Current Spear Point

‘Spear’ Points

October 11, 2006

by Howard V. Hendrix

Dialogue with a Fan

Hi, Howard!

I apologize for taking so long to email you about this as you requested. I hope you haven't lost interest....

I mentioned after one of your panels that you don't really have a problem with capitalism; it's _mercantilism_ that's the proper focus of your displeasure.

Capitalism is a completely apolitical economic system. It is defined according to necessary means for economic flourishing, rather than any particular desired goals: If members of a society have (1) control overtheir personal property , and (2) unfettered access to voluntary cooperationand exchange with others, they have the means to pursue their enlightened self-interest in what turns out to be close to a game-theoretical optimumout of the range of competing economic systems. Capitalism goes nicely with libertarianism, another means-oriented philosophy ("use only peaceful and honest (no initiation of force) means, whatever the goals you choose").Together, they form a recipe for a wholly non-violent and hugely productive society in which nobody "starts up" with anyone else, and all are free to pursue their dreams. The only government required (if any; some argue the following functions are best provided by private agencies) is one that protects individual rights, adjudicates disputes, and brings offenders to justice (preferably with emphasis on restitution rather than retribution). Mercantilism, on the other hand, is predicated on a particular goal: the

welfare and power of business interests. It shares with capitalism a reliance on private property, but in a half-hearted way. Business intereststend to find ways to increase their holdings at the expense of others (typically, those lacking the same degree of commercial and political power), and they can readily do so because government is focused on theirsuccess. It's the use of government force to achieve comparative advantages, and the winks and nods from government as it overlooks the abuses businessesvisit on ordinary folks, that create the sort of environment we now see in the U.S. (and most of the rest of the developed world).

The perfect example of mercantilism in today's America is "corporate welfare," whereby private interests manage to get taxpayer funding for huge developments which they themselves will control and profit from, all because such projects are touted to bring jobs (during development, construction,and operation of their projects), provide a rising tide for the economy in general (exploiting the economic fallacy of unseen consequences: what all that taxpayer money and eventual revenues could have purchased otherwise),and the alleged inability of business to achieve their blue-sky dreams by raising their own capital in a voluntary market (proof positive that the project isn't worthwhile in the big picture).

Note that whenever government is in a position to hand out goodies in return for power and wealth, corruption follows like night follows day. Howeverinnocently it might begin, then, mercantilism will corrupt the government to the detriment of ordinary people. The same is true of other ends- orientedsystems such as mandatory socialism and communism.

With the laissez-faire scheme attending a capitalist-libertarian- minarchistsystem, though, government lacks the official power to play favorites (any unfairness arises " under the table" rather than as a matter of overt policy), and can therefore maintain its integrity much more readily. When the economically powerful are constrained by the even-handed application of the law to the same peaceful and honest means everyone else must employ,there is no reason to object to their justly acquired success—however disproportionate it may seem compared to what the "little guy" enjoys. That is, at least approximately, the sort of system envisioned by America's founders (even if the vision began decomposing before the ink on the Articles of Confederation was dry).

Capitalism, then, is our friend. It is mercantilism _masquerading_ as capitalism that we should oppose.

Best,
(Name withheld)

Howard's Repsonse

Hi, (Name withheld)—

This is a very thoughtful follow-up. Thank you. Since our conversation at Worldcon, I too have been rethinking my choice of words (something to which, as a writer, I'm particularly prone).

I shy away from your use of "mercantilism" as a term because of its established historical context, but I agree with much of the analysis you've put forward in your note. I suppose I was using "capitalism" as shorthand for what might more properly be called "state corporatism" (in which the political power of the state plays handmaiden to the economic power of corporations, or approximately where the US is now) and using the word "socialism" for what might more properly be called "corporate statism" (in which the economic power of corporations plays handmaiden to the political power of the state—think the old USSR).

So instead of the shorthand "capitalism means making a fortune out of someone else's misfortune, while socialism means making a misfortune out of someone else's fortune," I guess I should have said "state corporatism means making a fortune out of someone else's misfortune, while corporate statism means making a misfortune out of someone else's fortune." (Doesn't fall quite so trippingly from the tongue, however.) That these two approaches to cultural organization have a number of similarities, may be said to mirror each other in many ways, and even can comfortably coexist with each other is perhaps best seen in the "one nation, two systems" approach currently being experimented with in China, where a nominally socialist nation-state is getting along just fine with transnational corporatism, thank you.

And in many ways, much of what's going on in terms of cultural organization now goes beyond nation-states per se, so that what we increasingly see is a conflict between globalized corporatism and corporatized internationalism. The former ("globalist") option is nominally more to the political "right" and the latter ("internationalist") option more to the political "left," but both strike me as about equidistant from the minarchic path you suggest in your note.

I'm about to have my website throughly revamped in preparation for the release of my forthcoming novel, /Spears of God/. Any chance you might be willing to see your note posted to my site, along with my response? Let me know. And thanks again.

Best,
Howard V. Hendrix

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