Wednesday, February 27, 2013
The Moral Case for Capitalism
What follows is my Op-Ed in today's Orlando Sentinel
Yesterday, George Via walked Orlando Sentinel readers through the well-worn argument that capitalism is inherently based on greed, avarice, moral debauchery and a wanton disregard for the sanctity of our environment.
In the more than two decades that I have worked in the profession of economics education, I have observed firsthand that the greatest source of economic illiteracy in our nation centers on the question of what capitalism is, what it stands for, and what it creates.
Unfortunately, popular fallacies abound - fallacies that have become part of a political doctrine and social doctrine that casts a greater threat to human progress and happiness than society can possibly imagine.
First, there is the fallacy that capitalism is based on greed. Greed, by its very definition, gives us a society where people implicitly work to take maximum advantage of one another. If businesses operated on this principle, customers would be routinely cheated, workers would have no protection of their natural rights and society would be worse off as a result of a quasi-forced redistribution of wealth and money to the powerful few.
Yes, there are examples of businesses who do all of these things. Some companies do lie, cheat, treat workers badly and lobby government for favors that robs all of us who pay taxes.
But look around you and notice how often you interact with some profit-seeking stranger who sells you a good or service that works well for a price you mutually agreed to. Think about how often those who principally exist in society for the purpose of making money offer up wages and salaries that we agree to – and that help us take care of our needs and those of our families. How many jobs are offered up at higher pay than we earn now with the implicit offer that if we increase our skills, education and training we can earn more next year and the year after that?
How many ‘evil’ corporations are out there producing the newest energy saving, environmentally-friendly products? What about the new medicines, healthy foods, car safety features, home-security devices and other products and services that save or prolong our lives?
How many of us know that in our somewhat capitalistic society, Americans give around $300 billion per year to charity – a figure that is more than the entire GDP of most countries in the world?
Contrast this with nations where capitalism is shunned.
In many countries if you are born poor, you will die poor. India, for example, has a brutal caste system that forces 400 million people into the worst jobs imaginable – and permanent poverty – as a result of their social standing from birth.
In Africa, leaders of many of this resource-rich continent keep their people impoverished by denying any right to private property. People know that if they want to start a small business to climb out of poverty they might have to bribe countless corrupt government officials and can be bulldozed for any reason.
All over Europe, South America and parts of Asia, central-planning by government officials is relied upon to provide food, clothing and shelter that people need. In those nations, people go without adequate food, clothing and shelter while disease and suffering are common.
Capitalism is a miraculous system of what you might call “organized chaos”. Every day millions of people – most of whom are strangers to us – get up, go to work and pursue their self-interest in innumerable industries and occupations. This pursuit of our own agenda leads us to work with one another to provide our small part in the production of everything we call a want or a need.
Furthermore, we work, largely secure in the knowledge that our rights to property – our income, homes and other resources – are secure and cannot be taken by force.
With these two pillars – the right to peacefully pursue or self-interest and the right to property – we have the foundation for what capitalism really is. That is a system that has lifted more people out of horrid suffering than any artificial system any government has ever created.
This does not mean that capitalism is perfect. It does mean that relatively speaking, Mr. Via – and all of us, should be grateful he lives in a time and place where capitalism has been allowed to exist.