It is universally accepted that economics is a complicated subject. Even the brightest of minds admit they are not sure what makes the economy tick. People have dedicated their entire lives to studying economics and mankinds understanding of it is still very much limited. One running theme is that an economists is the only other profession besides weatherman that can be wrong 100 percent of the time and still keep their job. Just as nobody can accurately predict the weather all the time, nobody can predict the economy all the time. So why would people assume a lone film-maker could sum it up any better?

Michael Moore is no stranger to economics. For years he's spoken on the ills of capitalism. His latest film "Capitalism: A Love Story" is a breakdown of everything he feels is wrong with capitalism. He paints it as the greatest evil and the source of all social ills in society. He does this, of course, with a very rudimentary (and flawed) understanding of what capitalism is. Yet what he documents is not pure propaganda nor is it a portrait of everyone like him. Moore, like most people of his trade, sincerely believes what he says. He just doesn't understand certain parts of the issue that very few understand to begin with.

What's Micahel Moore Talking About?

The most glaring flaw is the way he highlights certain ills and attributes them to capitalism. In his movie he talks about greedy banks using public money for obscene profits and the growing hardships small businesses face when they try to compete with larger corporate entities. But what he fails to understand is that these events are not driven by capitalism. They are driven by collaborations between government and business. If he had talked to anybody with some background in capitalism, he would know that the reason these big entites like oil companies, drug companies, and banks make such extreme profits is because they get the government to help them out. They use laws, regulations, and various red tape to stamp out competition, protect profits, and socialize losses. That's why they invest so much money in lobbyists. It helps them make more money.

This isn't a failure of capitalism. It's a failure of limited government. The constitution of the United States never stipulated that the government should aid in any business. Businesses, like individuals, were all subject to the same laws. It's when the government gets corrupted by businessmen that these ills develop. Going back to the era of Robber Barons like Rockefeller and Carnegie, they used tactics to weed out competition that were without question illegal. But they got help from the government, allowing them to get special breaks instead of using their own merits to succeed. This is how near-monopolies developed in many industries. It wasn't capitalism, but a perversion of it caused by an intrusive government.

Moore also documents the struggles of the middle class in his film. He blames capitalism for their declining standard of living and makes the case that the government should do more to help them. But what he fails to understand is that government is the reason for the declining middle class in the first place. The most notable cause involves inflation of priceses and the decreased purchasing power of the dollar. That's not because of capitalism. That's because of big government, namely the Federal Reserve. Since 1913 they have been printing money without anything to back it up. That's what causes the inflation and that's what robs people of their purchasing power. It's been documented in history going all the way back to ancient Egypt. Yet Moore doesn't get this and to his credit, very few people do.

The most telling shortcoming of Moore's film is his solution to the problem. He says democracy is the antidote to all these ills. Again, he's confusing his terms. Democracy has nothing to do with government. It has everything to do with politics. The very word democracy means people rule. It is a system that has never succeeded and for good reason. When the people have the power to vote on the excise of power, that vote is subject to majority rule. So if the majority want to oppress a minority, there's nothing stopping them. If the majority want to surrender all authority to a dictator, there's nothing stopping them. That's why the Founding Fathers scolded democracy. America as a whole has never been a democracy. It is and always has been a constitutional republic.

A republic is rule by law where a fixed body of laws is enforced by a government whose power is limited. This means that issues of business and personal conduct are free for the people to enjoy. No one business should be granted any favors. All should be free to prosper and free to fail. That is the essence of a republic. Moore doesn't get that. He doesn't understand that government has been granting special favors to entities like banks, utilities, and various enterprises for years and that is what has perverted the system. It's when government steps back and let business stand on it's own two feet that true prosperity is possible. It seems counter-intuitive to some, but historically speaking it is the best system for governing man.

In terms of the big picture, not everything in Michael Moore's movie is to be scoffed at. He's not wrong on everything just as he's not right on everything. He does highlight some important shortcomings of the current system. He simply fails to understand the philosophy and history of that system. Most people do not get economics, but they do get freedom. That is why the most powerful message in any argument for these issues is freedom because when people are free, people are free to prosper.