Hannah and Papa J

Hannah and Papa J

Wednesday, November 23, 2016

In defense of socialists

Dear Hannah,

Let's say for a moment -- hypothetically -- that someone out there had a son and the son hit his head and hitting his head sent him into convulsions; and the going into convulsions sent the man's wife into a panic, and the panic sent her to the hospital, and the hospital sent her to a room.  And let's suppose that the room was empty, and she wondered where the doctor was, and the doctor appeared for five minutes and then disappeared again; and she was given no medicine, and she waited for three hours, and at the end of it all she was sent home without anything more than a recommendation to see another doctor -- and that almost a month later, after receiving absolutely nothing more than a recommendation, she received a bill.  The original charge: $1200.  The cost after insurance: $350.

Now, it is needless to say that this hypothetical woman (who happens in this hypothetical circumstance to be my wife) has a household income of $1200 like so many other working-class families; and that even with a respectable insurance policy, the cost of getting nothing was almost a third of a pay-check (which is the recommended maximum for rent).  It may be even more needless to say that she received something more than nothing.  The hospital was standing.  The room was existent, and filled with light, and all kinds of machines, and a television with cable service and a bed; and a nurse and a doctor with salaried pay, and people to handle phone calls.  To say that she paid for nothing is more than unfair.  But to have received nothing; to have been helped nothing; to have been told nothing useful or calming or anything more than that there is probably someone else who can help you is a very bad purchase for $1200 -- and it might seem a little bit strange that nobody had told her the cost of it before she was charged.

To an unreflecting person, unacquainted with the costs of running a hospital and having it ready for as many kinds of emergencies as possible, this would come across as something like theft in the midst of a tragedy.  After all, we know, deep down inside ourselves and without any kind of questioning, that there exists something in the mind known as fairness; and that an extreme unpleasantry exchanged for something that couldn't even be described as helpful seems a terrible transaction to make -- and that the person receiving the horrible end of it had only the foggiest idea of the transaction that was being made.  Horror leads to waiting, which leads to poverty.  Which leads us to the next realization, which is that it means poverty for only one party, and riches for another.

That there is a class of people living upon this system, not the clerks or the secretaries or the nurses or even the doctors, but a class of people known as hospital capitalists, living and thriving off what in many cases can be described as our misery, is the unfortunate realization everyone comes to the moment he has been gouged.  And it makes even the staunchest capitalists wonder, perhaps in darkest suggestions at the back of the mind, whether capitalism itself is actually right.  Sure, we love it and praise it and talk about how badly things go in socialist countries like Venezuela and Cuba.  But when we come across something as rotten as this, as unfair as this, which comes across so entirely lacking in liberty of choice as this, what are we to make of it, but that we are supporting something immoral?

This gut reaction, horrible in the extreme, is what capitalists have been fighting for centuries.  And the arguments they use against it, however true they are in the long run, and however just in many of the short, are oftentimes seen as nothing more than arguments.  The man in the factory sees things differently.  He sees with his own eyes the things that he makes with his own hands -- and sees somebody else getting rich off them.  He saw women and children working themselves twelve hours a day for six days a week and getting mangled by middle age.  He saw people who owned everything throwing away people who had nothing when the people who had nothing were injured while getting him everything.  And he saw, perhaps most cruelly of all, masses of beautiful and necessary things being thrown in the garbage while people were starving, simply because people who weren't starving couldn't be richer by giving them.

Capitalism, of course, is the only economic system in the world that is tailored to our reality.  Labor, however helpful it looks, has never been the only engine for the creation of wealth.  It requires a mind to think of things people actually want and new ways to make them cheaper and connections to network with and savings to draw from.  And these are the things, brought about by our entrepreneurs (and hospital capitalists), that have made our lives better in innumerable ways we could never have dreamed.  The hospital was expensive, and it was expensive because it fully prepared for anything we could throw at it.  Mass production is production for the masses -- which means it is production for the poor.  The poorest Americans have smart phones and warm clothes.  The banana republics and communist dictatorships on the other hand promised many things and were only capable of delivering one: "justice."  All the unpleasant things we encountered on a day-to-day basis and the inequalities we suffered and the hardships we faced would be borne not only by our populace, but by our capitalists as well; and the capitalists would be lorded over by bureaucrats and statesmen, who were not only incapable of being just when put into power, but who were not even capable of making the things that the capitalists made.  And so men starved -- but they were "equal."  They rotted -- but they rotted in "justice."  People were starving -- but it wasn't because others were throwing their excess food away.

There are ways to improve upon the capitalist system.  There are regulations to be put in place so that people (in hypothetical cases with hypothetical hospitals) can be told what they're getting before they are charged for it.  There are things we can do to ensure we don't kill ourselves by killing our environment.  There are two-day weekends to enjoy, and overtime pay to be paid, and there are things that bosses should never be allowed to do to their workers.  And there are people who are injured on the job who need to be taken care of.  But when it comes down to it, the free holding of property, and the right to do what you want with it, even if it means throwing it away while other people need it, must not only be left in place, but wholeheartedly trusted with our future prosperity.  The explanations for its success lies in books written by Rand and by Mises.  The proof of its success lies in the difference between capitalist and non-capitalist countries.

That capitalism and free men have their backs against the wall shouldn't be a surprise.  They have always had their backs against the wall.  And they have always had their backs against the wall because the arguments against property and liberty are eternal and powerful -- and something that even a child can complain about.  The childish simplicity (and we may almost say morality) of socialism is not anything invented in the 19th century because of The Industrial Revolution.  It is older than the Old Testament and the (sometimes socialist) Laws of Moses*.  It's the response of the human heart to suffering, and a knee-jerk reaction in the face of inequality; and perhaps even more powerfully than this, the inevitable reaction to the haphazardly distributed fortunes of fortune.  We fight the socialist not even because he's ignorant, but because he's human; and our struggle against him exists not because he's a fad, but because he's eternal.  It is our job as capitalists to educate him about the sources of material progress and the horrors of a life without liberty; and to never for one second believe socialists are defeated.  Every new generation is a generation of natural socialists.  Capitalism, on the other hand, is an art of life; and like all arts it is something that has to be made**.

Your father,

*Xenophon writes in his masterpiece The Education of Cyrus that Cyrus's teacher asked him a question.  He asked Cyrus to imagine two boys, one of them large and the other one short, the large boy wearing a jacket too tiny, and the small boy wearing a jacket too big, whether justice would be taking each of their jackets and giving it to the other.  Cyrus's first answer was yes.  His instructor told him he was wrong, and what was more important was that each of them was able to own what he owned and do what he pleased with it.

There will always be two forces working within us.  One of them imagines the way things could be if only we were in charge to change them.  The other way worries that other men may have different ideas about changing what belongs to us.  A history of all tyrannical and utopian governments suggests that despite its shortcomings, people are safer and happier with the latter attitude.

**I know it's common to hear intellecuals complaining about the degeneration of language, but few degenerations are worse than our tendency in the modern age to think of art as anything that can't be used for anything.  Today we think of art as pictures or sounds or dancing.  Yesterday the term art included almost anything related to production; and any blacksmith, any candle-maker, any ship-builder or carpenter or spindler was an artist.  How anyone could not consider a doctor an artist is beyond my understanding.  Anyone skilled at making or doing anything skillful is an artist.  Life itself, if done rightly, is an art; and the people who don't consider businesses artful have (as many in the socialist camps) divorced business from pleasure; although it may be excusable that in a day of mass-manufacturing, much of the artistry is done by machines; and the worker in an assembly line could be considered as something less than an artist.


  1. Interesting read, I agree with your major point that pure socialism does not work, and that capitalism is the best for society. However I disagree with the idea that pure capitalism works without any socialist aspects both in general and specifically in the modern world.
    Capitalism is fantastic if we say the ultimate goal of an organized society is the improvement of that society. It rewards those who contribute to society and improve it.
    However as humans we over value or often lack an understanding of the true value of what we pay for. Pure capitalists would argue that the true value of something is what someone else will pay for it. We know this is false, we know this is false because of the pet rock. We are subject to fads and peer pressure even though what we are paying for is something we could pick up off of any beach in the world.
    However it is more than just little things like the pet rock. Black Tuesday Oct 29th 1929 was caused by a rapid expansion of the US stock market. During the 1920s industrialization was booming, jobs in cities were being created hand over fist and people were borrowing money to buy more stocks. Stocks were being broken down so more and more investors could contribute to the market driving up the value. However those buying the stock had no idea of its TRUE value and when they finally did the market fell corporations that were growing rapidly due to the influx of capital from stock sales were suddenly far over extended and required immediate downsizing. Food production had collapsed because those that were farm hands had moved to cities seeking “the better life”.
    All of this occurred because we had no idea of the actual value of what we were purchasing.
    The software bubble led to the same issues, we as an economy invested in companies that were “on the internet” because that sounded nifty with little or no idea what we were actually buying.
    Housing bubble bundled loans and got rid of risk by selling it to investors. Loan officers stopped caring about how much risk the investors would actually take because it would sell that risk. Instead of overseeing itself it shifted the burden of risk causing the assets that it had so happily disposed of to plummet in value.
    Throughout history Capitalism has been its own worst enemy and failed to realize that when people lose their income, jobs, homes and lives they don’t just go away. They get angry, they commit crimes, and they destabilize governments. Difficult to have trade without a governing body.
    The healthcare system provides a value that is difficult to put a cost on. What they provide is health and peace of mind. We know that there are investors that live off this money and they should to a degree they are organizing and providing a valuable service to our society, either through the use of their capital resources or through the use of their time. However at what point does that investor or organizer become dramatically over valued, simply because they can be.
    Capitalism’s goal is to create a lean and value creating system where things cost what they are worth in the long run. When we talk about life or medicine the actual value of it is hard to determine for any individual.
    It is the lack of competition created in certain situations that lead to price gouging similar to the creation of a monopoly. When you are sick or injured and need a hospital your first instinct isn’t to shop around and look for the best price available. No your first instinct is money be damned let’s get fixed. So you pay whatever they want because you have limited to no alternative. In effect a hospital is the worst form of capitalism it is capitalism without competition. What you are paying for isn’t value or service it’s simply someone saying “shhhh its ok we are here for you”, it is simply an illusion that everything is going to be ok.

  2. "There are ways to improve upon the capitalist system. There are regulations to be put in place so that people (in hypothetical cases with hypothetical hospitals) ..."

    Part of the problem that you and your wife hypothetically experienced is that hospitals, and "the healthcare system" as a whole, are emphatically *not* capitalistic. The closest "the healthcare system" comes to being capitalistic is that abomination frequently termed "crony capitalism" (which is in truth the opposite of capitalistic).