In a recent Huffington Post article, film critic Marshall Fine veritably gushes over Michael Moore’s latest diatribe, Capitalism: A Love Story, calling it “an urgently important piece of work.” The film’s grievances are legitimate and even admirable. Its conclusions and central premise however, are critically flawed.
Michael Moore pinpoints the problem as “two Americas – and most of us are living in the one that routinely gets the short end of the stick. Why? Because that other America – the one in which the bulk of the country’s wealth is owned by the richest one percent of Americans – is so firmly committed to hanging on to what they’ve got and getting more.”
On this point, few Americans would disagree, including myself and certainly including the oft-derided “tea party” movement, which turned out in droves to protest the transfer of billions of dollars of wealth from ordinary citizens in the “short-end-of-the-stick America” to wealthy corporate interests in the “richest-one-percent America.”
But Michael Moore’s analysis of this problem’s root causes is shallow, unsophisticated, and inaccurate. Why are there two such Americas? Because, Moore argues, the Reagan and Bush Administrations “did so much to deregulate and destabilize our economy in the name of the free market.”
Capitalism, as the film’s title suggests, is the culprit and the target of Michael Moore’s misguided polemics. The free market is the problem and more government regulation is the solution. This common line of thought and rhetoric is so tragic not merely because it is mistaken, but because the mistake is predicated on a fundamental misunderstanding of capitalism itself.
Let’s look again at the picture of the two Americas. Let’s call the bad guys Corporate America and their victims Middle America, because they are middle-to-lower class and often caught in the middle between special corporate interests and a corrupt government that rewards and aids those interests in their fleecing of Middle Americans.
How does Corporate America exercise its power and tyranny over Middle America? Moore points it out himself. One of his biggest grievances against corporate America in Capitalism: A Love Story is the seven hundred billion dollar bailout Wall Street received from the government.
Indeed, Moore’s distributor, Overture Films says that Capitalism: A Love Story chronicles what Moore considers “the biggest robbery in the history of this country the massive transfer of U.S. taxpayer money to private financial institutions.” Watch the trailer yourself and see how central the billion dollar corporate bailout is to Moore’s outrage and criticism.
Then remember that capitalism and free markets are based on no interference from the government. In a system of perfect capitalism, the bailouts would not have occurred. Indeed their very occurrence immediately precludes our system of economics from being considered capitalistic. It is not because our economy was so free and unregulated that this occurred, but because our government is allowed to become so involved in our economy.
In a free market, businesses succeed and fail on the basis of their ideas, on their merit in creating value for society. This is determined by the free and voluntary activity of individuals who exchange with others- again, on the basis of what improves and adds value to their lives. In this model, businesses that don’t create value for others… fail.
But in a controlled economy, the government decides who the winners and losers are irrespective of the value they create. In this case, failing businesses which should lose, get propped up as “winners” by the government, with money that is taken by the government, from taxpayers in Middle America, without their free and voluntary consent.
See who the culprit really is? Yes: the government. If the government were restricted to its Constitutionally enumerated powers (minus two centuries of a lot of case law and its many bizarre interpretations thereof), the bailouts would never have occurred. If America were a truly capitalist country, then the government would not be allowed to intervene by taking your wealth and transferring it to businesses that did not merit it.
If you can clearly and emotionally explain to others what I have written above, while vehemently agreeing with them as you should, that the corporations in America are way out of hand in their scope of power and influence, then we may be able to resolve a deep episode of polarization in American history that should never have happened.
For Michael Moore’s fans on “the left” to so deeply resent and abhor the government’s intrusive corporate bailouts, is an encouraging sign and a bright opportunity to clarify what the nature of capitalism and the proper role of government really are. With a little encouragement and clarity from free market proponents, we may yet see the rise of reason in 21st century American politics.
W. E. Messamore blogs at The Humble Libertarian.