Objections

Objections to capitalism, liberty and anarcho-capitalism

This page can start by listing objections and concerns, and link to more detailed sections to analyze and answer the problem.

Capitalism does not produce public goods

See Public goods.

The case of science. Terence Kealey offers three arguments: The first one is a recent OECD comparative analysis of growth between countries with regards to the amount of government funding of science. It shows no positive effect in countries with heavier government funding, whereas it shows positive effects when there is more private R&D investment. The second one is that economic growth trends historically did not improve when government become involved (before/after comparison). The third is the disappearance of "secret publication" of science in favor of the current open model well before governments became involved in science (ie. scientists themselves find it advantageous to share, it is not a disincentive as suggested by the "public goods" argument).

Capitalism under-produces what society needs

More details TBD

Capitalism exploits workers

A variation of this objection is that people in difficult situation cannot afford to exercise choice. Employer can take advantage of people when there is unemployment.

Capitalism leads to monopolies and cartels

It is important to understand what constitutes a monopoly and under what conditions it leads to monopolistic effects (lower quality and higher prices). What are the forces which encourage concentration? What are the forces which encourage fragmentation? How does one define an "industry" or "sector"? What are substitution effects?

Also, it is interesting to look at historical data on monopolies, in light of the above analysis. Which problems occurred? Which forces actually came into play?

For one, identifying a monopoly requires defining the scope of the market. If defined arbitrarily narrowly, it will apparently lack adequate substitutes. Is the iPhones in the market for large-screen touch-based smartphones, consumer smartphones, cellphones, communication devices, or social networking tool?

But more importantly, competitive forces (both actual competition, potential competition, and indirect competition) are sufficient to regulate how much control a company (or a cartel of colluding companies) can get over the market. Despite its dominance of a market, the company will always feel the pressure to perform well or else it will lose customers to rival companies. Anti-competitive conditions can only arise legally from the government (and illegally through other kinds of force, like the mafia). Such government-granted monopolies are indeed harmful to consumers and the market.

Mainstream economists have this theory of so-called "natural monopolies", whereby if a company manages to get far ahead in a capital intensive business with economies of scale, it creates a very difficult situation for competitors and allowing a long-term monopoly (which has bad effects on prices and quality). This theory is often used to justify government stepping in with anti-trust regulations, to "fix the market" and regulate the "unavoidable" monopoly (therefore actually sustains the monopoly). But as Thomas DiLorenzo explains in this presentation, another presentation, and paper, and history shows that such sustained natural monopolies do not exist in practice. All sustained monopolies to date can be traced back to some unfair advantage secured through government (diamonds, cable TV, phone service, railroads, ...). Also, he explains that the supposed problem of "excessive duplication" is also a consequence of a pre-existing public utility. Because of their lack of pricing, economic calculation is impossible so trade-off cannot be made on a rational basis. Even so, this can be mitigated with "competition for the field", whereby utility companies bid for a monopoly contract which is open on auction again every few years.

Government is needed to define the law

Here are some points to stimulate thought on this problem:

• languages (for the most part) emerge without centralized government definition
• governments are in a state of anarchy with regards to each other (no "super-government" defining international law)
• there are already multiple sets of law (from country to country, state to state, city to city), what is the optimal number and how would we know that number?