Response to LTE on Profit

Tim Peck is a real card
Mountain Xpress | 3/28/2012

Tim Peck is fast becoming my favorite conservative, outpacing the always-entertaining Carl Mumpower. In his March 7 missive, “People and Profits Are in Harmony,” Peck explains the basics of capitalism as a fair exchange between a buyer and seller. And it’s true: capitalism as a theory is a wonderful, productive enterprise, and I don’t doubt profit as an effective motivator. However, it’s just a theory. I could probably make a similar case for communism: In theory, it works great.

Peck is so colorful in his depiction of capitalism, even slipping “property” into the time-honored phrase “life, liberty, and the pursuit of happiness.” What a card.

Capitalism, however, isn’t so wonderful in practice. When huge corporations use their financial power to sway markets (and now politics) in their favor . To put it simply (and to use one of Peck’s examples), “when Steve Jobs invents and sells an iPhone, Apple Corporation profits.” Actually, it profits more, because it pays some overseas workers less than a living wage so that you can pay a little less for your smart phone. Do we all profit from this?

In addition, we don’t have a free market in the U.S., and it’s not because of all those pesky government regulations protecting our land, air and water. No, it’s because our government is either bailing out entire industries or sending subsidies (like the Farm Act) to corporations with no strings attached. Why is the government subsidizing oil companies? Why are banks giving their executives huge bonuses from the bailout funds? The list could go on and on.

One final comment: Corporations are not interested in the public’s best interest, and they never will be. Heck, they aren’t even interested in their employees’ best interests. (If they were, layoffs would be a thing of the past.) They are interested in one thing only: short-term profits, and they will do anything, legal or otherwise, to get it. Now tell me, Mr. Peck, is that in line with “people and profits are in harmony?”

— Mark H. Bloom
Asheville

MY RESPONSE

“Tim Peck is fast becoming my favorite conservative”

I’m not a conservative. I’m a libertarian.

“even slipping “property” into the time-honored phrase”

Yes, that’s the original phrasing. And properly so. Property, liberty and the pursuit of happiness are all derivative of the right to life.

“Capitalism, however, isn’t so wonderful in practice.”

We don’t have a capitalist economy. You say so yourself: “In addition, we don’t have a free market in the U.S”

That is correct. We have a mixed interventionist economy. As you point out yourself. Subsidies and bailouts are the consequence of government interference in the economy and are not characteristics of a free market. In a free market, successful businesses succeed and failing businesses fail.

“‘when Steve Jobs invents and sells an iPhone, Apple Corporation profits.’ Actually, it profits more, because it pays some overseas workers less than a living wage so that you can pay a little less for your smart phone. Do we all profit from this?”

If I pay a little less for my iPhone then I profit a little more too. The buyer of an iPhone profits or they wouldn’t buy one. Right? It’s a voluntary transaction for mutual profit. Also, an overseas worker for the Apple Corporation profits by being offered a job that makes him better off. Or else he wouldn’t take it. Right?

“Corporations are not interested in the public’s best interest, and they never will be.”

Corporations, in a free market, must be entirely concerned with the public’s best interest. Otherwise they could not make a profit. Right? A corporation can’t make a profit by ignoring the interest of its customers; unless the government interferes with anti-competitive legislation, subsidies, bailouts and regulatory capture.

“They are interested in one thing only: short-term profits, and they will do anything, legal or otherwise”

Being interested in short-term profits is perfectly moral. I want corporations to profit because that means they must please me with great products and services to get it. If a corporation, or any other entity, does something otherwise than legal, it is the government’s proper role to protect my rights against fraud and any other crime against my person or property. Instead, the government subsidizes and bails out corporations. As you point out yourself. This is a violation of rights where the government forcibly confiscates my property (money) and gives it to someone else to whom it does not belong. Corporations in a free market, which we agree we do not have, are in perfect harmony with people, as I have shown.

The problem, as you have also pointed out, is with the government. Capitalists trade, government robs. It is not corporations, but the government and its interferences that are wildly out of harmony with people.

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About Tim Peck

Unaffiliated Objectivist
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