In Defense of Anti-Capitalism

Dice and I got into it over on Dave's blog. He shut the thread down, presumably because tempers were flaring. That's fine, his blog. I've calmed down a bit, but I'm still convinced that Dice is wrong. I'll explain why in two posts. This post shows the particular things that Dice gets wrong, the next post will show why anti-anti-capitalism is misguided in general.

This is all in the context of "Buy Nothing Day," something I know very little about. I believe it involves setting aside a day on which no shopping is to be done. Dice makes several misstatements of economic theory. Dice in bold, me in regular type:

Barriers to trade are inefficient and lead to lower wealth for everyone. Flatly untrue, as Dice later acknowledged.

And what’s wrong with buying stuff? It’s only bad if you can’t afford it. It's easy to think of reasons that buying stuff might be bad, beyond affordability. Dice defends his statement by arguing that activists aren't concerned with externalities, they just don't like consumerism. This ignores that anti-consumerism is surely motivated in part by things like externalities (this seems to be at the root of anti-SUV sentiment, for instance). Unless affordability is read so broadly as to make the statement tautological, it also ignores all sorts of bad decisions consumers can make (Dave has posted about this). One example of what I mean is that ~24 million Americans own HDTVs. ~12 million don't actually watch HDTV on them, and ~6 million think they're watching HDTV when in fact they're watching regular TV. This doesn't prove that they're making bad decisions (it's nearly impossible to do so, given that we don't have access to people's preferences), but something seems to be going wrong.

if people bought fewer things in aggregate, that would lower demand and slow down the economy. The companies that borrow from banks have to sell things to somebody. This is untrue so long as the central bank can adjust interest rates. It's a common misunderstanding, but it's definitely wrong. Dice defends the statement by arguing that the goal of "Buy Nothing Day" is to reduce consumption to the point that we all live like monks. I dispute this. Moreover, if this were their goal, then surely they wouldn't care about GDP growth. It's like telling the Amish that they're wrong because their beliefs would entail giving up text messaging.

My guess is that the [anti-capitalist] ideology is driven by a) ignorance of economics This is almost certainly wrong - the best critiques of capitalism have come from within economics - but I flag it more for its irony.