"Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens....Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." ~ John Maynard Keynes
To Resist Capitalism
The totalitarian left is doing what it can to resist the powers of capitalism, and to restrain the possibilities in the marketplace. Their goal with the big government policy is partly to choke to death the free enterprise and spontaneous wealth-creating activities we know as the Market. Their quest must, however, fail; it must fail because it is fundamentally flawed.
Rule number one in long-term combat is to get to know your enemy; otherwise you will not hit him where it really hurts. This is where the left falters ' they do not recognize their enemy for what it really is. Defining capitalism as a bourgeois system of oppressing workers through employment will not help the left defeat its real enemy: the wealth-creation on the free market.
The size of the Western big government states is pushing the spontaneous agreements for mutual benefits on the market back as the state's size increases. It is a temporary gain for the left, but it cannot lead to victory. The only result is the ultimate descent of the state as we know it.
A state, since it is based in full on power structures and coercion, needs the market to produce the wealth it consumes. The larger the 'public' (non-producing) sector of a state gets, the more it is depending on the market ' and the more the market is strained. The public sector is like cancer: it consumes what is healthy in order to grow. The state eats the prosperity produced by individuals seeking to improve their lives; the wealth it confiscates allows it to grow.
This is what the left is unable to understand; that wealth cannot be created through centralized state action. Wealth is created solely through the voluntary agreements between individuals, because their very existence depends on the notion of all parties getting better off. This is wealth-creation: everybody gains.
To the left, the world is a zero sum game: Whatever happens to make somebody better off necessarily makes someone else worse off. Thus the 'exploitative' relationship between the owners of the means of production and the workers: the owner of the means have in their power to employ and dismiss workers, as well as decide what is produced and what is not. The worker has to accept the situation or be unemployed. Also, the left identifies ' correctly ' that the worker is not paid 100% of the value that he produces.
This is however, only part of the situation. The other part is that every enterprise involves risk-taking, from which the worker is relieved through employment. The employer alone faces the risks of the enterprise, while the workers may enjoy stable wage payments. This is not part of the leftist calculation: risk-taking is not part of their world. They simply do not understand business.
But failing to understand the importance of risk-taking in order to achieve great results is not the most important fallacy of the philosophy of the left. Their greatest fallacy is the inability to make a correct identification of the market. The market, they say, is an oppressive structural power in society, where the owners of the means of production force their supply on the populace. Demand in a capitalist society is a direct consequence of advertising and production.
This view is totally flawed. It has been proven again and again that market demand cannot be 'created' through advertising (not even in trying to influence sub-conscious desires) or any other means. Demand may be discovered through providing information on how one's life may be better with a certain product. It is not true to claim that the demand did not exist before a product was advertised ' it simply was an unconscious demand because there was no product to satisfy it.
What it boils down to is what the market is or is not. The left identifies oppressing structures of the market fooling easy-to-fool people. The main point here is that the 'ordinary' man is uneducated, unconscious of his needs and desires, and thereby easy to fool.
Free-marketeers know the market simply is an advanced web of voluntary agreements between people for their mutual benefit. It is based on the notion that people in general have the ability to identify what they want, and act accordingly. Some people may be uneducated or unaware of laws of nature, but all men can rely on reason in making decisions for themselves.
As we can see, the fight between the state and the market, or the left vs. the free-marketeers, is really a struggle between two philosophies of life. The left believes people are stupid and need to be corrected for their own good through the use of force. (The people of the left usually identify themselves as fit for this task.) Libertarians and free-marketeers are not infected with the hubris of the left, and think people fundamentally have the same ability to care for themselves or arrange help if needed.
Who is right is not up to the future, it has already been settled. The left cannot win in their struggle against the market, because people always act rationally: They avoid taxes if taxes eat too much of their salary, they hide their property and do business in the 'black' market if the so-called white market is too regulated. People act in their own rational self-interest, even though they sometimes seem somewhat confused. Simply put, people act on their incentives.
Because of this, the continuous struggle of the leftist state against the market does not hinder men from doing business as they wish. It is instead creating offshore havens and black markets where 'white markets' are too regulated by the state's coercive powers. What the left never seems to understand is: The market will always survive, because the market is 'the people.'