Why Conservatives Hate Capitalism

by Eric Pepke


The problem is this. People with money aren't doing the things they used to do with money. The "job-creators" aren't creating jobs, and the "lending institutions" aren't lending.

In 1999, I was working in Boca Raton. There was one restaurant I used to go to a lot. It was a fun place, well decorated, with cheerful employees. It was built entirely as a tax break. People with money didn't like paying high taxes, and so they did things to make themselves pay lower taxes.

Over the past decade, the push was to give those with a lot of money lower taxes without their having to do anything. The purported reason was that monied people were just fantastic people who would continue to build restaurants. Unsurprisingly, they didn't. There was no incentive to build restaurants and the like, so they didn't. They liked not having to do those things, because they'd rather not hire lawyers, accountants, construction workers, and waiters who, after all, cost them money.

Why should they? If the economy is depressed, employees are cheaper. If there are foreclosures, they you can buy them cheaper. It's like having more money without the number of dollars getting bigger. Are they going to give up these advantages for the public good? Hardly. Even Alan Greenspan admitted that the idea that the monied were just great people who were interested in keeping the game fair was wrong.

Of course, we could raise their taxes to give them incentives to do things to lower their tax burden again and improve the economy as a side-effect. They understand this. That's how money is made, and how they got their money in the first place. Yet given that they have the money, it's better for them to have everything else go to pot, because it makes the things they grudgingly pay money for (like land and workers) a lot cheaper. It's completely rational. This is by no means a failure of the economy. It's a fantastic deal if you have money.

They know that the economy isn't a zero-sum game for them. They got the money when it was flowing freely, in and out, and they collected some from the flow. The more the money flows, the easier it is to get. When the economy is growing, it's as if there's more and more money, especially with tricks like fractional reserve banking. Whether there actually is more money or not is a semantic parlor game. It's like the laws of thermodynamics, where the flow of heat is how you get useful energy, which is more important than the abstract concept of total energy.

Once you have deep pockets, zero- or negative-sum becomes attractive. When you have a lot, the formerly desirable flow becomes undesirable, because you get worried about flow out. Fortunately, once the economy gets bad enough, the flow out due to savings accounts and 401k's and things like that stops because they run out. If you still have money, you win.

This wouldn't work as easily if people figured it out. So you have to convince people that the economy really is a zero-sum game. Again, fortunately, for most people it is already a zero-sum game or, especially if the economy is bad, a negative-sum game. It isn't difficult to convince them, because people naturally go into zero-sum mode when things are bad to protect what little they have, but there is some art to it.

Formerly, you talked about a high tide raising all boats, trickle-down economics, and investment. Now, you talk about spending, the evils of socialism, and stealing. You misrepresent taxing the rich as a means of redistributing wealth (and in inane cases, punishing success), which it never has been. Running government it what the middle class has been for. It has always been a way to make it cheaper to lower the tax burden through dodges, loopholes, and havens than by buying politicians.

Then a miracle happens, because once people start thinking in terms of a zero-sum or negative-sum game, they don't stop. You start to get allies amongst the poor, though you never let on that they are helping you. This is easy, because if you don't want to lose what you have, they certainly don't want to lose what little they have. Even your ideological opponents will help. They will mock the idea of spending to improve the economy, and thus keep money flow down to a minimum. Socialists are your best friends. The last thing a critic of capitalism wants to see is people prospering under it. There has also been an exploitable tradition of Champagne and Caviar Communism, which if anything is more honest than these modern conservatives who pretend to be capitalists as an alibi for opposing capitalism.

It's quite brilliant. Totally rational, resulting from individual self-interest, with no need for a conspiracy at all. Rich and poor, right and left, all working together to make things suck.