Vox blames capitalism for yet another ’problem‘

March 24, 2022

By Tim Worstall

Just because something is wrong in the economy doesn’t mean capitalism is at fault.

The importance of this is that abolishing capitalism won’t get rid of the thing you don’t like. This is what Vox forgets here in a piece headlined “Car dealers are charging buyers more because that’s capitalism, baby.”

Sure, there’s a shortage of new cars because of the semiconductor chip problems. So, new cars often are going for more than the sticker price. But that’s not capitalism.

“But it’s hard not to recognize that in some corners, businesses and CEOs and salespeople are likely looking at the current economic landscape and thinking, ‘Eh, why not bump that price tag up a little more?’ And who can blame them? That’s capitalism,” the article says.

No, it isn’t. That’s markets, that’s prices changing to balance supply and demand. This is important: It’s not just us indulging our love of picking at details.

Capitalism is about who owns – who owns the factories, the machines and the organizations. The capitalists, obviously. It’s entirely possible to do this without capitalism – Publix Super Markets is owned by the workers in it and is not capitalist and Publix does just fine. Prices moving according to supply and demand is nothing to do with who owns stuff at all. It’s just a natural feature of a world that has humans in it. There’s more stuff around, it’s cheaper, less and more expensive.

The importance of this is that we can’t use the output of a market to insist that capitalism is bad. Nor can we go on to argue that by abolishing capitalism we’ll get rid of the things we don’t like about markets. They’re simply entirely different things. Here, if GM was owned by the government, or the workers, or even the unions, it would still be true that right now GM cars would be selling for more than list price. It’s just not capitalism that’s the problem here.

Vox touts itself as “explaining the news” and gains some 28 million visits a month from doing so. There’s also a substantial video operation within the organization. It might well help if Vox itself understood the news it was trying to explain.

In the Soviet Union new cars sold, on the private market, for more than their official price. Not too much of a surprise given that there could be a 7 year (yes, year) waiting list for a new car at the official price. But that must be markets operating, for one thing the Soviet Union definitely wasn’t was capitalist.


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