While I’m grateful to Associated Students and the College Republicans for funding a less-than-common voice on our campus, I must say that John Stossel’s talk on libertarianism and capitalism was unimpressive and his arguments were far from convincing. I’ll consider a few in brief that seemed particularly good examples of bad reasoning.
Stossel claims that capitalism does not need much government oversight to correct for the tendency of greedy corporations to “cheat.” His main reasoning is that “word gets out” and cases of corporate corruption are “few and far between.” But there are two fundamental concerns about this defense.
The first is the question regarding who in fact gets the word out. Most major media outlets are themselves corporations, usually subsidiaries of larger corporations. For example, NBC is a subsidiary of General Electric and ABC is owned by the Walt Disney Company. What happens if they cheat? From 2001 to 2003, General Electric paid $9.5 billion less than what their standard corporate tax would have been, the result of “tax incentives” and income reporting loopholes, hardly something you’ll hear about on the “NBC Nightly News.” So the issue of how and how often word gets out remains elusive, especially in the age of for-profit corporate news and inter-corporate cuddling.
The second concern is how “few and far between” the cheaters in capitalism are. The list of cheaters is massive, but I’ll give two examples. Does thwarting the unionization of workers count as cheating? Sounds like it to me. But even the pro-capitalist BusinessWeek admits that, in the 1980s, U.S. industry “conducted one of the most successful anti-union wars ever, illegally firing thousands of workers for exercising their rights to organize.”
What about corporate welfare? These tax credits, incentives and deductions for companies are on the order of $200 billion per year, while a welfare program to people such as Temporary Assistance to Needy Families gets less than $17 billion annually. It seems like Stossel’s later claim that welfare “leads to dependency on the government” is better applied to the capitalist economic conglomerations we call “companies” rather than families that have befallen hard times.
Another weak argument that Stossel made was that socialism is worse than capitalism. His one example is the Soviet Trabant, an unreliable, ugly automobile, makes socialism look bad. Of course, Stossel’s weak analogy fails to mention a number of more relevant factors that explain the low quality automobiles in the USSR.
For starters, the Soviet Union came out of World War II with a scarred social infrastructure and serious economical challenges, which is well known to anyone who has taken a history class. In addition to this problem, 25 percent of the Soviet economy in the 1980s was devoted to defense and foreign affairs, compared to 6 percent for the U.S. When one nation spends 19 percent more of its economy than a more economically powerful nation on building high-performance MiG fighter planes and hydrogen bombs, we should expect a loss in ingenuity in other sectors. Clunkers like the Trabant are expected. This has less to do with economic philosophy, more with other conditions that the Soviets faced. Just for the record, I’m not a communist.
The biggest disappointment that Stossel left me with was his approach to the issue of global warming. According to Stossel, scientists in the 1970s were concerned with “global cooling,” and this supposedly undermines conclusions regarding global warming. Although it is true that scientists were worried about cooling, the concerns are of a different type than those regarding global warming.
Take a look at the 1976 Science article that sparked the late ’70s coverage of global cooling, and you’ll see how misinformed Stossel is on the issue. The expected cooling of the earth is related to orbital variations – in cycles of 20,000 years – not to CO2 emissions. In fact, the authors of the article specifically said that such predictions “apply only to the natural component of future climatic trends – and not to anthropogenic [human caused] effects such as those due to the burning of fossil fuels.” Suppressing evidence is one of those big logical no-no’s.
Take a critical reasoning class and look at some facts, Mr. Stossel. Then we’ll talk about libertarianism, capitalism and science.