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Does Capitalism Produce Slavery, Monopoly, and Unearned Wealth?

February 8, 2010

A blog commenter asked me the following questions:

So how do you answer socialists who say that capitalism can’t exist without subjugation of native people? Didn’t we form the US that way?

I think it’s a good question, and one I can’t answer–what entitles a man to own a mine or a forest, and from whom did he purchase it?

Also, as a pharmacist, I can tell Jeff that the FDA has been infiltrated by corporate interests–drug companies are helping to write policy that maintains monopolies and to get worthless/dangerous drugs approved for sale in the US.

The problem with government is that it is corruptible and corrupted.

I’m a new ardent fan of Objectivism and Rand. I’m reading “The Virtue of Selfishness” and really enjoying it. Also enjoying old footage on YouTube of Rand on Donahue, and also some of the old Milton Friedman tv specials that feature young Thomas Sowell and Walter Williams as debaters. Just terrific!

First, I’m not an economist, but let me try to answer your questions as objective and clear as possible.

You asked: “So how do you answer socialists who say that capitalism can’t exist without subjugation of native people? Didn’t we form the US that way?”

A must-read book!

A must-read book!

Where did you get this idea? Who initiated this “subjugation of the native people?” Is it the capitalists who helped ended slavery in South America or the statist government? If the government did not interfere in the economy, there would have been real competition among market players, thus ending any form of slavery. The leftists love to equate slavery with capitalism, yet they refuse to look at the slave pens of Maoist China and Leninist/Stalinist Soviet Russia that both killed hundreds of millions of people combined.

If you really read the my blog, which is a sign of HONESTY, you would understand that “the object of capitalism is the conquest of nature. What do I mean by this? Man discovered new machines and ideas through his own mind alone; it was done not by means of force and compulsion.” Do you think a slave pen of 100 million people can produce a revolutionary machine without stealing the products of the free men who produce wealth in their private capacity?
Better know the concept of capitalism.

You asked: “I think it’s a good question, and one I can’t answer–what entitles a man to own a mine or a forest, and from whom did he purchase it?”

What entitles him is his own ability and capacity to produce wealth. Say for example a mine, what value is it to a man if he does not know how to discover and produce a great  wealth underneath a certain land area? I give as example the history of the Anglo-Persian company that discovered and harnessed the vast oil reserve in Iran. The Arabs or the Iranian people have been occupying their country for centuries but they didn’t know what to do with the wealth underneath their feet.

In 1901 William Knox D’Arcy, a millionaire London socialite, negotiated an oil concession with the Shah Mozzafar al-Din Shah Qajar of Persia. He assumed exclusive rights to prospect for oil for 60 years in a vast tract of territory including most of Iran. In exchange the Shah received £20,000, an equal amount in shares of D’Arcy’s company, and a promise of 16% of future profits. D’Arcy nearly lost his entire wealth in that exploration, but due to the brilliance and ability of geologist George Bernard Reynolds, he struck oil in that area, thus the beginning of oil exploration in the Arab region. However, that wealth was later on nationalized by the Iranian regime on the ground that the land where the oil fields were situated were owned by the Iranians by virtue of their birth. If I were the owner of those oil fields, I would have blasted them to smithereens so that the looters would never benefit from the fruits of my mind and labor.

Now the question is, would you ever purchase or occupy a land by prescription if you do not know how to discover and harness the wealth hidden beneath that property? Only a stupid man would say “Yes” if in reality that particular property has no use or value to him in relation to his ability. In today’s terms, you have to purchase such property or obtain a contract from the government for exploration, industrial, or mining endeavor. This is the reason why a nuclear power plant in the Philippines- the Bataan Nuclear Power Plant- died with the fall of dictator Ferdinand Marcos after the Western scientists, engineers and workers left the country. This is why people in Africa remain poor because they don’t know what to do with their rich natural resource. A country may be rich in natural resource, but that’s useless if its people reject reason, the essence of freedom and individual rights, and the concepts of capitalism and individualism.

You said: “Also, as a pharmacist, I can tell Jeff that the FDA has been infiltrated by corporate interests–drug companies are helping to write policy that maintains monopolies and to get worthless/dangerous drugs approved for sale in the US.”

Study economics and you will understand that all economic crises and all breaches of the free market principles and competition have been caused by government interference. In the first place, why should “corporate interests” “infiltrate” the FDA? It’s because it’s clear that the FDA is a regulatory government agency that is in breach of the free market principles and competition. If you study economics and do not just listen to your statist intellectuals and professors, you’d find out that there are government policies and structures that prompt “corporate interests” to trade money for favors. Why would the FDA allow these corporate interests to “write policy that maintains monopolies” if, in the first place, it was created by the government as  a tool to improve the economy? In fact, a free society wouldn’t create a regulatory agency like the FDA if it had respect for the principles of free market capitalism. So you’re now impliedly admitting that the FDA is a government agency that gives favors to “corporate interests.” This is a clear breach of free competition by the government.

Also, try to know the history of the Central Pacific Railroad in America obtained and run by the so-called Big Four through the help of the government. And with the help of the government, they were able to bar new market entrants, which led to monopoly, inefficient services, and high prices of freights and transportation. America was built by a few free-market industrialists like James J. Hill (railroads), John D. Rockefeller (oil), and Cornelius Vanderbilt (steamships) who did not rely on government help.

Monopolies cannot exist under a free-market system. Only the government and government favors can make a monopoly or a cartel happen. Take for example the case of a particular business lobby to bar the entry of new competitors. The big tobacco companies in the US is a good case in point, as they used government powers to prevent the entry of new competitors by means of regulatory laws. If the government did not allow this to happen, then there would be competition and that the prices of products would become lower and more affordable.

Let me give you some questions to ponder:

1. Under a free-market system, can a monopoly exist or last by a few months if it charged high prices? Don’t you think that the smaller players would take advantage of this situation to beat the monopolists by offering lower market prices?

2. What would you do to a barren land, which contains a deposit of uranium, if you don’t know how to discover and produce the wealth hidden beneath that land area? Would you buy the land or occupy it by prescription?

3. In relation to question number 2, what if a scientist discovered a rich deposit of uranium in that barren land and were able to produce wealth after years of labor and investment, would you ask the government to nationalize it on the ground that everybody must benefit from that newly discovered wealth?

4. As a businessman, what would you do if there were government laws that allow businessmen to trade money with the bureaucrats in exchange of government licenses, contracts, favors, or a chance to monopolize the market? Would you join the bandwagon and compete against your competitors by dealing with government bureaucrats?

My two cents…

My Articles on Capitalism: CHOICE: CAPITALISM

I suggest that you read the following:

What They Won’t Tell You About Capitalism
The Truth About the “Robber Barons”

How Capitalism Saved America: the Untold History Of Our Country, from the Pilgrims to the Present by Thomas J. DiLorenzo

Capitalism: The Unknown Ideal by Ayn Rand

13 Comments leave one →
  1. steph permalink
    February 8, 2010 3:38

    I’m with you on the subject of monopolies and the FDA–that’s why I brought the subject up.

    My question is, what do you do with land that contains a uranium deposit, when that land is occupied by native people who hunt and fish that land and live in tents on that land and who feel that land is sacred and don’t wish to move from that land?

    As for the questions you asked:
    1. No (part 1) and yes (part 2)
    2. Nothing.(part 1) Who currently owns the land? (part 2)
    3. Egads! Of course not! I’m anti-statist!
    4. I wish I could say that I would stand up against corruption, and complain about it, and draw publicity to it. Bribery is dishonest.

    I appreciate the dialog.

  2. steph permalink
    February 8, 2010 3:38

    I’m new to the subject, so I apologize for my ignorance. I’m trying to learn.

    Are patents allowed in Capitalism? If I invent a new medication after investing years of research and expense, do I own the intellectual rights to that product, to prevent someone from copying my idea without the same investment and selling my idea at a lower price? I would consider that looting.

    • February 8, 2010 3:38

      You remind me of Atty. Stephan Kinsella.
      You asked: “Are patents allowed in Capitalism? If I invent a new medication after investing years of research and expense, do I own the intellectual rights to that product, to prevent someone from copying my idea without the same investment and selling my idea at a lower price? I would consider that looting.”

      I think I have tackled that issue here, which also contains the great article of Greg Perkins in defense of capitalism and IP right: Anarcho-Capitalism and Intellectual Property Right. I think I used the same example to defend my premise.

  3. February 8, 2010 3:38

    Click HERE TO SEE MY REPLY.

  4. February 8, 2010 3:38

    I saw your article very good contribution to the presentation and can be accounted for, hopefully you stay ahead presents articles like this
    thanks for the article

  5. clay barham permalink
    February 8, 2010 3:38

    I define Rand’s beliefs as shown in Howard Roark’s jury summation, then I add to that John C Calhouns discourse on government, and I have much of what I need to define America and how it grew so prosperous, as cited in The Changing Face of Democrats on Amazon and claysamerica.com. Too bad so many in America today rely on Old World philosophers like Rousseau, Robespierre, Marx and Obama. claysamerica.com

    • February 8, 2010 3:38

      I agree! I look forward to your The Changing Face of Democrats.

  6. Sandy permalink
    June 10, 2010 3:38

    But you don’t know that WE Americans should have built Paradise where there is no more death. We should have built 100-story Tower cities connected to mag-lev Trains (T&T). FYI automobiles killed millions & thus destroyed many more millions of lives (the children the parents left behind, etc.) And yes the wage system IS SLAVERY. Of course wage laborers are slaves, because they’re not owners! Use your brains for once. Corporations are nothing more than slave plantations because employees are slaves, not owners. But corporations enslave every person; for example, there’s no way to buy most things, like computers, refrigerators, etc, from anyone but a corporation. People can’t afford what they need because of their low wage or NO wage/income. Millions are starving thru no fault of their own, except bad luck! Owning you own business is also slavery. The USA’s wage system is slavery & the whole cause of world poverty, it was once the UK. Read “When Corporations Rule the World” & Wm Blum’s “Rogue State: A Guide to the World’s Only Superpower” to see how USA forced every attempt at social justice (all people own all things) to fail! And read (& think) how we should eliminate all work with AUTOMATION! Not create work like capitalists say. T&T would have eliminated most companies. Obviously all people, like starving children, should have a guaranteed income; it’s insane not to do that! The worst jobs were/are mining, tobacco, weapons, automobiles, construction (of small buildings), roads, freeways, fireplaces, oil wells in the oceans (Valdez & BP in Gulf) & every job is harmful & never should have existed because we can now see we should have built Towers & Trains.

    Also debt is slavery (no control). Renting is slavery, for renters but also rental owners (many stories abound of renters killing landlords, & landlords of killing renters…& maybe kidnapping & killing the renters’ children). Play Monopoly & see that you only get rich by good luck! & only one person ends up the winner, like Capitalism. The school & college degree system enslaves all our children, & they don’t learn anything important (science, medicine, 4-5 languages for EVERY person).

    If you don’t like T&T, then you are a mass murderer & worthy of DEATH. Of course all people should own all things. It’s stupid to have it any other way; it’s insane! It’s insane also to let people point to Ayn Rand’s stupid book “Atlas Shrugged” as if to imply that that really happened! Are they stupid or what? It didn’t happen! It was a very stupid book.

    Paradise: a place where there is no more death: no cars or long commutes which killed millions! of parents leaving millions of children without the love & financial & emotional support of parents. Have capitalists ever SEEN a child?? No apparently not. It’s insane that they call CHILD SLAVERY “child labor”! Many American children had to work until the 40’s to support their whole family to buy food! (Newspaper delivery!) But then single parents (who were hit hardest) had to force their children to stay in school until age 18 (12th grade graduation & they still knew nothing about getting a JOB & surviving) or longer, & forced to pay a lot for college degrees which they couldn’t afford…& many still couldn’t ever get a JOB! None of the fast food restaurants should have ever existed, as well as most other JOBS. The wage is slavery.

    No more death: no automobiles. No mines, or robots that do the mining. No tobacco. No weapons, military, police (how can you be stupid enough to think that with equal wealth there would still be crime??)…. no jails, court rooms, no need for child care, no gambling or lotteries or “win money game shows), no houses, lawns, mowers, sidewalks, no trash collecters in T&T, no lumber or paper would have saved millions of trees & we would have had computers a lot sooner since equal wealth would have allowed millions to participate in inventions who were killed in cars, crimes, wars, etc. We’ll all be forced soon to love automation, & Socialism. No more banks or money or lifelong debt (most people never get to “Buy” a house…or washer/dryer, dishwasher, refrigerator, microwave, car, or anything; they were/are working & STARVING in America! The Hoovervilles were filled with families, but the corporate owned MEDIA only made it sound like it was only MEN living there: liesd by omission. Read Michael Parenti’s books, & Noam Chomsky, Howard Zinn, William Blum for sure.

  7. bogz permalink
    October 26, 2012 3:38

    “In today’s terms, you have to purchase such property or obtain a contract from the government for exploration, industrial, or mining endeavor. This is the reason why a nuclear power plant in the Philippines- the Bataan Nuclear Power Plant- died with the fall of dictator Ferdinand Marcos after the Western scientists, engineers and workers left the country.”

    I’m an avid reader of this blog but I have to disagree with this one. The only reason why the aforementioned western professionals left the country is because of the late President Cory closed the power plant down. There was a video I found on the Facebook that shows nothing but Makoy’s rant regarding the nonsensical decision of Cory towards the power plant. I hope you know that.

    • October 26, 2012 3:38

      I must admit I made a mistake with regard to this statement: “In today’s terms, you have to purchase such property or obtain a contract from the government for exploration, industrial, or mining endeavor.”

      Our laws state that lands of public domain are owned by the state. I failed to categorize public lands, which are inalienable, and lands that could be owned by private entities and individuals. Of course, no one can OWN mining and coal-bearing lands in the Philippines. Corporations or entities can only lease them.

      Yes, of course, Cory closed the plant down. Almost every program started by Marcos was shut down by the Yellow regime. I agree with you.

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