Counterfeit capitalism: Trick or treat?
It turns out that $100 bills bearing Ben Franklin’s likeness are not the only thing counterfeited these days. So is the economic system that Franklin and his fellow patriots worked so diligently to create.
Actually, our founders did not create capitalism – the voluntary exchange of goods and services that leads to profit. It already existed.
Rather, they formed a Constitution and system of government that encouraged and protected it. They wanted as little government intervention as possible.
In the email pushback I’ve been getting about my recent comments extolling the virtues of capitalism while decrying the penalties of wealth-redistributionist policies, I realized that a point of clarification is in order: When I refer to “capitalism,” I’m talking about real “capitalism,” not the counterfeit kind.
Real capitalism goes on full display when no one – or no government program – prevents entrepreneurs from succeeding or failing on their own merit, hard work and talent. Counterfeiting takes place when government intervenes to “help” someone avoid failure.
Usually, counterfeit capitalism occurs when cozy relationships develop with the well-connected political types. But then rather than prosper, these operations often fail.
Dramatic examples of the failure of such crony capitalism in recent years: Fannie Mae and Freddie Mac, two government-sponsored lending agencies that tanked, and Solyndra LLC, a California-based solar panel manufacturer. Solyndra failed even though it received $535 million in government loan guarantees — despite warnings to the Obama administration that the company’s books looked cloudy rather than sunny.
Unlikely as it sounds, the Secret Service — the agency charged with finding and shutting down counterfeit operations — offers an idea useful in distinguishing between real and fake “Franklins.”
Secret Service agents don’t spend a lot of time studying counterfeit bills to learn tricks employed by cheaters. Instead, they focus on the real money.
In fact, they come to know the real cash so well that it doesn’t matter what changes counterfeiters make with color, engraving, weight or composition of paper. Trained agents quickly recognize a fake.
When Kentuckians become intimately familiar with the tenets of true capitalism, it won’t matter what tricks counterfeiters try. Commonwealth residents will become competent “agents” of capitalism.
The will see through counterfeit capitalists — governors who collude with overpaid economic development “yes” men to offer economic “ inducements” spun as “tax incentives” or “investments” to get companies to choose Kentucky.
On the campaign trail, these agents will be busy checking out counterfeit claims about how many good private-sector jobs these handouts really create, or my favorite, “save.”
Incidentally, missing from announcements lauding these efforts is any indication of where the money came from for the handouts— taxpayers.
See, these agents will know that real capitalism opts instead for tax-and-labor policies that take the power of choosing economic winners and losers out of the “yes” men’s hands and put it into the hands of job creators.
Counterfeit capitalists brag that they want forced union membership in order to defend an American tradition, “keeping wages high for working families.” But real capitalists support a right-to-work law and say it should be up to individual Kentuckians to decide whether they want to pay a chunk of their paycheck for ineffective labor-union representation.
See how easy it is?
When you recognize real capitalism — and the beauty of profit, enterprise and achievement — you can spot a phony, no matter how good the con artists make it look.