Pretend capitalism

www.americanthinker.com

What is a pretend economy? A pretend economy is socialism with the features and characteristics of capitalism. Meaning, it looks like it and feels like it, but it’s not the real thing. History has already shown that socialism is unable to calculate or allocate resources in a marketplace composed of real, flesh-and-blood people. Although it has appeal to the younger generation, it may not be as bad as a pretend economy; however, unlike socialism, there are prices, customers, buyers, and sellers, but only in name. Prices and all the characteristics of the marketplace should be meaningful and give signals to affect everyone’s decision-making. If the character of the market becomes an illusion rather than a reality, it might be worse or just as faulty as a socialist economy. Why? A pretend market economy -- the imagined supply and demand, is not the reality. The imaginary, pretend economy: prices rise, there are no competitive pressures, private property is lost, entrepreneurs die off, there is no scarcity, and customers are no longer steering the economy. Knowing this is better than pretending.

There are people today who have positive sentiments toward socialism; for example, a recent article, "What Americans think about socialism and capitalism," based on a new Gallup poll, says that 66% of Democratic Americans feel positively about socialism. But here is the rub: the article states that “Democrats under the age of 50 are much less likely to view capitalism favorably.”

The reality is that socialism is not an economic system; it is political, and has no market signals to guide consumption or the use of private property. In a capitalist economy, the usual villains are to blame. Still, as we know, it is the reverse -- it is when there is an illusion of a real economic market that confuses and misguides individual objectives, so then a pretend market seems plausible. Socialist thinking is letting us take out the bad parts and put in the good -- issue solved, right? Hardly.

Let’s be honest: there are no incentives at all under socialism, or, in the worst case, human disutility of labor kicks in full force, meaning humans are not motivated to labor when there are no incentives. In other words, no one wants to work. In addition, private businesses receive the wrong signals or are misguided when they see a supposed market opportunity, only to find that all is a mere market illusion.

The debate over which is better -- capitalism or socialism has become convoluted, being that it is difficult to discern a real market from a pretend one. Instead, an honest debate must focus on what capitalism is and what socialism is not. Socialists love the pretend capitalist economy because it is seen as a benefit of one system but attribute it to another economic system. They say, I love capitalism… But! What’s the but? Again, socialists want to take out the bad and put into socialism the good aspects of capitalism, but they still hate capitalism.

Here’s for disillusionment. If you ask, why is the pretend economy even more devastating than socialism? Pretend capitalism muddies marketplace data that helps us make decisions -- instead of guiding, it misguides but seems very real. To me, the pretend economy is like looking through a vehicle's rear-view mirrors -- things are closer than they appear, yet at a perpetual distance. Unfortunately, there is no economic system that works for everyone or makes things equitable for everybody. Still, the pretend economies do more harm than good if we rely on facts and data to make decisions in the marketplace. We make decisions about our private property, money, and future; likewise as consumers we expect competitive pressures will protect consumption, but a pretend economy it becomes apparent that production costs are confused with prices, over supply and under demand – over demand and under supply -- or even worse, diminishing returns in the misallocation of products/services and human capital, these inefficiencies are very apparent in a pretend economy.

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