Here are two pre-Christmas columns that might be of interest, one serious, and one less so.

The serious one is about the Regulation of Interception of Communications Act, or RICA (it’s easy! it’s free!), as the happy mobile operator adverts put it. It’s not some freebie, some bonus. It’s a dangerous and costly exercise that makes communication more expensive, and more vulnerable to an overbearing state.

But it’s Christmas. And what would Christmas be without its thoroughly tacky, plastic commercialisation? Who am I to attack it? Instead, here’s a defence of Boney M in supermarkets.

Enjoy, and to all, I wish you a joyful, relaxed Christmas and an entertaining, wealthy 2010.

Wrenching myself away from the Copenhagen corruption of climate change, I wrote a little paean to capitalism to open the festive season: Capitalism is not unkind. Hope you enjoy it. If not, do protest. Either way, you can comment at The Daily Maverick, once you’ve registered or logged in.

Over on the M&G’s ThoughtLeader, Bert Olivier, an academic of the philosophical persuasion, rails against those who defend “the unforgiveable practices of capitalism”. He leans heavily on a polemic known as “The Corporation”, a documentary (and book) by Joel Bakan on which I’ve written before.

There’s so much to dispute in his post and the comments, I hardly know where to start. As one of the people who frequently offers a defence for the practices of capitalism (most recently here), I’ll make a few general points in rebuttal, though. I’ll refrain from cheap shots about the left-wing utopia from which most of us graduate (or drop out), thus to grow up and discover the real world. There is neat irony, however, in how our academic friend’s comrade in anti-capitalism, above, portrays himself. But enough ad humorem attacks.

Let’s begin by drawing some clear distinctions. Communism and capitalism aren’t just two systems among many. They are logical opposites, and are the only ways we know of organising production and consumption. One can either presume production and consumption are determined individually, or collectively. Collectivism presumes society (as expressed by the state) owns and organises both the production and consumption of its members. Capitalism supposes instead that individuals have the right to use and dispose of the fruits of their own labour as they see fit, without being constrained by any law other than those against infringing the same rights of others.

There are bastardisations of the concept, which is why “free-market capitalism” often needs to be spelt out. State-capitalism, for example, is merely a form of collective organisation. Socialism and communism are both collectivist in nature. The difference between them is a matter of degree, not nature. Any degree of socialism detracts from the general prosperity and must be enforced against the will of citizens. Any control of some parts of the economy, in order to be effective, eventually requires the control of more parts. In extremis, this means the logical conclusion of socialism is communist totalitarianism. Stalin wasn’t a perversion of communism. He was its logical culmination.

Limited socialist principles can appear to work, for a while, in rich countries, just like a rich individual can use his savings for a while without appearing to work for his lifestyle. It is no surprise that the well-intentioned New Deal culminated in the confiscatory taxes and economic malaise of the 1970s, and that a return to free market principles cured this malaise. Western Europe, too, became wealthy thanks to free enterprise and free trade. Poverty declined dramatically, and a large middle class was established. Once wealthy, it appeared to be able to afford a measure of socialism, but a few decades later, it is discovering that its savings are depleted, that not enough new wealth is being created. There is a price to pay for this well-intentioned idealism, and even rich countries find they cannot afford it forever. Unlike European economies, truly free markets need not fear immigration. Socialist markets, however, cannot afford to support even their own people, let alone people whose past production has not been decocted into the common pot. In poor countries, socialism has not offered a remedy for poverty either. It merely keeps the people mired in poverty — and that’s before accounting for the deleterious effects of tyranny or corruption.

The corporation doesn’t rule anyone. They can only profit if they offer things people are prepared to buy, and go to extreme lengths to do so. Do you really believe they determine what we eat, what we watch, what we wear, where we work, and what we do? Would you have more or less choice if you were limited to your own production and barter trade with your neighbours? Thanks to the corporation, we now have a vast array of food, mundane and exotic, on offer, at real prices (relative to our income) that our parents and grandparents would think fantastical. The picture alongside is one of hundreds of stores from which I can choose within five minutes of my home. Thanks to the corporation, we have a huge array of clothing available to us to suit every taste, from ordinary and practical to uber-cool and fashionable. If your needs or interests are more specialised, you probably know a store like the one below. There’s a lot you can say about golfers and golf equipment stores, but you can’t accuse them of not offering choice. And yet, not being controlled by corporations, I have never felt obliged to buy as much as a golf ball.

Corporations determine what we watch and where we work? Whether you sit in front of the TV all day is your problem, but don’t blame the people who create the thousands of different shows for different tastes broadcast on hundreds of different channels. If none of that extraordinary choice satisfies you, you can still read a book, you know. Unlike our parents and grandparents, who were employed for life on the same boring corporate ladder, or our great-grandparents who were stuck on the same farm or village all their lives and did the work their fathers did, the modern professional workforce job-hops every few years. Many work for themselves, from home, doing things that companies don’t think worth doing. You’re saying people do this because they have less choice where to work and what to do than they used to have?

Even if companies are monopolies, people have choices, to buy or not to buy, to spend or save, to buy here or buy there. Only by serving the needs of customers can corporations profit. Therefore, corporations profit only to the degree in which they serve the public good. When talking about monopolies, however, it is important to distinguish between those that are established or protected by law, and those that arise naturally. The latter simply reap the fruits of being better than competitors at providing a particular product or service, and are always vulnerable, should they abuse their position, to the emergence of new competitors with new ideas and better ways of doing things. Their power is restricted by the choice consumers have of buying their products or doing without them, as well as by the possibility for competition to arise — i.e. their power is restricted by the market, just as it would be if they were less powerful competitors. A monopoly’s power becomes unrestricted when it is protected by law. For example, in South Africa, new cellular operators cannot emerge, rendering the three current “competitors” a cartel. To use an example that isn’t likely to be clouded by “essential service” emotion, the same goes for casinos. They are governed not only by licence conditions, but by a limit on the actual number of licences in issue. Hence the lack of choice, the lack of variety, and the uncompetitive house rules.

It is true that rich countries maintain some subsidies or trade barriers. This is not free-market capitalism. This is just as evil as the subsidies or trade barriers maintained by developing countries. The latter are, in fact, much higher, so focusing on farm protectionism in Japan or Europe, for example, is largely a red herring. In any case, no matter whether the rich countries do the right thing — from which their own consumers would benefit — the developing world could gain a great deal of the potential benefits by dropping trade barriers unilaterally. In fact, if they do so, but the rich world doesn’t, the developing world will become more prosperous more rapidly, and there is every chance that they will eventually overtake rich countries — especially those like Europe, where the socialist streak runs deep and trade barriers are relatively high.

On corporate abuses: how many people bought GM’s pickups after the media reported on the fact that they exploded? Its failure to care about the welfare of its customers had a massive impact on the company and its profitability, and on the industry in general. The same goes for other corporate abuses. First, they are covered by laws against theft and fraud — laws which apply to all of us. Second, they open a company to potentially crippling civil liabilities. Third, they can harm the reputation of a company gravely; many have gone bankrupt after the public’s trust was destroyed by a major disaster or consumer safety scandal. Yes, corporate social responsibility is cynical, in some way. It is designed to convince customers that the company is serving them well and deserves their patronage more than a competitor does. I can’t see how this dynamic is a bad thing. Or did you want to start legislating the moral motives for people’s actions?

On subjecting corporations to the state, doesn’t the state serve its citizens, and exist at the pleasure of the people? And isn’t a corporation merely a voluntary association of citizens designed to pool resources and better divide labour, so the whole becomes more productive than the parts? Why, then, if the state is to be subject to the will of the people, advocate that certain groups of people should be subject to the control and regulation of the state (beyond ordinary laws against murder, theft and fraud)? This is philosophically inconsistent with a belief in the freedom of individuals, and a democratically elected state with constitutionally limited power, established by citizens to uphold laws that protect common rights and liberties.

Undoubtedly, some people do not act legally, or charitably, or morally. But this doesn’t change when you place them in a state bureaucracy with power over citizens. As long as such actions fall outside the boundaries of limited and justly applied law under which everyone’s rights are protected from infringement by another, individual self-interest pursued through free association and voluntary choice remains the best way to organise production in society. If you demand to see why, to quote Christpher Wren’s epitaph, look around you.

Beyond the ties that bind us all — to respect the person and property rights of others — what justification is there for wishing to tie down the capitalist Gulliver? What will be the consequences, unintended or otherwise? Fewer choices? Lost wealth creation? Fewer jobs? Less innovation? Forfeit poverty alleviation? I contend that there is no justification, except that Gulliver is big and free and independent. This makes the Lilliputians afraid of him. That such an instinctive, emotional response is natural makes it no less irrational.

Free market advocates often hear the charge that they don’t care about the poor. That their belief in the power of markets driven by self-interest and the profit motive implies they’re selfish and egotistical. That the rich exploit the poor. That without government help, the poor would starve.

“Bah!” says the research data, “Humbug!”

Those who place themselves on the right of the political spectrum, according to the General Social Survey in the United States, “are happier, more generous to charities, less likely to commit suicide - and even hug their children more than those on the Left.”

The article in the UK’s Daily Mail is written by Peter Schweizer, a research fellow at the Hoover Institution at Stanford University. It begins light-heartedly, but makes a few telling observations.

It would seem that those who believe in the altruistic power of government merely shift their own feelings of reponsibility (or guilt) onto others. They feel they have the right to force their own notions of what is good, and what needs doing, on their fellow citizens, so they don’t have to bear the cost themselves.

By contrast, capitalists recognise that poverty is good for neither the poor nor the rich. You can’t get rich selling stuff to people with no money. They also can, and do, organise well-targeted charity intervention, promoting voluntarily the things they believe will help other people. Nobody has to accept the charity, and nobody is forced to pay for it against their will. If it doesn’t work, they pull the plug, and the freed capital is allocated to where it might do more good. Just like in the real world. That’s why it works.

What, then, explains the apparent leftward tilt of so many non-governmental organisations and charities? Perhaps they recognise that it is far easier just to get money from government, than to have to answer to private donors who actively manage their charity funding. Perhaps they seek to profit themselves from the “generosity” they enforce on others, and fail to recognise that the funding they draw a salary from has to be created by someone in the first place. Perhaps they just feel the selfish need for self-validation. “Look how unbearably good I am!”

Meanwhile, they apologise for having babies (truly, a friend of mine did so the other day!) and alarm those who share their pessimistic world-view with stories of population explosions and running out of resources. Who was it that said, “If he be like to die, he had better do it, and decrease the surplus population”? Oh yes, that was Scrooge, in Charles Dickens’ rendition of the fictional character.

The survey data quoted by Schweizer puts larges holes in the popular notion that free-market capitalists are simply greedy, or define their self-interest narrowly, or have a “stuff the poor” attitude towards the world. On the contrary: those on the left who (incorrectly) call themselves “progressive” or “liberal” are more likely to fit the generalisation of self-absorbed misanthropy.

Private charity, whether inspired by religion, personal morals or economic interests, predated the modern welfare state by centuries. It now has formidable competition, however, from monopoly services funded by the taxes of the rich. Let’s hope the private charity of generous capitalists doesn’t bleed to death, as the welfare state cuts away at the tastier bits of the goose that lays the golden eggs.

Leon Jacobs alerted me to the hilarious story of a delusional nut named Mark Boyle.

Boyle used to run an organic food company, until he sampled too much of his own merchandise and decided the world should do away with money. Presumably, the owners of the organic food company disagreed. So now Boyle is on a pilgrimage.

Travelling under the name “Saoirse”, which means “freedom” in Gaelic, Boyle won’t stoop to dirtying his hands with grubby money. Instead, he decided to travel the world on foot, subsisting only on peace and love. (And, presumably, a way to blog about it.) His intended destination was Mahatma Ghandi’s birthplace, in India.

Tushar Kanna, an Indian who commented on his blog was rather skeptical of this pilgrimage: “I really dunno what kind of haloed idea of India you have. … I feel if you want to explore India, board onto the next flight to take an enriching experience back home. The country as such is fantastic — a treasure trove of cultures bound to create a single nation. But if you just want to experience poverty, I’d recommend you to rather serve in the slums of Kolkata or Mumbai. Man, you’re really wasting two precious years of your life. … when I told my friends about you in school they passed it off as a story of a crazy foreigner with nothing else to do.”

You can see where this is going, can’t you? Hint: it’s not India. He got as far as Calais before the universe, in which he had placed his trust, told him not to be so daft. That’s where he discovered not only that the French have the audacity of speaking French, but that they don’t particularly like jobless, homeless backpackers, freeloading in their country. Oh, sorry. Calling him a “freeloader” is “harmful to the cause“, it’s unfair, and it’s the exact opposite of “accepting the gifts of the universe”. (By which he means getting some sap to buy him a ferry ticket, and giving him her daughter.)

Not only did the French speak French, but they didn’t much care to trade food for his valuable friendship. Worse, his offers of labour didn’t sell very well in a socialist republic where employment has been curtailed by decades of dirigisme and rigueur, which regulated and protected the unemployment rate until… well, let’s just say France stopped publishing an official unemployment rate.

So Boyle and his buddies made “a really brave decision — to go home”. What poor Britain doesn’t have to put up with. Boyle will now walk around his native country, learning French. Not that I can see why, if the French didn’t like him speaking English (and sleeping in their toilets), the average resident of English seaside towns will love him speaking French. Besides, they don’t speak French in Italy, Turkey, Iran and India, so this is going to be one long tour.

Illustrating the depth of this idiot’s delusion is his comment on a group of Ethiopian refugees he found in France. Apparently, his message about the moneyless life doesn’t apply to people who don’t have money. Especially not when they’re Ethiopians escaping “from Iraq and Afghanistan”. This level of geographic confusion doesn’t bode well for his hope that the next time he hits the road he’ll be more attuned to local culture. Let alone being more attuned to human nature.

Moral of the story? Lay off the organic nuts, lest you become one.

Fidel Castro, the dictator and oppressor-in-chief of communist Cuba, has resigned as president. At last!

For some years now, pundits have been speculating whether Fidel Castro really is still alive. A case in point is the Wall Street Journal’s resident funny man, James Taranto. Despite clear indications to the contrary, Taranto speculated in August 2006 that his condition might improve to such an extent that doctors may soon be able to pronounce him dead. The following January, he noted a headline that began, “Castro Reportedly in Grave…”, and bemoaned the fact that the next word was “Condition”. He wished the adjective were a noun.

I share Taranto’s disdain for Castro. Having overthrown the corrupt Fulgencio Batista almost 50 years ago with promises of liberation, he instead murdered hundreds of opponents, jailed thousands more, and established an oppressive, communist tyranny. The pretence of a glorious revolution for freedom and democracy didn’t last long. However, the cult of El Lider Maximo, as he became known, took on heroic proportions. First, the Bay of Pigs betrayal was spun into a glorious victory by Cuba over the evil Americans. Not long afterwards, the legendary stand-off between him, as proxy for Nikita Kruschev, and John F Kennedy cemented Castro’s reputation, and the secret deal that ended the Cuban missile crisis cemented his political survival and longevity.

Surprisingly, Cuban communism survived — but only just — the collapse of the Soviet Union. However, the real Cuba, described by people other than leftist propagandists led by the nose by state minders, remained rather less romantic than the fantasies of useful idiots would have it. Still, Cuba remains an icon of hope for people who love 1950s automobilia, or pine for the glory days of Soviet anti-capitalism. People like Thabo Mbeki, for example. Apparently, we have a lot to learn from Cuba. I’d agree. We can learn how not to run a country, or an economy, for example.

Here’s hoping Cuba rouses itself from its torpor and shakes off the bonds of Castro’s mind-numbing personality cult. Here’s hoping they reject the regency he has installed, in the person of his brother, Raúl Castro. Here’s hoping that when they do, they also renounce the destructive communist idealism of which El Lider Maximo was one of the last hold-outs. Here’s to the fall of Fidel Castro.

Update: Corrected an error, introduced by careless editing, which made the last sentence of the second paragraph refer to the wrong antecedent.

The American Dream, in essence, says that the limits of a free individual’s ambition are not defined by class or social ambition, but by their own skill, ingenuity, hard work and determination. No matter what your economic condition, you are free to better it by applying your own wits and energy, and no royalty, nobility, government, clergy, community or neighbour can take this right away from you. It does not guarantee everyone instant wealth, nor does it guarantee everyone equal wealth, but it does guarantee that everyone has the same opportunities, and that nobody will have artificial ceilings imposed on what they can achieve in life.

So why is it that people like George Soros, and most recently, Bill Gates, feel obliged to spend their lives as poster-boys for the American Dream, proving the grand successes of liberty, free markets and capitalism, and then when they retire, the proceed to whine bitterly about how unfair their achievement is?

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A frequent theme in political rants, both on the libertarian/anarchist right and the socialist/anarchist left, is the notion of the limited liability company. Usually, the concept of limited liability is defined however it best suits the argument, and usually to negative effect. For example, the film The Corporation (2003) was recently screened on SABC 1 in South Africa. As with most bulk-buy trash, it was a late-night broadcast, and I couldn’t keep my eyes open after an hour and a half of distortion, sly inference, slander, oversimplification, quasi-legal mumbo-jumbo, out-of-context quotation, innuendo, and general anti-capitalist drivel. I’m strong, but not strong enough for 145 minutes of Michael Moore, Noam Chomsky and Naomi Klein all together.

Still, I got the idea: The Corporation, portrayed with sinister madness through a montage of accidents, disasters, lost legal battles, famous frauds, cuts to Hitler and a clever theme of selected crude advertising footage from the 1950s, is evil and dangerous. Worse, you and I are just wide-eyed ingénues too stupid to defend our virtue. For that, we have heroes like Captain Moore, Gnome Chomsky and the Little Gnome. One of the major themes in the film was this notion of (cue dramatic crescendo)… limited liability. It was vaguely interpreted to imply a corporation and the evil people that comprise it — by which they mean everyone above the LOE (line of evility) that you’ll find on every HR (human resources) org chart at about the level of M/CM (middle and compromised management) — gets to deny liability for their actions. In essence, a limited-liability company charter, granted by the evil corporatist government, is a licence to exploit, harm and kill, and exploiting, harming and killing customers and employees is a great way to make money. Or so the illogic goes.

If this kind of thinking is appealing, because you’re either a right-wing anarchist who thinks governments are evil and therefore legal protections granted in corporate law are probably evil too, or you’re a left-wing socialist who thinks corporations are evil and have corrupted government in order to exploit the poor masses, it may be worth reading an excellent essay by Brad Edmonds, over at the Ludwig von Mises Institute, in which he discusses what a limited liability company is and is not, who is and isn’t liable, and on what legal, political and philosophical grounds the concept is based.

Soweto sports a glitzy new mall. Here’s how the Sowetan describes it:

Situated on the Old Potchefstroom Road near Nancefield , the 65 000 square–metre upmarket and trendy mall has proven to be a major drawcard for retailers eager to claim a share of the estimated R4,3 billion Soweto consumer market.

The R650 million mega-shopping complex, with lots of shopping to die for, will house haute couture’s Mertique as one of the “Soweto firsts”.

The huge township south-west of Johannesburg (its name is an acronym), is rising, to quote the cover of an issue of Maverick¹from a few months ago. (Its single-minded focus on print is worth it, if you get it in print, but its website suffers for it.)

The Sowetan must be very out of touch with Soweto. The place has hardly been opened, when Business Report lamented the fact that consumers will now no longer choose small-scale retailers, because the mall will trump them in quality, service, convenience, or price:

Today’s opening of the multimillion-rand Maponya mall in Soweto is grim for business people operating in its environs, who fear for their daily takings and future prospects.

A friend e-mailed a line from the Associated Press report on the opening, in which Richard Maponya, the entrepreneur behind the scheme, declares: “I was convinced that the people really needed a mall.”

“It tells you everything about the modern state of humanity,” this friend wrote. “All everyone needs is a mall, Facebook and a Lotto ticket — and they have friends, a place to shop and some false hope.”

Only people who do have malls can pretend to sneer at them. Choice, economic activity, convenience, those are things that people do want. That’s why malls are popular. To me, it reflects positively on the state of humanity.

People frequent malls because it improves their lives. They’ve done so since the first village markets were established. They make shopping faster and more convenient. They offer more choice in one place. They offer security for shoppers and shopkeepers alike. They create competition which drives prices down. In the end, customers — the ordinary people of Soweto — can have more time on their hands and more money to spare, should they so choose. The Maponya Mall will improve the real quality of life in Soweto, and as all trade does, will create spinoff benefits and growth.

Yes, it also improves the perceived quality of life of the residents. Haute couture is neither a necessity in life nor a panacea for unhappiness. However, it is short-sighted, patronising and hypocritical for rich liberals to sneer at the poor when they too get to enjoy some of the convenience, efficiency, choice and luxury that wealthier people take for granted.

Sometimes I think the rich don’t deserve their lifestyles. Then I think, “Slippery slope!” Before I know it I’ll be wearing a brand-name Che Geuvara t-shirt. No. Let some liberal hypocrite wear it. I know one or two Business Report journalists who do. It suits them.

1. Disclosure: I write for Maverick as a freelance columnist and occasional journalist. [↩]