Investment Postcards from Cape Town

Sat 31 Oct 2009

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Ron Paul talks with Larry King about Michael Moore’s view of capitalism, foreign policy, and health care.

Source: CNN (via YouTube), October 29, 2009.

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3 Responses to “ Ron Paul vs. Michael Moore ”

Comments:

1. Paul C Sandison says:
   October 31st, 2009 at 9:51 pm

   An age-old journalistic method is to pitch two rabble-rousers against each other. This was however an interview of Ron Paul while referring to clips of Michael Moore; not the real thing. I suppose it is not surprising that when US capitalism and government is in a crisis that such rubbish is aired in the media.

   For once and for all: Keynes was not a socialist but a liberal capitalist. He owned shares in companies and was a Liberal member of the House of Lords, not a Labour member or a Conservative. Get it? Not a US liberal but a British liberal. If Ron Paul doesn’t know the difference then if he wants to be a real politician and not a rabble-rouser he should find out.

   Paul talks about going abroad for $25000 operations which are cheap because there is no regulation. Does he really think viewers are that stupid? Fine as long as nothing goes wrong with the operation, but what happens when it does, as it will sooner or later for the unlucky ones who get treated by a miscreant quack hiding in an unregulated country? Or just a badly trained local doctor in that country?

   Paul comes across as the uncaring doctor type who disregards patient safety. Where are his ethics? Today is not quite the 1970s when doctors played God and did what they liked. It would be interesting to find out if modern women would like to be treated or operated on by this man.

   Then he says that operations abroad are cheap because there is a market there but not a market in the US. How sickeningly simplistic. Let’s de-construct that. He says in effect: the country abroad has a health market and no regulation and the US has regulation but no market. If that is the case then both places have a serious lack of market efficiency in different ways. The optimal is to have a competitive market and an efficient regulation; but of course that is obviously either beyond Paul’s comprehension or his inclination.

   So what does Paul really want? It is never clear when he speaks. He has made his career by carping at everything and throwing words such as Socialism and Keynesianism around like swear words to scare people who don’t know any better. For US health care it appears he would like market health care with no regulation at all.

   So Paul is not a socialist and not a liberal. But he is not a true conservative either since he doesn’t appear to want market regulation. From the records of his voting behaviour it it appears that Ron Paul votes for the minimum or absence of regulation in almost everything. The only remaining possibility becomes crystal clear: although Ron Paul is a Californian Republican Congressman, he is an anarchist.

   In fact one could fall into apoplexy for less. For Ron Paul’s answer to already unregulated markets or inefficient, practically non-existent regulation is to propose more of the same. Heaven help the US if this is the standard of the average US congressman. For Ron Paul’s history is littered with obstructionist and bizarre contrarian positions. He appears to revel in opposing anything just for the sake of it.

   He should have either stuck to medicine or got some education in politics and economics. He has evidently never bothered to learn or understand what socialism actually is. Socialism is not a national or local government-written regulatory framework of the production of a good or the provision of a service in a market economy. All democratic capitalist governments have to regulate modern markets or you have anarchy.

   The key criteria to knowing whether the production/provision of a good or service is capitalist or socialist are two: ownership and direction (management). In other words: who owns it and who runs it.

   Capitalism is when privately owned companies, big or small, manage their own operations and compete with each other to provide goods and services to the people. To achieve this without fraud, injury and other dangerous activities, each market sector requires a legal framework to ensure employee and consumer protection, backed up by the courts.

   Socialism is when the state, federal and local, owns and directs/manages the means of production of a good or service. The state thus has a monopoly over production in all sectors of the economy. There is no market.

   Socialism requires a dictatorship for it to be enforced because such a system can never be efficient and results in poor quality, shortages and a lack of innovation and product development. Also, the consumer cannot sue for negligence and injustice, poor quality or even report fraud and corruption, because that would be an attack against the government and opposition is not allowed.

   Rather a big difference between Ron Paul’s idea of socialism and the real thing.

   Paul evidently doesn’t like health insurance, certainly universal health care. His ramblings about the poorest always getting help is a blatant dissembling of the truth. He needs to do some work on the community level and development statistics and find some truth. His version of the American Dream is certainly of the raw Social Darwinian kind, the law of the jungle and and the survival of the fittest. He probably has medical insurance himself.

   A problem for insurance is that even if a small minority in the population in focus does not sign up for an insurance it becomes difficult to achieve efficiency, and it leads to an everlasting vicious circle of fees going up. Then more cannot pay and so fees go up again.

   Insurance can only be at its most efficient if it is universal within the population in question. If made universal, the market competition will then be even greater since more people insured mean more companies can enter and compete on that market.

   The recipient of health insurance should be able to choose between any of the private providers of health care. These two measures - of universality and recipient choice are the main pillars of achieving an efficient market.

   In the video Ron Paul mouths words and phrases like corporatism and military-industrial complex, but they are old, threadbare slogans from the 1970’s. He doesn’t substantiate. What does he want instead? If he means that all companies should not have more than say, 10 employees in the US, well, that would take the economy back 200 years.

   So much has been written about Moore it is unnecessary for me to repeat the same reflections, particularly as this video interviewed only Ron Paul, with only a few clips of Moore.

   Suffice it to say this. Moore is like Paul in that he understands no economics and politics. While Paul is ignorant, obstructionist, simplistic and a naive anarchist, Moore is ignorant, confused, simplistic, and either a naive socialist or the old kind of European Social Democrat who believed in a mixed economy where some sectors are owned and run by the state and some by private companies.

   In fact he is so confused it is difficult to know which of the latter Moore is. Perhaps he also doesn’t know that in the last two decades Europe has made considerable strides away from a mixed economy, privatising most of the former state production or state services in most of the EU member countries.

   For example, people in the US often hold up Sweden as the terrible example of European socialism. Yet the Post Office in Sweden has had successful private competition for twenty years. Does the US even have that?

   Contrary to belief, Sweden actually does have a few private schools. More importantly, it introduced ‘free schools’ in 1992 at the same time as the US introduced its Charter Schools. Swedish ‘free schools’ and US Charter Schools are almost exactly the same thing. The private schools and free schools are in competition with local government schooling. There are also private doctors competing with local state clinics and doctors.

   A state bank, a state telecommunications company, the stock market, a state mortgage lender, and a state commercial real estate company are all either privatised or in the process of going private. The state wine and spirits company has been privatised, the pharmacy sector has been opened up to private competition, and the railways are being privatised.

   Similar moves towards privatisation and increasing competition have occurred in most other countries in Europe. The remnants of the mixed economy are fast disappearing in Europe, and replacing it more and more is private enterprise. Therefore: what European socialism exactly does Moore actually refer to when he is put on the spot by interviewers? I don’t think he knows himself.

   Unless he finds out exactly what he wants, Moore should stick to film making. Instead of merely reminding us all what is wrong with US society (which most humanised and informed people on this planet know anyway) and letting others who are infinitely more competent go ahead and fix it, Moore goes too far, and takes a step into politics by being interviewed as a political guru. He uses that platform by suggesting that it is capitalism itself which is wrong and that socialism would be better.

   In sum:
   The answers we need are certainly not those offered by Ron Paul or Michael Moore. If either of these two had the power to decide the US political system the US and the world would be infinitely worse off.

   Despite having been in politics for a long time Ron Paul uses too many simplifications. He does not understand or want to understand what capitalism and socialism is, just as Moore does not understand what socialism and capitalism is. Sadly, it is not possible to understand the one economic system without fully understanding the other. But if one does not take the trouble to learn then one should not be in politics.

   It is a pity Paul is so ignorant that he knows nothing about Keynes. He strews the word Keynesian around like a four-letter word. If he had studied some economics he wouldn’t talk like a back-street vendor ranting to the uneducated.

   Maybe Paul doesn’t even have an on-line computer. In 10 minutes he could read up enough about Keynes to embarrass himself. He certainly does not have much political economic knowledge in his head, yet he has the gall to be in serious politics, influence other congressmen and his country because of his status, and tell other people what is wrong. Yet what people like Paul decide can have disastrous consequences for billions of people across the globe, and frankly, we are sick of people like him.

   To conclude:
   Anarchy cannot be called a system because its nature is to destroy structures. Anarchy destroys the state and the country disintegrates into civil war.

   A socialist system becomes monolithic and set in stone. It is incompatible with democracy and thus unchangeable except by war or inner collapse or both. Standards of production and consumption and quality of life sink to the lowest common denominator. The economy is highly inefficient and hardly grows. Even socialist countries that are richly endowed with resources end up with Mickey Mouse economies and their peoples suffer with a low standard of living throughout their countries.

   Capitalism is infinitely innovative and pliable. It can be formed to serve the basest instincts of man or the finest. If coupled with an efficient, interactive democracy with real influence by its voters, it can serve all well. If not it will serve only a few and oppress the rest.

   It all depends on how its regulatory framework fits each sector and how that framework is continually re-created to suit the operations of that sector and serve the people. To achieve real improvement in a sector involves getting involved in the detail of those sectors, to find out exactly what change needs to happen. Also something for Ron Paul and Michael Moore to learn, instead trying to dismantle or vilify the entire system.

2. Crude Oil Trader says:
   November 1st, 2009 at 5:50 am

   I still can’t believe we are even giving Michael Moore a “venue” in this country. Sure, we need to respond to his movie, but for Larry King and the likes to give him some much time is kind of self defeating.

   Great post!

3. rob dee says:
   November 4th, 2009 at 8:46 pm

   paul sandison, ron paul is from texas not california.
   you evidently don’t understand the difference between laws and regulations. the law is that you shall not exceed the speed limit. regulations are the speed humps which supposedly stop you from doing so. paul is pro the law but against govt regulation (speed humps). this is a marked departure from the anarchy you seem to associate with him.

   paul is a libertarian or classical liberal. he believes in the power of market participants to do the regulating. i agree with him. i his world there is no illusion of safety like that which exists in the west today. believe me it is only an illusion! just go and ask people who invested with maddoff and thought that the sec had their backs. go and ask the millions of patients who end up suing regardless of medical regulation.

   i don’t even think there is any point in going on past this point because you clearly don’t understand the issues

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