Losing Our Religion
Do more than light a candle for the patron saint of capitalism
Before he ran for president, Rudy Giuliani gave a couple hundred speeches a year all over the world, to all sorts of groups—business, philanthropic, political. He would often include a riff about how capitalism has improved more lives and done more to lift people out of poverty than any other economic system. The line was usually greeted by polite nods or even raised eyebrows, especially in Western Europe and the bluer precincts of the United States. But when I saw him deliver it in Poland and Russia, it killed.
In those former Communist countries, people burst into furious applause as their translators uncoded Rudy's ode to free markets. Having lived under centralized economies, they get it. We don't.
The speed with which venerable American institutions—Bear Stearns, Lehman Brothers, Merrill Lynch, Wachovia—have disappeared or been gobbled up is jarring. But in most cases, that's just creative destruction at work. What Joseph Schumpeter defined as "the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one."
What's far more disconcerting is how quickly Americans seem willing to throw off our last few vestiges of freedom and adapt a nationalized, Washington, D.C.-based set of standards—replete with pay caps, government-preferred industries (and companies within those industries), and massive new government employment—all in the panicky name of "stability."
Even more startling is that this new economic catastrophe is only about four months old. This isn't the Joads eating dust and paper for 10 years—the stock market was at its all-time high in October 2007 and it has only been since this past October that things have gotten scary bad.
Many religions make saints out of those who refuse to reject their beliefs despite extreme duress. Jesus is a pretty good example, and then there's Count Valentine Potocki, a Polish aristocrat who converted to Judaism and was killed for refusing to renounce. He's been a hero to the Jewish people ever since. So why are Americans—the inventors of Google, the assembly line, and the Pocket Fisherman—suddenly so willing to ditch all we've known and put our trust in Nancy Pelosi and Harry Reid?
My theory is that it's because no one is really standing up for capitalism. No one seems willing to make the case that life lived by one's own wits is, while arguably riskier and more nerve-wracking, better and more enjoyable than one lived under the yoke of big government. And when someone does try to stand up for freedom, he invariably sounds like a ranter, is called a Paultard (or some other schoolyard taunt) and is sent scurrying for cover.
It doesn't have to be this way. Someone could make the case for free markets, arguing that success only has value if failure is an option. He could do it in a way that regular people understand, in a way that even inspires people.
I know this because I saw it on YouTube—and so have almost 200,000 others.
In the grim old days of 1979, when statism was on the march and all but a few free market odd fellows were promoting economic freedom, Milton Friedman was interviewed on television by Phil Donahue. In full helmet-hair glory, Donahue asks the great professor whether the wealth gap and the divide between haves and have-nots proves that capitalism has failed, that "greed" has caused great suffering.
Donahue: "When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in undeveloped countries … when you see the greed and the concentration of power, do you ever have a moment of doubt about capitalism and whether greed is a good idea?"
Friedman: "The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the auto industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it's exactly in the kinds of societies that depart from that. The record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system."
It is a joy to listen to Friedman's forceful and persuasive defense of capitalism. These two-and-a-half minutes should be mandatory viewing for every American. Especially those who believe that "stimulus" in the form of creating government jobs by confiscating the wealth of others will improve our nation's economy.
Ken Kurson, executive vice president of the political consulting firm Jamestown Associates, was the COO of Rudy Giuliani's presidential campaign and coauthor with Giuliani of the No. 1 bestseller, Leadership.
