Category Archives: Capitalism

Western socialism and Eastern capitalism, by Alasdair Macleod

Are the Chinese more capitalistic than the US? From Alasdair Macleod at goldmoney.com:

There has been a significant shift in geopolitics in recent months, with the US consciously deciding to withdraw from Asian conflicts, notably in Afghanistan. But the diplomatic war against Iran also appears to have been downgraded and the US presence in Iraq is to be wound down. Furthermore, President Biden has downplayed his objections to the Nord Stream 2 pipeline between Russia and Germany.

In this, the greatest of Great Games, America has seen the strategic advantage move to the China—Russia partnership, which probably explains why the US is backing off from Asia. Meanwhile, China’s production-based economy is strong while that of the US remains weak, a weakness only disguised by monetary inflation.

China will accelerate her policy of encouraging domestic consumption and trans-Asian trade expansion to become increasingly independent from US markets, which are likely to be hampered by a renewed bout of trade protectionism.

This article examines these and related issues, concluding that China and her close allies will be positioned to survive the worst of a developing monetary and economic crisis about to engulf the West.

Introduction

At the root of the political conflict between the West and China is economics and the global distribution of capital. To understand it, we must sweep away the fog of disinformation, and analyse it dispassionately, devoid of all nationalist instincts.

As soon as the state takes over economic functions from the private sector they get lost and replaced by political objectives. The West’s move from free markets towards greater state control in recent decades while China moved in the opposite direction is behind current geopolitical tensions. Since the days of Deng, China’s authoritarian leadership has prioritised free trade to create national wealth for its people. Meanwhile the objectives of social fairness, to redistribute wealth from the haves to the have-nots, have become a destructive obsession for Western-style democracies.

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It’s About Time We Stopped “Trying Communism”, by Ethan Yang

Communism has never worked. It’s failing now, as it always has before, and it will never work. From Ethan Yang at aier.org:

I don’t know how many protests, solidarity movements, refugees, human rights alerts, economic collapses, and purges are going to get this message through everyone’s heads, Communism is a terrible system of governance. In fact, at this point, we should be consistent. Any government that does not guarantee as to the very justification for its existence, individual rights, open markets, and accountable governance, is worth challenging.

I am of course referring to the ongoing protest in Cuba, to which those on the far left will shamefully attribute to the US embargo on the Communist regime. Others may simply beat around the bush and try to attribute the reasons for the protests to current events. Although all these may contribute to the discontent fueling the Cuban protests, just like every single Communist regime, the ultimate reason why things are going poorly is that the people live under a crushing regime of incompetence and oppression.

To make room for a colleague that will inevitably publish on the Cuban protests in more detail, my article will focus not on Cuba but on the general topic of Communism.

The Shameful Track Record of Communism

Real Communism has never been tried before, but it certainly has been attempted in all sorts of flavors and every single one of them sucked. For some reason, their leaders can’t bring themselves to care about the rights of individuals. Perhaps it undermines their overall collectivist views? Perhaps individual dignity would lead down the slippery slope to capitalism? Perhaps individual rights and preferences are a bourgeois construct? That’s certainly what Che Guevara, the leader of Cuba’s Communist revolution, and Fidel Castro, Communist Cuba’s first leader thought. In fact, Human Progress points out,

“Both Guevara and Castro considered homosexuality a bourgeois decadence. In an interview in 1965, Castro explained that “A deviation of that nature clashes with the concept we have of what a militant communist should be.”

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‘You Just Don’t Understand Socialism Like I Do,’ Says College Freshman To Man Who Escaped Socialism On A Raft

From The Babylon Bee:

MIAMI, FL—While on his way to a summer sociology course at the University of Miami, local college freshman Eddard Pollyton noticed a Cuban American man sitting on a bench. He took the time to lecture the man, who had escaped socialism on a raft when he was young, on why socialism is actually good and how he knows a lot more about socialism than people from socialist countries.

“Greetings!” Pollyton said. “I’m Eddard, he/him. I see from your skin color—which is the most important thing about you—that you are Cuban. Pretty sad how those Cubans aren’t appreciating the great social programs they have right now, am I right?”

The man stared dumbfounded as the student went on and on about private ownership of the means of production, the plight of the proletariat, and the need for the workers to unite and work for the common good. He explained to the man who had nearly starved to death as a child and only survived because his parents had put him on a raft and dared a dangerous sea voyage across the Gulf of Mexico that Cubans have some of the best healthcare, free food and medicine, and literacy programs in the world.

Finally, the man had heard enough. “Get out of here. You young people have no idea what socialism is like, man.”

“Wait a minute—did you just assume my gender?”

https://babylonbee.com/news/you-just-dont-understand-socialism-like-i-do-says-college-freshman-to-man-escaping-socialism-on-raft

Largest Peaceful Protest in Cuba in 6 Decades, Why is AOC Hiding? by Mike “Mish” Shedlock

At first it was hard to tell if the Cuban protests are real or some sort of CIA-manufactured regime-change effort like in Venezuela. Increasingly, it looks like the former. From Mike “Mish” Shedlock at mishtalk.com:

AOC, BLM, the Black Caucus, and Socialists are suddenly and strangely quiet on Cuba.

Largest Peaceful Protest in Cuba in 6 Decades, Why is AOC Hiding?

Patria y Vida

Reader Charles, whom I met in Chicago in my second job after graduating college, suddenly reached out about events in Cuba.

Hello Mish

It is not just Havana. This is no Tiananmen Square. Here are videos from all over the island. Finally, it’s OK to say that the emperor has no clothes.

For years, when Cuban-Americans visited their relatives in Cuba, they noted there was near-universal private disgust with the corrupt Castro regime. But there was also universal fear of its efficient and ruthless secret police and the honeycomb of regime spies throughout the society. So everyone kept quiet.

American tourists were escorted to Potemkin villages by Communist Party guides and special hotels open only to foreigners and staffed by Party members. All who tell the Americans how everyone is really committed to the Revolution.

And the US press, by and large, has bought the story, blaming Cuba’s troubles on the US embargo – even though no other country embargoes Cuba – rather than the corrupt system which squelches capitalism and favors the 5% who are Party members, whether they work or not.

The protesters are NOT protesting shortages and price increases, as much of the US mainline media sympathetic to the regime are reporting. Those who understand Spanish can hear that they are chanting “Liberty!” And “end the dictatorship.” They are protesting the whole terrible system.

Who knows if this will last Already, there are reports of dissenters “disappearing.” But it will be great if the great US left-wing alliance with these dictators is exposed and, with luck, broken.

Charles emailed 12 videos on protests in 12 different Cuban cities.

He also put me in touch with John Suarez, the Executive Director, Center for a Free Cuba.

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Doug Casey on How You Can Think and Act Like a Professional Speculator, by Doug Casey

Doug Casey Speculator

International Man: What personal and psychological blind spots and limitations should a speculator be wary of?

Doug Casey: There is no question that your biggest enemy in the markets is your own psychology.

Everybody suffers from fear when the market is down and greed when the market is up. It’s a matter of getting out of your own head and trying to be objective.

The market doesn’t care what you paid for a stock, bond, or piece of real estate. If you’re underwater, your emotions are wired to tell you to hold on until you can “get out even.” That’s how small losses turn into big losses. If you have a profit, your emotions may tell you to grab it and run before it disappears, which precludes you from ever hitting a long-ball homer or getting a 10–1 shot. You have to be aware of your emotions. They’re not your friends.

What other people do and what the government does create opportunities. Wild fluctuations in the market are scary, but they’re not the problem. The problem is how you react to them—that is, your psyche. For that reason, some people just don’t belong in the market, which will be a real problem over the coming decade as the dollar will lose value rapidly and businesses will flounder.

I expect general financial, economic, and social conditions to be scary and unpleasant in the coming years. They’ll be very tough to navigate for people who don’t have a grounding in economics and the markets.

For one thing, we’ll see the moral and intellectual battle intensify between free marketeers and statists, between capitalists and socialists. I’m an anarchocapitalist, with very well-defined views on these matters. But it’s important not to confuse ideology with investment. A socialist sees government intervention as “good,” a libertarian sees it as “bad,” but a speculator doesn’t clutter his mind with opinions. A speculator doesn’t pass moral judgment on the way things are. He tries to maintain a scientific “value free” approach. His object is to make money, not make a political statement.

Why Aren’t There More Free Market Surgery Centers and Clinics? by G. Keith Smith

This story seems almost too good to be true, especially if you’ve ever been hit with an outrageous medical bill. From G. Keith Smith at mises.org:

[This is a transcript of a talk given June 17, 2021, at the Mises Institute’s Medical Freedom Summit in Salem, New Hampshire.]

On behalf of everyone at the Surgery Center of Oklahoma and the Free Market Medical Association, thank you for the opportunity to speak to you today.

Just over twenty-four years ago the operation of the Surgery Center of Oklahoma began with a simple mission: deliver the highest quality of care at a reasonable and disclosed price. We fancied ourselves free marketeers, not aware of how far we had yet to go to accurately claim this title. Our mission was the opposite mission of the hospitals where we had previously worked. Then, as now, hospitals are focused almost exclusively on revenue, many times inflicting surprise and bankrupting bills on their victims. As physicians working in these hospital systems, we were unwitting accessories to these crimes. We intended to operate our facility differently, intending to serve as both medical and financial advocates for our patients. The Surgery Center of Oklahoma is now viewed as a model of medical services delivered free market style partly because of this simple mission, but more recently due to posting all-inclusive pricing online and the effects this move has imposed on the medical and surgical market. I’d like to begin by describing the state of the industry at the time we decided to walk away from it.

I’d become convinced by the early 1990s that government had no money it had not first stolen and to accept government payment was to receive stolen property. In 1993, three years after I started my anesthesia practice, I therefore stopped accepting government money and stopped filing Medicare claims. I treated Medicare patients outside of the Medicare scheme and usually free of charge. When I began practicing in 1990, Medicare paid me about $1,100 for the anesthesia services required for an open-heart surgery. In 1992, this payment was cut in half. A year later that amount was cut in half. The last two payments I received from Medicare were as follows: $285 for a six-hour cardiac anesthetic and $78 for the anesthesia services required for a knee replacement. These fees had been imposed through a mechanism referred to as the resource-based relative value scale, more appropriately called the Rosemary’s baby of healthcare. According to the folks at Harvard who gave birth to this creature, every physician service had a price and they knew what those prices were. I had read enough about economics by this time to know that this imposed pricing was not personal, as punishing as it seemed. Prices are signals, after all, and Medicare was sending me a signal regarding what they thought the service I provided was worth, or they meant to intentionally cull the ranks. I felt obligated to respond with a rational signal of my own and as I’ve mentioned, I quit participating in their scheme. I still had much to learn about pricing, but I did notice that underpriced services became scarce and overpriced services became abundant.

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USA 2021: Capitalism for the Powerless, Crony-Socialism for the Powerful, by Charles Hugh Smith

Hearing a crony socialist talk about the virtues of capitalism is like listening to an alcoholic preaching the virtues of temperance. From Charles Hugh Smith at oftwominds.com:

The only dynamic that’s even faintly “capitalist” about America’s Crony-Socialism is the price of political corruption is still a “market.”

The supposed “choice” between “capitalism” and “socialism” is a useful fabrication masking the worst of all possible worlds we inhabit: Capitalism for the powerless and Crony-Socialism for the powerful. Capitalism’s primary dynamics are reserved solely for the powerless: market price of money, capital’s exploitive potential, free-for-all competition and creative destruction.

The powerful, on the other hand, bask in the warm glow of socialism: The Federal Reserve protects them from the market cost of money–financiers and the super-wealthy get their money for virtually nothing from the Fed, in virtually unlimited quantities–and the Treasury, Congress and the Executive branch protect them from any losses: their gains are private, but their losses are transferred to the public. The Supreme Court ensures the super-rich maintain this cozy crony-socialism by ensuring they can buy political power via lobbying and campaign contributions–under the laughable excuse of free speech.

Cronies get the best political system money can buy and you–well, you get to carry a sign on the street corner, just before you’re hauled off to jail for disturbing the peace (and you’re banned by social media/search Big Tech, i.e. privatized totalitarianism, for good measure).

The Federal Reserve is America’s financial Politburo: cronies get a free pass, the powerless get nothing. While the three billionaires who own more wealth than the bottom 165 million Americans can borrow unlimited sums for next to nothing thanks to the Fed (i.e. Crony-Socialist Politburo), the 165 million Americans pay exorbitant interest on payday loans, used car loans, student loans, credit cards and so on.

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Leftists’ Perverse View of Capitalism, by Jacob G. Hornberger

The Drug War is not a capitalist institution. Under laissez-faire the choice of drug use would be individuals’ choice, not the state’s. From Jacob G. Hornberger at fff.org:

A recent article at Aljazeera by the noted leftist commentator Belén Fernández exemplifies the perverse mindset that leftists have toward what they call “capitalism.”

In her article, which is entitled “Why Does Mexico Have the World’s ‘Most Violent’ Cities?” Fernández attributes the massive violence in Mexico to the U.S. government’s war on drugs.

So far, so good. She is right on that count. There is no doubt that the drug war has decimated Mexico, in the process killing hundreds of thousands of people and destroying the liberty and security of the Mexican people. The same applies, of course, to other Latin American nations.

But then Fernández goes off the rails. She says that the drug war is part and parcel of America’s “capitalist” system, which, she says, “thrives on the proliferation of strife in general  and the marketing of superficial non-solutions to problems.” As part of this so-called capitalist system, she points out that “the US response to the narco-showdown it created across its southern border has been to throw heaps of money at corrupt and violent Mexican security forces who are often in bed with – who else? – the cartels.”

There is one big problem with Fernández’s analysis, however, one that afflicts many leftists and, in fact, also afflicts many conservatives and, for that matter, many non-ideologues as well. That problem is that she honestly believes that the United States has a “capitalist” system.

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Why Nation-States Will Die-Off in the Information Age, by Joe Jarvis

The Age of Decentralization is upon us, and it may last longer than the Age of Centralization that preceded it. From Joe Jarvis at thedailybell.com:

When was the fall of the Roman Empire? Was it in 410 when the Visigoths sacked Rome, or 455 when the Vandals plundered Rome? Or was it 476, when the last western Roman Emperor was deposed?

Whatever the answer, the people alive on the ground at the time surely did not wake up to a headline saying: “Rome has fallen, commence medieval barbarianism.”

Only later did historians pinpoint certain dates.

It’s possible, therefore, that we are already past the date that will be considered the fall of the American Empire.

Perhaps historians will look back and say that September 11, 2001 marks the sacking of the American Empire. Not because the Twin Towers fell, but because that’s the day rule of law and due process came crashing down as well.

History may shed more light on the silent coup that occurred behind the scenes, which shifted the US governing structure to a relative dictatorship.

Yes, just like in Rome, the appearances carried on. The Senate still passed bills, and the courts still nominally gave fair trials. But the great erosion hit a turning point. From there on out, due process was not required to assassinate enemies of the US, to spy on “potential terrorists”, and even to confiscate property using civil asset forfeiture.

Or perhaps the CIA already took over as dictators in 1963 with the assassination of the last truly elected US President, John F. Kennedy.

Maybe the fall of the American Empire will be seen in terms of the destruction of the US dollar. The 1913 creation of the Federal Reserve, the 1933 debasement of the gold backed currency, and the 1971 total removal of the gold standard from the US dollar are all part of slow downfall.

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The Geopolitics of Gold, by Alasdair Macleod

If the world goes gold, and there’s every reason to think it will, sooner or later, the Chinese will be sitting in the catbird seat. From Alasdair Macleod at goldmoney.com:

A number of events are coming together which are set to push gold prices higher. Besides a combination of continuing inflationary policies and massive future budget deficits undermining the dollar, by closing down derivative market activities new Basel 3 regulations appear set to deflect some demand into physical metals. Furthermore, liquidity in gold markets will contract, potentially making prices more volatile

This article looks at how these developments will affect the undeclared but very real financial and propaganda war being waged by America against China.

China is moving on, enlarging its own middle class which will benefit from a stronger yuan, much as the German and Japanese economies did between 1970—2000. Having dominated economic developments until now, the export trade is becoming less important. With this dependency lessening, the argument in favour of a coup de grace against the dollar by China revealing its true gold position is increasing.

In this article, China’s undeclared gold reserves are quantified, and we can be confident that China has at least 20,000 tonnes “off balance sheet”. For China to openly declare her gold position always was her final, almost nuclear option in the financial war waged against her by America. Unwittingly, by diverting demand from paper gold to physical bullion, Basel 3 may have brought forward that day by default.

Introduction

The imminent introduction of Basel 3’s net stable funding ratio is going to have a major impact on the global banking system, and it is a reasonable assumption that government agencies concerned with geopolitical implications will be considering it from that point of view. And nowhere is this more important than for gold, and by implication the dollar’s unrivalled hegemony.

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