions for doctors), for legal services (state-sponsored trade unions for lawyers), in road building and related construction (remember autos?), in airport building (sponsored and financed by various states), in the construction of some sports stadiums, in the prison industry, etc, etc.

    In other words, skeptics have noticed that commerce in America and elsewhere is a set of an organized crime rackets that operate under color of law. You won’t overcome that with scientism, with tripe about a “new science of evolutionary economics”.

    Hypothesis #4: Banking cartels arranged by legislatures at the behest of businesspeople. The Bank of England and Federal Reserve System are examples. Now if virtually every transaction uses the cartel’s bank notes or electronic equivalent, and if the cartel wouldn’t exist without statist intervention, and the state has passed legal tender laws, where’s your free market? A few people like Ron Paul and Murray Rothbard have opposed this, but you won’t find much support for abolishing banking cartels among the product of business schools.

    Hypothesis #5: Shermer noted that “corporations [are] looked at askance”. Well, since when is this statist institution a free-market phenomenon? Well, it’s not…not even close…and you don’t need to hear the term limited liability more than a few times to figure out why investors were so eager to participate as shareholders when this clever institution was hatched centuries ago. Not even shareholders trust each other, hence their disdain for partnerships. So what foolish outsider would trust their businesses? Furthermore, once unburdened of personal responsibility, it’s so much easier for a corporation’s founders to obtain capital and thereby attain economies of scale less easily attained by sole proprietorships and partnerships.

    Now, cheerleaders for capitalism and personal responsibility, you’ve been been cheering away for decades. It’s time for you to put up or shut up. Either you oppose the corporation and do so loudly and clearly and consistently, in which case you have a plausible claim to being an advocates for free markets, or you do not, in which case you are advocates for rigged commerce.

    Hypothesis #6: Cheerleaders and apologists of untrammeled capitalism make excuses for the corporation, not to mention for schemes to subsidize or cartelize this or that industry. Or they clam up in order to avoid having to defend what is so obviously crooked. Or they trot out red herrings in order to poison the well. (For example, they might insinuate that these objections are tainted since they were typed on a computer made by a corp and transmitted by one or more corporations, etc. But such objections are irrelevant, as even Shermer is aware.)

    At any rate, the advocates of capitalism discredit themselves with their excuses or connivance.

    Hypothesis #7: There’s no data to support claims, like Shermer’s, that “[f]ree markets are chaotic and uncertain, uncontrollable and unpredictable”.

    But how would he know? Does he have ANY empirical support, any at all, for the sweeping generalization? As already noted, markets are rigged. They have been for centuries, so if he can’t substantiate his claim a prioristically, he’d better move to a pure, parallel universe to collect the data he needs.

    Hypothesis #8: Cheerleaders for “free markets” reify what does not exist, thereby leading people to confuse this world of racketeering with a world of free markets and honest dealings not sponsored by the state and its monopoly on aggressive violence. But some cheerleaders are so busy cheering that they don’t even notice how foolish they look with bullet wounds in their own feet.

    Hypothesis #9: Businesses everywhere are self-evidently rapacious, scouring life from the seas, chopping down forests, gouging up the ground to get at precious minerals, spreading pollution, and creating an ugly world of trash and litter as fast as they can. They behave less childishly when compelled to do so; from time to time they adopt popular fads like environmentalism for PR.

    Sure enough, the cheerleaders tell us that plunderers have a vested interest in protecting nature, that capitalism is good for prudent management of resources, etc.

    Hypothesis #10: Capitalists make huge fortunes, a share of which is donated to politicians. A little time passes, then rafts of new laws are passed. Some legislators actually confess that they don’t even read the thousands of pages of bills they pass. It’s not hard to figure out what’s going on there.

    Meanwhile, advocates of “free markets” condemn the manifest evil before going back to telling you how good capitalism and free markets are for you and to inveigling you to doubt your own doubt.

    Hypothesis #11: Obamacare. Jacob Sullum of reason magazine described well enough why insurers will like it. But efforts like his fade from memory quickly. What lingers is the fact that capitalists are eager to cash in on demand for medical goods and services through market rigging if they have to.

    Hypothesis #12: The wealthiest and most productive cliques of capitalists are menacing and threatening each other, their enemies, and the world with their armies of mercenaries, their nuclear weapons, and so on. The #1 clique, the USA, has its mercenaries spread throughout the world under the rubric of self-defense. To the personal credit of some advocates of capitalism, the aggressive militarism is condemned unequivocally, and the terrorist attacks of 9/11 attributed to blowback which the USA brought on itself. Naturally, the right wing in America rewards them with sneering and spite.

    Meanwhile, the vast majority of go-getters in Europe, China, and the USA speak loudly and clearly with their silence about their personal definitions of capitalism. Skeptical people conclude that capitalism is perverse.

    We could go on, but 12 ought to suffice.

  137. Brook Andreoli Says:

    Paul’s opinion (above) makes use of a tried and true liberal artiface used everyday in the pages of the “mainstream” and ultra liberal press – the strawman argument.

    So lets get real and leave out the strawman.

    Hypothesis #1: Free markets are EASY to understand, ie, the buyer and seller determine price for a good or service. That all there is to it.

    Hypo #2 illegal activities at companies; hypo #3 market rigging; hypo #4 market rigging w/ legislative assistance; hypo #5 evil corporations; hypo #6 more evil corporations; hypo #7 more market rigging; hypo #9 racketeering; hypo #10 politicians can be bribed: all have nothing to do with free markets. These activities usually fall under illegal and/or unethical practices and occur under every economic system.

    We have three hypos left.

    In hypo #8 Paul seems to be arguing that free markets are bad and that they have never existed. What?

    In hypo #9 he talks about Obama care – definitely not a free market idea.

    Hypo #10 is largely a lot of liberal huffing and puffing about how this country is an evil force without, I might add, providing what the great countries are. More of the USA is evil can be found any day in the “news” section of the “centrist” NY times.

    To be fair, I realize that what Paul is probably trying to say is that a free market system allows or devolves into a system that allows the evil practices he sees. So what.

    No rational argument uses the poor conduct of a few to discredit an economic system – or any other system for that matter.

    If we found out that Ben Franklin was a bank robber no rational person would argue that we should cease using lightening rods (which he invented). Regardless of any of Ben’s shortcomings the lightening rod would still work.

    Likewise, the legal lapses at WorldCom, et al have absolutely no bearing of the efficacy of free markets. They work, as Schermer so eloquently pointed out, the evidence is all around you.

  138. John Steinsvold Says:

    An Alternative to Capitalism (which we need here in the USA)

    The following link takes you to an essay titled: “Home of the Brave?” which was published by the
    Athenaeum Library of Philosophy:

    John Steinsvold

  139. Gordo L-C Says:

    Hey I just wanted everybody here to know that I have been sitting here for the last hour reading this entire comment thread and it has been very educational. Even the nastiness. Awesome debate.

    I come at this from a used-to-be-virulently-anti-capitalist-now-trying-to-clearly-and-rationally-consider-the-facts viewpoint. I have completely opened myself to the very real possibility that I have been wrong in my anti-capitalist beliefs, and have been spending a lot of time and effort trying to get to the bottom of all this. So, the words of every single person here have been immensely helpful. Thank you all for your spirit and for your generally eloquent and well-thought out comments.

    One little side-note, if I may, is directed at the guy above screennamed “Skeptic”: though he makes a lot of excellent points, he relies too much on a couple of bad arguments:

    a). Every criticism of capitalism is wrong because the worst dictatorships of the 20th century were wrong. Dude, you gotta come up with some better material than that, for real.

    b). Everybody who is not a libertarian is a naive, pampered, idealistic middle-class kid from the burbs who never worked a day in his or her life. <—That's just stupid, and you and everybody reading this knows how stupid that is. One might be tempted to return your frequent "college boy" insults by referring to you as a frat boy…

    Skeptic, you make so many excellent points and then obscure them by comparing critics of capitalism to Stalin, or making bigoted generalizations about them which obviously you can't really know. I mean, come on, just because a type of person you don't like (college kid, idealistic, middle-class, etc) believes something it doesn't follow that the belief is automatically untrue (I know you are aware of this, and were just being a jerk on purpose, but still it hurts your argument).

    And your assertions that anyone who has any criticisms of the USA should then not live here is the worst kind of fascist, anti-democratic, anti-American thinking, really, I mean think about it.

    Having said that, I nevertheless kinda admire your style :D

    Okay comrades, time to call it a night. Thanks again!

  140. Mike A Says:

    I would argue that corporate scandal is so prolific that they don’t even report on it – that is been my personal experience. So by your very metric, capitalism is on the decline. However, I am a proponent of free markets, so I hope not, but free markets and totally unregulated free-for-alls are not the same thing. I believe we need a hybrid model that provides for some oversight, and thats really the only stand I am prepared to take right now.

  141. David Olifant Says:

    Over the past six months I have been reading Murray N. Rothbard’s magnum opus “Man, Economy and State/ Power and Market”. It is a long read, but begins with an explanation of economics, based on individual priorities and builds up to a complex economy with long involved production stages. It is clear that the vast improvements in life have occurred from the buildup in capital over generations. Technology has helped, but, without capital, available technologies cannot even be deployed (look at much of Africa).

    Any governmental intervention in the free market obscures the self correcting process that rewards correct entrepreneurial foresight with profit, and punishes poor insight with losses. Capital naturally flows to the best entrpreneurs. The USA used to be lazzies faire, but is currently so bound up in regulation and “tax incentives” as to distort the decision making and feedback processes. If you study economics enough, you realize that the “robber barons” were really not. It is the government that gives advantages to preferred businesses and actually promotes monopolies, rather than breaking them up!

    If you really want to understand economics you must go to and start reading. Government is actually a parasite on freedom. Our democratic republic is perhaps the best invented so far, but the government that is best is that which governs the least. People and businesses all try to use government to give them an advantage (lobbyists). The free market allows people to vote with every purchase what they want. We don’t need to be told by big brother what we should want.

    I was so glad to see Mr. Shermer is a Mises reader!

  142. ullrich fischer Says:

    Megacorporation ethical lapses may be sufficiently uncommon to still warrant outraged comments in the news, but unfortunately, the main flaw in capitalism which Marx pointed out has still not been successfully addressed.

    I completely agree that free markets are a Very Good Thing.

    Unfortunately, they only remain free until one or a few large corporations manage to get their minions in the roles of regulators of their industries and/or pay off politicians to drop “troublesome” regulations. The slow motion collapse of the US “free market” which began with the Reagan era religion of deregulation has so far reached a low point with the collapse of the too-big-to-fail banks. Unless there is an effective anti-oligarchy (which prevents the rise of the “too big to fail” corporations) mechanism in place, Capitalism seems to inevitably lead to kleptocracy. Look how quickly the former USSR degenerated from a “Free Market” (kinda, sorta, wink, wink) democracy to a full-on kleptocracy.

    The US and western democracies had some hard won constitutional protections which slowed the progress of this degeneration, but evidently have not ultimately been able to prevent it. One possible solution might be to change how corporate governance works. Maybe member-owned co-ops could provide the opportunities for progress and competition without the (apparently) inevitable outcome under which the world is currently suffering.

  143. Michael Miller Says:

    Ultimately, all apologia for Capitalism ignore the power of centralization, inheritance and class.
    Like it or not, Capitalism is only a continuation with refinement of the Feudal system of exploiting the wealth creating labor class, often unto death. A serf in the fields was hardly worse off than the guard ringed laborers of Capitalist China’s dorm-filled sweatshops. In both cases, wealth is centered, rather than created, by groups of already wealthy individuals, with only their own gain being of interest.

  144. Lowba Says:

    This has been fascinating reading. I have responded quite late but anyway it needs to be known though (which you may know) that capitalism comes from Western Culture. Western Culture is all about exploitation of something (environment, people, etc) for more power and control. Western Culture views the human as owner of the planet rather than a part of it, in which if you are a part of it then there is real biodiversity. Western Culture is from of course most of Europe, and that is how colonialism took hold in the first place because Western Culture thought it were superior. Well, it still does, and this problem. Back to the biodiversity theme, today’s young culture being based quite solely on technology and mediocrity is opposite to what almost every culture before it came from: the environment. People’s disconnection from the environment spiritually is producing a very narrow minded way of life that to me isn’t fun. I don’t want to create a competition, Western Culture has a lot of great achievements as well. The problem is that when the world is viewed in such a way that ‘sucess’ means earning money then the ‘meaning’ of everyone’s life in Western society is gone, it’s all about more, more, more. Look at the disposition between Bangaladesh with the factory crash that few too many have cared about, they are slaves to the mostly Western First World nations for they give us cheap clothes for little pay, about $36 a month, only a little more than a dollar a day. But even the worst perpetrator’s are slaves to their own dream of mammoth power, in this culture (except in the brilliant aspects of art, science, literature, thought, etc.) no one wins.

    As an Australian, I can’t help think of how the culturally rich countries are only thought of mostly as ‘poor’ and us rich? Rich in what? Yes you have safety (food, water), if your rich plentiful of possessions but even the capitalist rich are exploiting themselves that is what is sad. They rely on constant pleasure from money but their lives have little meaning and in effect benefit no one: Rupert Murdoch, etc and many companies. Success should mean giving use to people’s lives, giving meaning, and giving meaning to their own lives unto which the capitalists don’t and mostly can’t in such a culture.

    What can change this? A change in culture and in the way money is used or even getting rid of it, farmers can farm, people can run shops (of benefit of course), people can take what is required for their lives and focus on creating a magnificent culture, technological advance can continue for science and actual worth, not ‘ease of use’, ‘perfection’ and so that further make pointless and mechanical our lives. I’m not thinking of any political system, it’s just that then cultures can be respectful of each other as cultures, not the empty Western one dominating because it wants power, pleasure pretty much. The indigenous of Australia survived for around 60’000 years in beautiful connection to the environment, biodiversity, sure they were hunter-gatherers but I’m not ridding the idea of farming, farmers can still farm, the population won’t keep exploding because it doesn’t need to in something like this, there are no poor families who need more kids to work for more money in survival.

    Does Western Culture need to stay, to see progression in terms of bigger, bigger towers, bigger cities, more power in which not only has decimating effects on the environment but people’s minds, or can countries discard it and focus on developing incredible cultures, art, life that has meaning. Science can still progress and discover space, but humanity can just focus on not being First World or “civilised”, just enjoying actual ‘life’, progressing in it culturally in things that are a far more real progression than more power, more money, more infrastructure, more people, more possessions (basically more pleasure, which isn’t lasting). If you think more of something artificial will make you happy, like food, money or power than you are as deluded as Shakespeare’s character Macbeth. The problem is directly in the culture that thinks it is so much better than any other culture, imagines itself in a future technological haven which can only be intuitively and emotionally suffering, and just wants more and more. Western Culture can only be drastically changed over time or decided upon to stop. Are we going to keep chasing lustful dreams of pleasure that render our lives meaningless or wake up to this modern tragedy and try to actually ‘survive’ on this planet.

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