The Washington PostDemocracy Dies in Darkness

Opinion Capitalism still needs to play by the rules

Then- U.S. Ambassador to the United Nations Nikki Haley in Washington on Oct. 20, 2017.
Then- U.S. Ambassador to the United Nations Nikki Haley in Washington on Oct. 20, 2017. (Jabin Botsford/The Washington Post)
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George F. Will, in his March 8 op-ed, “Nikki Haley picks a worthy fight,” an adulation of former U.S. ambassador and South Carolina governor Nikki Haley’s defense of unhyphenated capitalism, overlooked how the rules within which free markets function are not themselves established by market forces. Rather, such rules of the game, without which capitalism cannot function effectively or fairly, must be established and enforced collectively by law or custom. There is no freedom in anarchy. Look no further than building-code regulations that help protect from unscrupulous contractors the value of the most important capital investment that most of us make, namely, our homes. Unbridled and unregulated capitalism is generally a race to the bottom in which sweatshops would end up producing most of the clothing we wear.

Enforceable rules protecting the value of paper assets such as stocks and bonds are particularly important in capitalist systems in which individual decisions to accumulate such wealth are distinct from corporate decisions to invest in the physical means of production. Such intertemporal decisions are inherently risky (paying cash today for benefits sometime in the future). Have we already forgotten perhaps the most important lesson of the Great Recession — that of having a lender of last resort (namely, the Federal Reserve) to underpin our capitalist financial system?

Chris Gerrard, Rockville

I gather from George F. Will’s op-ed that former U.N. ambassador and South Carolina governor Nikki Haley subscribes to pure, unadulterated capitalism (as does Mr. Will, I suspect). 

Mr. Will wrote: “The $20 billion in new capital investment she attracted to South Carolina as governor included five international tire companies and Mercedes, Volvo and BMW plants. The world’s largest BMW plant is one reason South Carolina builds more cars for export than any other state.”

So, Mr. Will, how many mega-millions did South Carolina and its local jurisdictions give in tax breaks to these automotive companies to entice them to locate their plants there? This is not my idea of pure American capitalism. Rather, I consider it to be a form of socialistic capitalism. 

Val Kehl, Manassas

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