The Need to Embrace Capitalism
John B. Taylor, a Senior Fellow in Economics at the Hoover Institution and Professor of Economics at Stanford University, states the following in his 2012 article, “Getting Back on Track” -
“At their most basic level, these principles [of economic freedom upon which the country was founded] are that families, individuals, and entrepreneurs must be free to decide what to produce, what to consume, what to buy and sell, and how to help others.”
Which leads me to a brief discussion on Capitalism vs. Socialism. How do you feel about these two? I do hope that if you are void of feelings about these two economic terms, you will at least read about the sufferings experienced by the people living in a once prosperous country called Venezuela or the horrors of socialism in Nicaragua or Cambodia.
Let’s look at how Merriam-Webster dictionary defines these two opposites:
Capitalism is an economic system characterized by private or corporate ownership of capital goods, by investments, that are determined by private decision rather than by state control, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
Socialism is any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.
After reading these definitions, which sounds more appealing? There’s an obvious difference between the two. One advocates the private sector while the other embraces government. Well, astonishingly or disappointing perhaps, a study showed that socialism receives higher marks by millennials. They would be wise to learn about socialism from those that have personally experienced the freedom-stifling way of living in other countries. The Objective Standard, in its 2016-2017 Winter edition, published an interesting interview with C. Bradley Thompson on this topic. Dr. Thompson is a professor of political science at Clemson University and executive director of the Clemson Institute for the Study of Capitalism (CISC). In this article, “Making Capitalism a Known Ideal,” he discusses capitalism and the need to combine the teaching of economics with a greater emphasis on the “nature and value of liberty.” I couldn’t agree more. The lack of such emphasis Thompson lays at the feet of universities’ humanities and liberal arts departments where the teaching doesn’t always cast a positive light on free markets. Hence, the millennials’ view of capitalism.
Harry Dent discusses free-market capitalism and democracy in his book, The Demographic Cliff. In Chapter 2, he points out the historical and “unprecedented expansion in the standard of living” as a result of the coming together of free-market capitalism and democracy. Is this relationship discussed in the classroom, whether it be in a high school or university? I fear it is not, in most cases. With free-market capitalism comes innovation. In many instances, with innovation comes production. With production comes jobs. When government intervenes with higher taxes, regulations, and stimulus - otherwise known as socialism - innovation is stifled, which impacts production and jobs.
As Dent reminds us, you don't get something for nothing. Thomas J. DiLorenzo, in his book Hamilton’s Curse, discusses the ongoing battle that Thomas Jefferson and Alexander Hamilton had regarding the role of government in the lives of Americans. Hamilton was a proponent of government intervention, unlike Jefferson who believed in government having a minimal role. Jefferson was in Adam Smith’s corner. Smith, the author of The Wealth of Nations, was a proponent of laissez-faire capitalism, providing studies that showed government intervention was stifling to industry. He believed government had a limited role and should maintain a free market economy.
Senator Rand Paul tersely states in his book, The Case Against Socialism, “The history of the past two to three hundred years in countries with market economies has seen the remarkable elimination of extreme poverty and an increase in income inequality.” He goes on to point out that “instead of inequality being a problem, the data shows that poverty declines as income disparity grows.” We’ve seen evidence of it over the past several decades that when government intercedes or becomes the arbitrator, the plaintiffs get an outcome that is based on “party politics, nepotism, and cronyism.” (Note: A book review on Senator Paul’s book will be posted soon at The Outtop.)
Dr. Thompson was asked in the interview as to how long he thought it would be before capitalism was made a known moral ideal. He stated that the liberty movement must be willing to “pivot and redirect its energies and resources to……the humanities and liberal arts departments in the universities.” He’s not going to quit trying.