In defense of capitalism

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
Winston Churchill

The Joe Moneybags Gazette:

Mitt Romney’s résumé at Bain should be a slam dunk. He has been a successful capitalist, and capitalism is the best thing that has ever happened to the material condition of the human race. From the dawn of history until the 18th century, every society in the world was impoverished, with only the thinnest film of wealth on top. Then came capitalism and the Industrial Revolution. Everywhere that capitalism subsequently took hold, national wealth began to increase and poverty began to fall. Everywhere that capitalism didn’t take hold, people remained impoverished. Everywhere that capitalism has been rejected since then, poverty has increased.

Capitalism has lifted the world out of poverty because it gives people a chance to get rich by creating value and reaping the rewards. Who better to be president of the greatest of all capitalist nations than a man who got rich by being a brilliant capitalist?

I majored in history and did my senior thesis on the Mussel Slough tragedy and the Southern Pacific Railroad. Once upon a time railroads were less popular than Wall Street bankers are today. The Southern Pacific was the inspiration for The Octopus:

The Octopus was the literary apotheosis of the power, ruthlessness, and efficiency of the modern corporation. The novel leaped from the mechanical power of the locomotive to the soulless power of the corporation:

. . . the galloping monster, the terror of steel and steam, with its single eye, Cyclopean, red shooting from horizon to horizon . . . symbol of a vast power, huge, terrible, flinging the echo of its thunder over all the reaches of the valley, leaving blood and destruction in its path; the leviathan, with tentacles of steel clutching into the soil, the soulless Force, the iron-hearted Power, the monster, the Colossus, the Octopus.

Norris modeled the railroad’s president Shelgrim after Collis P. Huntington. Shelgrim was “a giant,” a man with “an ogre’s vitality,” who had “sucked the life-blood from an entire people.”

I started my research expecting to find proof of the evils of capitalism. What I found was somewhat different from my preconceptions.

If you look at a map of California’s Central Valley you will see that virtually all the cities are in a straight line from Stockton to Bakersfield, connected by State Highway 99. If you look closely you will see railroad tracks running parallel to the highway the entire 250 mile distance between those two points.

That’s the original Southern Pacific line. In exchange for building the railroad line the federal government gave the railroad half the land within ten miles of either side of the tracks. At that time the land was mostly unsettled.

As soon as the proposed route was surveyed people began settling on the land. The first parcels to go were the even-numbered sections which could be homesteaded for free. Then people began settling on the odd-numbered sections which were going to be awarded to the railroad.

The railroad intended to sell those parcels once the line was completed and they received title from the government. They advertised the land for sale, inviting people to move in immediately and buy later. The ads offered the land at “$2.50 per acre and upwards.”

When the railway line was completed several years later the railroad notified the occupants of the odd-numbered sections that the actual sale prices would substantially more than $2.50 an acre because the market value of the land had increased. The railroad now wanted as much as $35 per acre. A long legal battle followed by a big gunfight ensued. The settlers lost both.

Most accounts of the story tend to leave out three important details:

1. Without the railroad the land was virtually worthless.

2. There were people willing to pay the railroad the asking price for the land.

3. Many of the so-called settlers were land speculators.

Two of the seven men killed at the gunfight on Brewer’s farm were prospective buyers. Henry Brewer (who was squatting on the land where the gunfight took place) was a speculator who already occupied one of the even-numbered parcels. So were many other members of the “Settler’s League.”

The speculators plan was to occupy the land and then buy it at $2.50 an acre, then turn around and sell it for its fair market value. Easy money, right? But the Southern Pacific didn’t want to play along. Why should they let someone else make all that money?

Farming in California has always been different from the “40 acres and a mule” small farming that was more common back east. In California farming was “agribusiness.” The wheat that was grown in the Central Valley in the 1880’s went by rail to Stockton and by ship to Europe.

From Hanford (near where the gunfight took place) to Stockton was a railroad ride of a few hours. Without the railroad the wheat would have to be hauled by wagon to Stockton, a two-week round trip. Without the railroad farming in the Central Valley was not economically feasible. Without farming the railroad would have no customers.

Despite their reputation of charging “all the market can bear” the Southern Pacific had no interest in putting farmers out of business. They needed each other. If you study the growth and development of California you will realize that the railroads did not prevent prosperity.

This brings me back to my original point. I have to laugh at those mental midgets in the Occupy movement waving signs that say “Down with Capitalism.” Their sheltered lives were made possible by capitalism.

This is not to say that capitalism is perfect. It’s not, but neither is democracy. There are things we can and should do to ameliorate the worst effects of capitalism. But we shouldn’t talk about killing the goose that lays the golden eggs.

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28 Responses to In defense of capitalism

  1. driguana says:

    Love the pic of hypocrite Moore. Interesting that so many of the so-called 1% who rail against capitalism seem to be entertainers and sports figures. How did they make their money? If there are any industries today that are the epitome of capitalism, they are entertainment and sports! What makes them so delusional to think that they are somehow not capitalists? Puzzling?

  2. myiq2xu says:

    If the ending to this post seems kinda truncated it’s because it is.

    Sometimes you have more to say but you run out of time to say it. If you wait until you’ve said everything the post is 3 times longer and it’s Wednesday.

  3. yttik says:

    The Rez is a good example of capitalism/socialism. Forcing Native Americans onto land and putting the Gov in charge of doling them out resources has created some of the worst poverty this country has ever seen. The way some tribes are solving this is with big old capitalistic casinos.

  4. DeniseVB says:

    Steven Crowder does Mikey Moore, circa 2009:

  5. DandyTiger says:

    Funny how there’s often more to the story. And look now, progs want the railroad to be the salvation (mass transit) where the car is evil. So hard to keep up.

  6. yttik says:

    It makes me angry when wealthy people want to destroy capitalism because some of us grew up with a form of socialism. It’s called a ghetto. The Gov provides your housing, your food, your medical, and it really sucks. You’re trapped in poverty, your dreams die, and violence becomes rampant.

    Anybody who thinks socialism is a better system is free to go live it right here in America. You really don’t see a whole lot of poor people advocating for socialism, because most of them are doing everything they can to escape it.

  7. DeniseVB says:

    OT: iowahawk’s picking on Olbermann, KO responds ….

  8. yttik says:

    Oh sheesh! Speaking of capitalism and how to kill it, Washington state is facing a budget crunch and needs to increase labor and industry tax by 28%. Our business already pays the mandatory employment tax at a rate of 4.71 per person, per hour. We’re nearly taped out as it is, an increase of 28% would finish us off.

  9. myiq2xu says:


    Energy was a particular obsession of the president-elect’s, and therefore a particular source of frustration. Week after week, [White House economic adviser Christina] Romer would march in with an estimate of the jobs all the investments in clean energy would produce; week after week, Obama would send her back to check the numbers. “I don’t get it,” he’d say. “We make these large-scale investments in infrastructure. What do you mean, there are no jobs?” But the numbers rarely budged.

  10. PiperMN says:

    Good thread. BTW – what would all these entertainers and sport people do for money if everyday people were so poor that they couldn’t afford to buy tickets, CDs, videos etc.. Remember these ‘entertainers’ have huge appetites (also egos) which require a continual source of moolah.

    • elliesmom says:

      When I was growing up, families packed up and left for California to find their fortunes. My uncle, who would be in his 90’s if were still with us, was stationed out there post WWII and never cam back except for brief visits. VDH paints a very different picture of California today.

  11. If Moore et al think socialism is so wonderful and capitalism is SOOO EEEEVVVIIILLLLL- I invite them all to leave this country at their earliest convenience. I am sure there is a socialist country somewhere on the planet that would be more than happy to take them AND THEIR MONEY.
    They love them their I-gadgets. Vehicles. Income per year more than I will make in my entire lifetime. Their jets. Bling.
    And most of all they love their electronic devices that allow them to tape themselves on the talking head shows so they can go home and watch themselves over and over while they jerk off.

    • DeniseVB says:

      I know Somalia needs a new government and who better to run it than the millionaire experts about everything, they already have their King and Queen For Life and a court jester (HBO’s BM). 😀

      I like House Hunters International, always looking for that perfect country to flee to, just in case. Then my husband schools me on how some foreign governments work …. yikes.

  12. tommy says:

    O/T. Darth Cheney stated that Sarah Palin was the wrong choice for VP in 2008. Today McCain defended his choice. Atleast Liz Cheney was in Sarahs corner. Didn’t Darth like her visit to Chick-fil-A? Or is he of the opinion that she should be in kitchen making sammiches for Todd? Who knows. And in a totally unrelated incident, Cruz in Texas is on his way to win the primary on Tue. Cruz, being outspent 3-1, never held an elective office, and has zero name recognition. He just happened to be endorsed by Sarah Palin and she campaigned for him. Yep, folks keep underestimating the Cuda.

    • DeniseVB says:

      O/Tinfoil Hat/On: Let’s say Cheney is setting her up for V/P. We’re talking about her again, right? People are still agreeing she’s more qualified than any other of the mentionables, including Obama/Biden. She’s not on the GOP Convention schedule and goodness knows Romney needs her to bring in the Tea $upport/votes.

      Why Cheney even brought her up is a mystery too me …. we all know Sarah brought more votes and excitement to McCain’s crappy campaign, but shouldn’t that be sooooo 2008 ? Maybe the mistake was choosing her too early (she’d be well into her second gov term by now) for the world stage?

      Hmmm? Hmmm? Hmmm? Even AnnR gently suggested she’d love for Mitt to pick a woman 😉 Whereas, I think MO nixed Hillary for V/P because of her(mo’s) insecurities? Or Valerie’s? Hard to keep up with the Obama women.

      I also remember Sarah musing, “…the GOP nomination process is going to have a lot of surprises so keep your powder dry…” in the middle of the primaries.

      Ok, Hat/off 😀

      • votermom says:

        My tinfoil theory goes completely the other way:
        I think Cheney is sabotaging Mitt. Mitt is leading and the GOP base is getting reconciled to him as a standard bearer and suddenly Cheney spouts off something that is sure to alienate the base all over again.
        Why would Cheney want Mitt to lose? Maybe Jeb wants to run in 2016? /hat off

  13. votermom says:

    OT. A real hero

    China’s most incredible mother: Staggering story of the woman who saved 30 abandoned babies after finding them dumped in the street with the trash

    A woman has been hailed a hero after details of her astonishing work with abandoned children has emerged.

    Lou Xiaoying, now 88 and suffering from kidney failure, found and raised more than 30 abandoned Chinese babies from the streets of Jinhua, in the eastern Zhejiang province where she managed to make a living by recycling rubbish.

    She and her late husband Li Zin, who died 17 years ago, kept four of the children and passed the others onto friends and family to start new lives.

    Her youngest son Zhang Qilin – now aged just seven – was found in a dustbin by Lou when she was 82.

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