Statists and Keynesian economists point to class disparities and lack of social justice as an example of why Laissez-Faire/Austrian economic policies do not work. They point to the impoverished, both in the developing world and in the United States, as examples of victims of greedy, ruthless capitalism. While these people are righteously pointing at a social and economic problem that needs to be addressed, they need to realize who their real enemy is. The cause of grandiose international corporate exploitation comes not from true capitalism and free enterprise, but from military statism.
Take for example some of the economic injustices in the developing world. Many will quickly point the finger at European colonial imperialists as the reason for poverty, famine, disease, and war in places like Africa, Latin America, South Asia, and the Middle East. This is often true. But these Europeans were not capitalist societies. They were statist societies.
The U.K. began its colonization of India with something known as the East India Company, which was a public company with a royal charter. India had its own social structure in place with a rigid caste system, where Maharajahs and rich Brahmin merchants ruled all the citizens down to the untouchables.
When the British merchants arrived in the 1700s, they began making corporate deals with the highest castes. More and more troops came each year, with the navy escorting the merchant vessels, and army guarding the trading posts. In 1858, the London government seized full control of the Indian subcontinent using full military force. At this point, it is obvious that there is nothing of a free market, capitalist approach in this situation, as it required a military sent by a government to secure the interests of a corporation.
Next we can look at the United States, and the injustices committed against the American Indians in the western US. Despite the household game “Cowboys and Indians,” the cowboy’s real job was to move herds of cattle, not fight the native people. They were ranchers, not trained soldiers, and were scared to death of the American Indians. For the most part, the cowboys left them alone and tried to avoid violent confrontation whenever possible, as they would likely lose.
The westbound railroads were a free enterprise, but dealt with serious roadblocks from the Indian nations and the migrating bison herds. In a free market, it would be the responsibility of the railroad company to negotiate with the American Indian landlords, pay the market price for the land, and take into account the patterns of the bison herds and plan accordingly. Instead, they lobbied the federal government to send cavalry units to commit genocide against the American Indians, starved them by killing the majority of bison herds, and crammed the survivors into reservations. This was made possible and done by uniformed soldiers, not private citizens.
Next came the Scramble for Africa in the 1880s. Most European private sector merchants were terrified of sailing inland into the African continent, and had no idea what was there. It was European government officials, not private corporations, that drew lines on the map of Africa at the Berlin Conference, and sent their respective military’s to seize control of the new territories.
Only after the land was militarily secured did the private companies arrive and set up shop mining diamonds, drilling oil, and hunting ivory. There was the Boer War of 1901, were the U.K. forcibly annexed South Africa from other Europeans, to control diamond mines. Once again, this violence was done by the government through the military, not by private businesses — though certainly corporations are typically not interested in turning down the benefits which military imperialism gains them.
These are not obsolete stories from the 1800s. These corporate colonial interests were practically the motivations behind the Cold War. With the formation of the Central Intelligence Agency and MI-14, new techniques were birthed to maintain this control. Instead of European soldiers, native militias and NATO puppets were secretly armed to suppress independent nationalists and communists.
The examples from the period are countless:
- British Petroleum was based in Iran, and populist minister Mohammed Mossadegh tried to nationalize the company. The CIA staged a coup in 1953.
- U.S.-owned United Fruit plantations operated in Guatemala, until communists took over. In 1954 there was a CIA coup.
- In Cuba, Americans ran off-shore casinos and tobacco companies. Communists seized them, so there was an attempted CIA coup in 1961 (Bay of Pigs).
- Vietnam had rubber plantations run by NATO puppets. Communists seized it, then U.S. goes to war in 1964.
- Nationalist Noriega took Panama, threatening US control of the canal. In 1989 there was a covert US invasion.
- Iraq takes Kuwait and its oil reserves. In 1990 we had Desert Storm.
- The list goes on and on.
Is this to say that private sector businessmen are a bunch of nice guys with their hearts bleeding for social justice, who can do no wrong in a free market? Absolutely not. Is their number one priority doing every single thing possible to make the almighty dollar? Most definitely. But do the malevolent behaviors of these robber barons come from capitalism and free trade? Not really. In modern times, qre these guys more often than not Republicans instead of Democrats? Yes, but they’re a specific type of Republicans: Republicans with big government in their pockets.
As P.J. O’Rourke said, “When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.”
Just imagine a world of free trade without the US or NATO world policing. Most of these corporations would not dare to exploit a sovereign nation if they knew the military or the CIA was not going to go to bat for them. One must ask how many greedy U.S. CEOs would be profiting off child labor in a dangerous alien country, without a CIA-backed military dictatorship securing their interests. Any American capitalist would quake in his britches if he had to co-manage a Malaysian sweatshop with Chinese nationals, accepting the fact that there would be no Marines from the Philippines or Japan swarming in to bail him out if he was threatened with violence by rebelling citizens.
Without big, centralized government and the federal military, one has to wonder how far these evil, greedy “capitalist” exploiters would push the envelope. One can almost certainly guarantee that they would not wander far from their own countries.
As President Reagan said in his Time for Choosing Speech, “there is no right and left, there is only up and down.” So, for all the bleeding-heart social justice activists who want to rage against this, go right on ahead — some of us are on your side here. Just make sure you realize that it’s the “up” you’re angry with, not the “right.” The “right” would not be capable of all this evil without the “up.”
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