Friday, September 19, 2008

"The source of monopoly is not capitalism as such but the special privileges given to institutions such as Freddie and Fannie."

Mr. Tucker is quite right. Capitalism, properly understood, is the only economic system consistent with Christian morality. Mixed-economy capitalism (which is what we have in the U.S.), fascism and socialism all violate the Seventh Commandment, and they all promote monopoly.

Pure capitalism is anti-monopoly. If we own our lives, we own the goods and services generated by our lives' labors. As a corollary, we're free to exchange our goods and services for others' goods and services in a market economy. (We're also free to give our goods and services away, as we're called to do in Christian charity.) The market is self-correcting, as Mr. Tucker deftly illustrates.

Monopoly originates in the State's violations of the Seventh Commandment. Politically-connected special interests receive their funding from the State, which receives its funding through theft and extortion, i.e., taxation. Knowing it risks revolution if it taxes too much, the State creates central banks and grants them the authority to create credit and currency out of thin air. This is counterfeiting--yet another violation of the Seventh Commandment. The resulting inflation steals from those who are prudent and save. The resulting market distortions and misallocated capital precipitate the inevitable boom and bust.

People can be "greedy" (read: A has more things than B thinks he should) under capitalism, fascism or socialism. Throwing the word around gets us nowhere. The question remains: Which economic system is consistent with the Ten Commandments and allows people to flourish? I'd say it's free-market capitalism.



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