Imagine an economic system that massively reduces poverty, that generates prosperity so great and so broadly that the vast majority of people consume more calories, live longer and in better health and have vastly more and better jobs and entertainment options than royalty did for countless centuries.
Also, under this economic system, as the people’s wealth and prosperity grows so, too, does the cleanliness and health of the environment, and peace and cooperation among nations. Oh, and it is all based on individuals pursuing happiness as they deem best.
Wouldn't that be amazing, incredible, and desirable? Who wouldn't want that? We have it. It is called capitalism. More than anything else in the entire history of the world, capitalism has been the greatest eliminator of poverty.
This is based on data from the World Bank, and The Economist reported it in June 2013, “Nearly 1 billion people have been taken out of extreme poverty in 20 years. The world should aim to do the same again. Most of the credit, however, must go to capitalism and free trade, for they enable economies to grow — and it was growth, principally, that has eased destitution.”
It has been so successful at this that you no longer hear about a “war on poverty.” Instead, anti-capitalists have shifted their attacks from poverty to inequality. Yet, the structural inequalities they attribute to capitalism are more often due to government regulations that protect politically influential interests from market competition. Capitalism is also a net positive for the environment.
As wealth grows, people’s desire for a cleaner environment grows; capitalism provides the money and technology to achieve that. Today, America produces significantly more products and has much cleaner air and water than fifty years ago. It also has more trees, parks, and protected preserves than it did at the beginning of the 20th century.
Yes, this is due largely to government regulations, but they are regulations that work with the market rather than displace it, because free markets require good government regulation and oversight.
Similarly, capitalism, not government programs, allowed the United States to hit the Kyoto Protocol’s CO2 target reductions early. Capitalism encouraged the development of new technologies to tap cheap and clean natural gas reserves that have displaced more expensive and dirtier energy sources such as coal.
Oh, and alarmists’ dire warnings about “peak oil” have been proven a myth as these new technologies have opened up vast new reserves. The consequence is cleaner energy and less dependence on the volatile Middle East.
As we move into the 21st century our imaginations are captured by what may come. Capitalism has created vast new opportunities and technologies while also vastly reducing poverty and improving the environment. Future opportunities are nearly limitless.
What about capitalism’s negatives? Opponents claim capitalism is the source of slavery, colonialism and individual alienation. In truth, they are wrong about this as well.
Alienation, for example, comes not from work but the lack of work. The alternative to capitalism is socialism, which is famous for killing jobs or making work menial or meaningless.
Socialism has never been sustainable for more than a generation before adopting inhuman methods to sustain itself. Ancient Sparta, a socialist economy, enslaved an entire nation of people to sustain itself. Ancient Carthage, also socialist, sustained itself through colonialism; that is why its most famous general, Hannibal, crossed the Alps with elephants to attack Rome.
From Owensville and Israeli kibbutzim to Orderville (and eleven other cities Brigham Young founded using a different application of the United Order*) one will search history and find many efforts to establish socialism, none of which were sustainable without gross human abuses.
The epitome of socialism is 20th century Marxist societies. While many claim the Soviet Union, China, etc. are not truly Marxist, many philosophers and economists who have studied Marx point out that the horrors in the Soviet Union, China, etc., would also happen were Marxism adopted in advanced industrial economies.
Those horrors include slavery, murder, totalitarian control, economic stagnation, and vast environmental disasters. In one century Marxism was responsible for the death of 100 million people.
These are not people who were at war with the nation -- these are people from within a nation whom their government murdered because political leaders desired faster change. This is the ultimate result of socialism – it creates a gross power inequality that allows a few elites to decide the entire fate of everyone else.
Most problems people attribute to capitalism are really the consequence of human nature. Is capitalism the cause of slavery and colonialism? No, slavery and colonialism are also present in socialist systems. There is no institution or system that is a panacea to the natural man. Political, economic, and other systems may, however, facilitate or impede man’s good and bad natural desires.
Capitalism may unleash some humans’ greed but it also enables our will and creative intelligence to make things better. Capitalism’s foundation is in liberal ideas, the culmination of which is America’s Declaration of Independence.
That document justifies America’s divorce from its mother country, England, and the establishment of a new type of state that serves not itself but its people by providing safety and security and the protection of fundamental liberties so individuals may pursue happiness how they deem best.
The Declaration of Independence and the U.S. Constitution are based on a simple trust in the common sense and moral purposes of the average man and woman, and a simple belief that freeing individuals to pursue happiness as they think best is the best means for creating flourishing societies and fulfilling individual lives.
The American founders who wrote those documents were not so naïve as to believe freedom alone would accomplish those things. One of the first acts of the new U.S. government was the Northwest Ordinance, which gave land to new towns to build a school and church. America’s founders recognized that for people to use their freedom well they would need both education and religion.
That with education and religion individuals could mostly be left to pursue happiness how they deemed best, and the end result would be a better society. These two beliefs, that individuals are the best judges of what is best for them, and that individuals should be treated as ends rather than as means, is the basis of liberalism and the foundation of democracy and capitalism. It is also the source of the arguments that for the first time ever challenged and ended slavery and colonialism.
Those who attack capitalism attack the most widely successful economic and environmental system and the very basis of a liberal economic and political order that protects individual freedom.
The alternative is an impossible dream that when adopted usually results in inhuman abuses such as slavery, totalitarianism, poverty and environmental degradation. *Brigham Young did not consider that the United Order could, in nature, be capitalistic, however, J. Reuban Clark, 2nd Counselor to LDS President Heber J. Grant, did.
For more information on the difference between capitalism and socialism see J.Q. Wilson “The Morality of Capitalism” and F. Hayek The Road to Serfdom.