January 21, 2014

Capitalism as the anti-Consumerism

By In Economics

Among the Left’s more contemptible claims is the one that attempts to label the Capitalist as a “consumerist.”  If one holds that Socialism or, more broadly, central planning, is a misguided economic theory, that person therefore is a “consumerist,” apparently only worried about his or her hedonistic pleasures and always looking for an excuse to buy something more.  Rather than spend one’s money on the broken and hungry, because the Capitalist believes that spending is good for the economy, their instinct is to simply “waste” their money on “material things.”

The problem though, is that this is hardly what the Capitalist believes at all!  If capital refers to the accumulation of savings and assets, and the capitalist believes that the economy benefits by expanding these savings, then in fact, he is the anti-consumerist.  Capital-based economics is the theory of economic growth in which the the expansion of the economy and the market depends on the ability to calculate long-term investment given the preferences of the various market players.  A good economy is one with lots of savings and a bad economy is one with the negation of savings, that is, debt.

Consumerism can have two meanings.  The first meaning refers to the belief that demand creates its own supply and that the more people spend in the economy, whether by cash or by credit, the better the economy becomes.  This consumerism is referred to as Keynesianism and is the system which the Capitalists during the first half of the 20th century fought so hard to prevent.  So rather than being consumerists, it is important to realize that the Capitalist’s proper place on the spectrum is to stand directly opposed to systematic consumerism.

In fact, taxation and deficit spending, two anti-Capitalistic measures, perpetuate the consumerist problem.  The money taken under the banner of taxation is always consumed and never saved for capital-building purposes.  The socialist is the consumerist because it is never on their mind that economies grow and prosperity comes by savings and investments.  In fact, the entire idea of savings and investments troubles the idealistic socialist who considers such financial activity as selfish and greedy.

But usually, the critic has something else in mind when calling the Capitalist such a name.  More than likely, rather than attempting to bring Capitalism together with Keynesianism, the name-caller is attempting to take a cheap shot at the libertarian or conservative.  By giving the advocate for free-market economics a tarnished designation, the leftist assumes he has placed himself on the higher moral ground.  If the libertarian is distrustful of government “services,” and knows that he has a better idea of where his own money should be spent, the leftist has decided that, rather than letting the libertarian live his life, he will make certain that the libertarian feels the moral guilt.  The Libertarian is suddenly a consumerist because he would rather purchase a new computer, thereby funding the wage earner and keeping his job alive.  If the Leftist had it his way, the wage earner would be unemployed and, rather than contribute to society based on the skills he has, should simply do nothing except cash checks mailed to him by the government via its bankrupt postal service.  How Utopian.

The irony rests in the fact that the moral relativist who advocates egalitarianism and distributing the wealth is suddenly completely fine with exercising strict ethical judgement, ready to show the world how high and mighty he is in his political ideology.  The irony continues in the fact that the libertarian capitalist advocates for zero theft in the society, government not excepted.  The moral high ground sits under the humble conservative who would rather, despite his own preferences of an ideal world, leave the private property and income of his fellow man alone.

Thou shalt not steal and thou shalt not covet.  Now which ideology, conservative or progressive, is most consistent with ethical standard?  It is not about consumerism.  It is about politics.  Which is about the only thing, besides poverty and death, that “Democracy” brings to the table.

Written by C.Jay Engel

Editor and creator of The Reformed Libertarian. Living in Northern California with his wife, he writes on everything from politics to theology and from culture to economic theory. You can send an email to reformedlibertarian@gmail.com