I can’t tell you how often I hear or read that it’s Capitalism that destroyed our economy, business professionals included. So, I decided to write about this because most folks think of Capitalism in terms of Free Market Capitalism and not in any other way.
Well, according to Wikipedia “Free market capitalism consists of a free-price system where supply and demand are allowed to reach their point of equilibrium without intervention by the government. Productive enterprises are privately-owned, and the role of the state is limited to enforcing property rights.”
What’s important to emphasize on is the government role of non interfering in the market. Next, I will share with you a little history on money that will ultimately conclude that Free Market Capitalism has been dead for a long time. It started in 1913 when the U.S. Congress passed the Federal Reserve Act and the United States Revenue Act (creating the IRS).
The Federal Reserve Act gave a private cartel of international bankers control over our monetary policy. Factor in the Legal Tender Act which prohibits any form of lawful money except the Federal Reserve Note, the US Dollar. It is this Legal Tender Law that gives the Federal Reserve bankers their money monopoly. Well, at least our new federal money still had some value. It was backed by gold, but not for long.
The Federal Reserve can control interest rates by expanding or contracting the quantity of money. It can control the financial markets with its “Open Market Operations.” It can create new money, it can negotiate with foreign banks on monetary policies without congressional approval or knowledge. No one – not even the president – has auditing authority over the Federal Reserve, a private corporation not a government agency.
In a free economy the true market value of interests is determined by the availability of savings for investing and future consumption. When an entity such as the Federal Reserve has the power and ability to manipulate interest rates by expanding or contracting the quantity of money, the market cannot correct itself. These false man-induced signals along with government regulations are what create booms and busts in our economy, not free market actions. The Federal Reserve and the government manipulate the appearance of economic prosperity for personal and political gain and then blame free market capitalism when the inevitable adjustments occur (busts).
By creating the Internal Revenue Service (collection arm of the Federal Reserve), we as individuals don’t have the right to our individual production, property and privacy. Congress can change the tax rates and rules at any time, favoring some at the expense of others. Then, in 1931 the Federal Reserve declared war on our dollar by making the first move to remove the gold as its backing. In 1971 Nixon finished the process and from a gold backed dollar we ended up with a fiat dollar backed by the “good faith” of the Federal Reserve and the government.
What we have today is not free market capitalism, it is corporatism. Corporatism is a form of fascism, where big business and government work as partners at the expense of the productive class. We have the military/pharmaceutical/energy/media/industrial complex and the elitist central planners of big government ruling our country. We see a revolving door of big business CEO’s and bankers taking key government positions of power. They then move back into their private positions after accomplishing their goals of amassing great wealth for their friends and themselves.
So, next time you hear anyone complaining about what Capitalism had done to their lives feel free to tell them “It’s not Capitalism, smarty, it’s Corporatism”!