In Defense of Capitalism

I should never have to write an article with this title.  As far as I’m concerned, the burden of proof is on anyone who wants to change our economic system to show that their proposed system is better.  To date, none of the modern critics of capitalism have done that.  Marxism/Leninism/Maoism and Socialism writ large have utterly failed at what they purport to desire: the establishment of a system which is “fair” by equalizing outcomes.  (Of course, that is by itself inherently unfair, but that never seems to bother the leftists…)

As I’ve pointed out in other articles, Capitalism has brought freedom and liberty to more people than any other economic system.  Conversely, Socialism, Communism, Fascism, and all of the other variants that have been tried at various times and in various countries have invariably led to tyranny, oppression, and often genocide.  Consider Albania, the Soviet Union, Cambodia, the Eastern Bloc, the People’s Republic of China, and many others.  Those societies that have adopted a capitalist system have, by and large, not experienced tyranny or oppression.  Milton Friedman pointed out that Capitalism has also liberated people from grinding poverty, which Socialism and other leftist models have signally failed to do:  “Great achievements in human history come from individuals pursuing their separate interests.  The only cases in which the masses have escaped from grinding poverty…in recorded history…are where they have had capitalism and largely free trade.  And if you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that.”

Capitalism implies the existence of certain rights, including the right to make decisions, the right to private property, and the right to exchange your property with another person.  In short, we call this freedom.  Non-capitalist systems invariably limit or do away with these rights—that is, they take freedom away.

Capitalism also implies a moral code.  There are legal, moral, and regulatory limits to the ways in which people can exchange property.  Non-capitalist systems almost invariably do away with a moral code, which causes amoral or immoral consequences.  In the Soviet Union, for example, the express lack of a moral code in society was the proximate cause of behaviors that would, in any other society, be unthinkable.  Stalin’s purges, the reign of terror, the gulag, and the many violent crimes of the October Revolution were all examples of the amorality of the Socialist system.  To quote from Dr. Robert Nash in the Free Republic: “Capitalism should be viewed as a system of voluntary relationships within a framework of laws that protect people’s rights against force, fraud, theft, and violations of contracts. “Thou shalt not steal” and “Thou shalt not lie” are part of the underlying moral constraints of the system. After all, economic exchanges can hardly be voluntary if one participant is coerced, deceived, defrauded, or robbed.”

One of the biggest failures of leftist economic models is their tendency to view resources as a “zero-sum game.”  Milton Friedman talked about this phenomenon too:  “There’s a terrible tendency, and most economic fallacies derive from that tendency, to think of everything as what the game theorists have come to call a “Zero Sum Game”.  To think there’s a fixed cost and if I get more you must get less.  If somebody was able to make a fortune for himself, he must have done it by grinding under his heel the poor people.  Because the pie is fixed and he takes a bigger part.  The great insight behind the free market, the great insight of Adam Smith’s great book “The Wealth of Nations”, was that it is not a zero sum game–that it is possible for both people to afford to a transaction to benefit.  And that this insight can be used to organize people’s activities over a very wide area.”

I would go a step further.  To the critics of Capitalism that have currently besieged New York and other cities around the nation, I would answer:  What hurts people around the world is NOT an unequal distribution of wealth, but an unequal distribution of Capitalism.  If we were to bring a Capitalist system to those countries that are poorest, you would, in time, see people become free, self-reliant, and ultimately relieved from the grinding poverty that they currently endure.

The thugs occupying Wall Street (and elsewhere) offer only tyranny and oppression.

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