[wall.jared]

I recently wrote the following article and posted on social media to share (and attempt to educate) my friends.

http://walljared.wordpress.com/2014/05/16/how-to-win-the-war-on-poverty/

I have received this response:

“I think if you want an example of unfettered capitalism look no further than the late 19th, early 20th, centuries. Very little regulation and the rise of monopolies and collusion in the market. Competition is great and all, but when a company rises up to the point where their product becomes a necessity and they amass so much money that they start buying up the manufacturers of the raw material you run into problems. I agree that there are far too many frivolous regulations in the market, but removing all regulation is just complete lunacy and breeds just as much corruption.”

Here’s what I want to respond, please give me your feedback.

“First off, I have to object to your use of the word lunacy. What I have written comes from years of educating myself on economics, history, and political philosophy since I first became interested in it back in 2008, and I am not a lunatic for believing that the free market is the key to the greatest amount of prosperity for the greatest number of people. You are welcome to disagree with me, but it is that people are so quick to jump to name-calling which makes political discussions so difficult.

That being said, I think of corruption as businesses having special privileges granted to them from a central governing agency and from politicians which they have gotten in bed with, The one major monopoly that arose during the time period you referenced was the Federal Reserve, which was big banks getting in bed with government and being granted the monopolistic privilege of controlling monetary policy, money supply, and interest rates. This monopoly led directly to the Great Depression, and we still see the damages from that monopolistic institution on our economy today. If central governing agencies didn’t have the power to dole out privileges, this type of corruption wouldn’t exist.

Do you have any specific examples of monopolies, collusion, and corruption that arose from unfettered capitalism? I took my time to do some more specific reading into that and couldn’t find anything.”

Thanks!!!

-Jared Wall

[jmherbener]

You might cite the literature on the late 19th century economy which demonstrates that the rise of big business led to more output, greater efficiency, lower prices, and rising real wages. And that collusion and corruption came from state involvement, starting with the railroads subsidies and culminating in anti-trust legislation.

Burton Folsom, The Myth of the Robber Barons.

http://compsys.econproph.net/2013/04/01/benjamin-hayden-book-review-the-myth-of-the-robber-barons-by-burton-folsom/

Thomas DiLorenzo, How Capitalism Built America.

http://mises.org/daily/2317

Gabriel Kolko, The Triumph of Conservatism.

Murray Rothbard, The Origin of the Federal Reserve.

http://mises.org/daily/3823

[wall.jared]

Thank you Professor Herbener! Those articles have a ton of information and the links were a great help.

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