Sunday, July 19, 2015


Oy, veh.  This is one of those posts that's going to be like a chore. The thing is that I was recently "called out" by name to explain how this is not basically true:

The request came from someone I personally like, and I'm responding here to preserve at least some of his anonymity. Here in Ruminations, I am the only one who is a personal target, unless someone chooses to respond without anonymity (see Ground Rules). Also, he didn't write the above [1], so he's not responsible for its misinformation.

So... first, there are some factual things to get out of the way before the meat of the discussion, and I guess we'll do it by panel and by the overarching caption:
  1. It's "rare earth metals", not "raw earth". Ninety percent (90%) of the world's production is in China, not Africa. A great deal is in the United States. Since this graphic specifically targets the iPhone, let's look at those sources [link to CNet]. Note the differences in practices between Communist China and Molycorp in the US.
  2. Energy from the Middle East is acquired through cash. How do you think the Saudis got rich? The countries at which we are at war have comparatively miniscule oil deposits. Only about 13% of the total oil used by the US comes from anywhere in the Middle East. We get more than that from Canada or Latin America individually; and produce the plurality of it ourselves [link to NPR].
  3. The term "sweatshop labor" is somewhat debatable [2], but when the labor is forced it is the product of authoritarianism, which does not describe a free market economy. Here, once again, we're talking about China. Perhaps the meme writer is virulently opposed to communism? If so, I'm with him. I'll discuss below how this ties to the US economy. By the way, the suicide rate among Foxconn employees is lower than that of the general population [link to Wikipedia].
  4. The phone is designed to work. It's made of glass because it depends on capacitive touchscreen technology and to make it easier to clean and more scratch- and light-resistant than plastic. In Liberal-speak, "Because SCIENCE" [link to Wikipedia]. It's therefore fragile, though the designers do their best to make it as rugged as the physics allow. "Gorilla glass" is tempered, but there will always be some idiot who purchases a phone made of glass and then drops it on concrete or puts it in his back pocket. The failure isn't with the design of the product, but that it's used outside of its design parameters. Why does it break? Because it's designed for smart, careful people and stupid careless ones buy it.
  5. "The efficiency..." The graphic invokes scant criticism of capitalism except to those who use sloganeering as a substitute for facts; and quite a lot of criticism of the communist and totalitarian practices pictured in three of the four panels. The use of the word "efficiency" is curious; it evokes logical non-sequiturs such as this gem from Carlos Blanco: "Capitalism consecrates efficiency as the highest form of life [3]. Basically... no. Even if this were a tenet of capitalism you'd have to explain the obsession with it in the Soviet five-year plans. But it's not, as we'll discuss below.  
Basically, every single panel AND the caption all have factual problems. As a result, it's so fucked-up bat-shit stupid that it's "not even wrong".

Now, I'm not going to spend a shit-ton of time on this because it's just not that difficult, and because I've discussed a lot of the core of it before when discussing the previous fact-challenged "Occupy" movement.

Capitalism is about the freedom to trade your goods and services, whatever they might be, however they may be produced, with customers who pay in capital... money... tokens of value. Capitalism as an economic system makes no demands on the efficiency of production or anything else. In fact, there is no economy on Earth that is not capitalist, China included. They all use capital; every single one. Rather, what we mean when we say "capitalism" is "free market capitalism", of which there is precious little as well.

As an example... contrary to the captioned claim, "efficiency" isn't the overriding goal of Capitalism. There are plenty of companies, run by capitalists all, that are run on social, charitable -- or even moral -- principles [4]. A good many of these are privately held simply because the misinterpretation of capitalism has led to the passage of fucked-up laws that penalize corporations for acting in any fashion that does not put profit first unless it is specifically structured to be non-profit or not-for-profit. The board of a corporation can be sued for failure to put profit over principle... that is, a failure to discharge their fiduciary duty to the shareholders. This is measured solely in dollars by the courts.

These laws were put in place (ironically) to prevent abuse. Instead, what happens is that the legal interference in the free market forces a corporation to maximize profit and thus discharge their legal obligation. Labor is then exported to where it is cheapest, and the capitol trickles out of the economy into that of another nation, such as China. China has no incentive to pass the capital to the workers (it is the low cost of labor that got them the capital in the first place), and it is the central (nominally communist) government that reaps the reward. The capital doesn't get spent back in the US economy because we are dealing with a market that is less free, and those who caused the rupture then gasp at the "failure" that they themselves created.

This isn't a failure of capitalism, it's a failure to understand it. This isn't unusual. Most liberals and conservatives alike are unaware that capitalism is not inherently tied to a form of government, even when they otherwise understand economics. Voting a socialist into office will not rid you of capitalism; neither will voting in a despot. Wikipedia's Free Market entry has a nice summary of free market capitalism under various systems, but you should follow the references to the source (which, if you're the person for whom this post is written... you won't).

Free markets work so long as everyone in it is fully engaged in the free market. It's why we outlaw most monopolies. But our legislators have gone beyond that reasonable protection of a free market to bi-partisan regulatory stupidity that raised the operating costs of maintaining a publicly-held company, discouraged registration on the stock exchanges, and required the quest for "efficiency" that this fact-challenged graphic presumes of "capitalism".

As for this graphic, those things that it decries are the products of non-free market conditions of the very sort resulting from the policies of interventionist populists who promise the world because they think you're dumb enough to believe they'll deliver, even as the Chinese system continues to be abusive and the Soviet system failed entirely through isolationism.

So no... it is NOT "basically true".

[1] It possibly originated at

[2] How can "sweatshop labor" be a debatable term? Well, freely chosen as an alternative to other employment working in rice paddies or cane fields, it is certainly a step up, and represents the meeting of the skills you have to offer with the employment available. Even in the US it's so commonly done voluntarily that we have a term for it: "workaholic". When forced, it is certainly deplorable; and in worst cases it's barely a step removed from slavery. In Korea, at least during my parents' last visit, roadside grass was cut by hand, even though machines could do it. This isn't to exploit the people... rather, it is explicitly so that people can take what they reap home and feed their livestock. The argument against hard labor and/or long hours across the board is a culturally insensitive one made from a position of First World privilege

[3] Blanco, Carlos: Philosophy and Salvation: An Essay on Wisdom, Beauty, and Love as the Goal of Life, p. 150.

[4] As an example, Chick-fil-A is privately held and does not open on Sunday, unlike all publicly held corporations in the same economic niche. It is closed on Sunday because the founder felt, "I was not so committed to financial success that I was willing to abandon my principles and priorities. One of the most visible examples of this is our decision to close on Sunday. Our decision to close on Sunday was our way of honoring God and of directing our attention to things that mattered more than our business." And yet... capitalist.

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