Capitalism and Its Fruits

There are times when I am at home when I am too tired to do all the stuff I should be doing, and so like many another American, I repair to the cheap passivity of slouching in the leather chair in front of the flat screen TV that lurks like some kind of pagan altar in my home. But even at my most mind-numbed, the tube still resembles the business end of a 103 channel sewer pipe, pumping cultural detritus into living rooms across the land. Yet one program that I came across while flipping through the channels is a program called "How It's Made" on the Science Channel, a part of the Discover Network, and it allows me to loaf without self-inflicting too much psychic damage. Short segments show the basic processes involved in thousands of the products and devices that our huge, flourishing, modern economy has, Adam Smith-like, made available to households and businesses all over the world.

I have always been fascinated and impressed by the genius and creativity of manufacturing engineers, and the coordination of inputs and outputs by the free market that make possible the cornflakes and tennis shoes of life. Adam Smith's paean to the lead pencil comes to mind, following Locke's similar analysis in chapter Five of his Second Treatise of Government. Which government commissar, looking down from the commanding heights, could coordinate the millions of decisions made every day by free entrepreneurs and managers across this economy?

Among the many items showcased by the program are Binoculars, Sparklers, Rubber Boots, Circular Saw Blades, Anatomical Models, Jukeboxes, Tortilla Chips, Spark Plugs, Pencils, Coffee, Javelins, Cuckoo Clocks, Hearts of Palm, Windshield Wipers, Technical Glass, Washing Machines, Playing Cards, Crossbows, Cine Cameras, Glass Christmas Ornaments, Giant Tires, Microphones, Hot Tubs, Artificial Turf, and Beer Steins.

What do all these products and the industrial processes that make them possible have in common? CAPITAL. When you watch this program you are struck with the scale of the undertaking, and the discrepancy between the size of the production machinery compared to the product being manufactured. Even the least consequential product--the pencil, say--requires a huge industrial array of production facilities and processes to deliver that product into your hands as a consumer. It is the freedom we enjoy under the rule of law, and a constitution that specifically favors commercial activity, that allows the capital formation that makes possible even the simplest items we depend on and take for granted. How much would a handmade pencil cost? $5? $10? Instead, pencils are so cheap you hardly bend over to pick one up that has fallen. The vast array of manufactured items that make your life possible at a price that you hardly even notice is brought to you by CAPITALISM. The private interest of free men, free to make a profit, brings to your door every item in your house, including your house, at a price point that you can afford. Can't afford a $120 trash can for the kitchen? You can buy one for $10.

Take a look at this program sometime, and consider how much of our industrial manufacturing would have been possible under a less free political economy--say, like the one we are steering into now, where grandstanding Congressmen compete with faceless bureaucrats to antagonize with regulation as many aspects of the economy as they can get to.

I grew up hearing about "American ingenuity", about the can-do spirit that made America not only the envy of the world, but its economic engine. We are witnessing the systematic destruction, by way of the tax code, of the system of capital formation that makes it a rational economic decision to build a huge factory full of machine tools and production lines for the manufacture of even the humblest of products that we rely on every day. Without the growth that freedom allows, we will from this day forward begin to live off the capital already in place in the form of plant and equipment, and whatever new enterprises that might seem possible under this new regime will groan under a much heavier burden of taxation and regulation, and now it seems, even open intervention by the Congress in things like executive pay and union affiliation. Obama keeps saying he is laying the groundwork for future economic growth by loading us up with the gargantuan spending he and Pelosi are planning, but they are making the mistake all collectivists make concerning the producers. They assume that regulation and taxation have no essential effect on the level of production. But the increased rate of taxation being contemplated will remove the economic rationale for a huge number of projects on the books right now. There are untold thousands of projects, plans, and dreams that are back on the shelf now under the aspect of the mere threat of increased taxation.

If the Democrats have their way--and it looks like they will--our flourishing economy will begin to decay into the sort of rusting hulks seen all over the collectivist world. It needn't be.

UPDATE:

After reflecting on the blessings conferred by free markets and free minds, consider the "Anti Industrial Coup" being pulled off under our noses by faceless and remorseless bureaucratic fanatics across the spectrum of executive branch agencies. Today, (Mar 26) Robert Tracinski warns that it may already be too late to save our industrial civilization from these radicals.