Capitalism

The Case for Capitalism

Economic freedom makes the world better.

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Presidential candidates and the media keep telling people "it's immoral" that a few rich people have so much more money than everyone else.

They talk as if it doesn't matter what the rich did to get the money. Instead, the fact that they are rich is itself immoral.

Yaron Brook of the Ayn Rand Institute says this is lunacy. "They want to condemn the people that actually have moved civilization forward," Brook complains. "People who improved the standard of living for everybody on the planet."

Everybody? How is that possible? Isn't there a certain amount of money in the world, so that when rich people grab a lot there's less for everyone else?

No. Because wealth can be created.

But for thousands of years, that barely happened.

"We basically made about $2 a day for 100,000 years—in other words, we could eat what we farmed," recounts Brook. "Then (250 years ago) something amazing happened."

That "amazing" thing was capitalism.

For the first time, ordinary people were allowed to profit from private property. Specialization of labor created efficiency that let people produce more with less. Then they traded to get more. That created wealth.

"Two-hundred and fifty years ago, we suddenly discovered the value of individual freedom," says Brook in my new video. "The value of leaving individuals free to think, to innovate, to produce without asking for permission, without getting the state to sign off on it—and we call that the Industrial Revolution."

But ever since, politicians have complained about the profits. In the movie based on Ayn Rand's novel Atlas Shrugged, state officials demand that steel magnate Hank Rearden justify his wealth.

"I do not owe you an answer, but I could tell you in a hundred ways," replies Rearden. "Thousands of jobs, billions in revenue, fueling our economy despite your efforts."

Rearden was very right. Capitalism created new wealth.

"We got much, much, much richer, it's hard to imagine," explains Brook. "We got electricity, running water, things we all take for granted today but we didn't have 150 years ago. And yes, some people complain about inequality, but everybody got richer. Even the poor got richer."

Much richer. That's the key point.

Capitalism's critics imply that rich industrialists "took" money from others—as if the world's wealth is one pie. If Amazon founder Jeff Bezos takes a big piece, then the rest of us have less.

But that's not how life works. Bezos got rich by baking thousands of new pies. He created new wealth.

Capitalism creates wealth because under capitalism, unlike socialism, transactions are voluntary.

We see this every time we buy something.

At the coffee shop, I give a clerk a dollar and she hands me coffee. Then there's a weird double "thank you!" moment: We both say "thank you." Why?

Because both of us felt we were better off.

Under capitalism, we both must like the deal, or the transaction doesn't happen. She wanted my dollar more than the coffee; I wanted the coffee more than the dollar. It's win-win.

The only way to get rich under capitalism (unless you cheat) is to serve your customers well.

We live with that kind of winning every day in capitalist countries, and it's made almost everyone better off.

Since the Industrial Revolution, recounts Brook, "We have more than doubled our life expectancy. We have dramatically increased the quality of our life, and we are wealthier than anybody could have imagined."

Today's "democratic" socialists say government must aid the poor and sick because capitalists will only help themselves. But Brook points out, "the weak and poor under capitalism have done better than in any other system!"

Very true.

Capitalism, he concludes, "is a fantastic system that is fundamentally moral because it allows individuals to pursue their own happiness. Your pursuit of your own well-being—a virtue in and of itself—also helps the world be a better world."

COPYRIGHT 2019 BY JFS PRODUCTIONS INC.
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NEXT: Jon Stewart Is Sanctimonious, but Congress Should Be Better at Doing Its Job

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  1. Enterprises, which transform labor and materials into goods and service people want, will create wealth.

    In state-run enterprises, the wealth will go to politicians and dictators, who will line their own pockets, and focus on creating the goods and services that will increase their political or military power. What is made and how it is made will be determined by despots or by demagogues.

    In private enterprises, the wealth will go to the capitalists who are best at creating what society values while using the fewest resources to create it, pocketing the difference for themselves, and directing most of it into other profitable enterprises. What is made and how it is made will be determined by the people who are best at making stuff and deciding what to make.

    Over time the differences compound and become astronomical.

    1. “Over time the differences compound and become astronomical.”

      Money will do this. It doesn’t matter if the owner of the money is smart, or good at making stuff. The owner doesn’t even have to be good at managing money, as such skills are available for hire.

      “Enterprises, which transform labor and materials into goods and service people want, will create wealth.”

      Isn’t borrowing money America’s chosen method to create wealth?
      I think the enormous debts from federal debts to individual debts show that this particular way to create wealth shouldn’t be overlooked. The idea of manufacturing goods and selling them to people has a quaint 20th century air to it.

  2. Capitalism IS freedom. Anyone against it is a slaver piece of shit.

  3. Caption: “This is how you teach a turd who’s boss.”

  4. Every dollar you get, absent force or fraud, is a vote for what you do from a grateful fellow human. Free enterprise is the best democracy in the world. Screw those calling for “more democracy” while threatening force to overturn the consumer’s vote.

  5. Those who can, do.
    Those who can’t, teach.
    Those who can’t teach, teach gym.
    Those who can’t teach gym become socialists.

    1. Those who can teach also become socialists.

  6. It doesn’t matter how good capitalism is, the radical left will always be against it and for socialism. When you say how and why socialism can’t succeed (as it has always failed) they same the same thing: That wasn’t true socialism, the leader was corrupt. I am not a Trump fan, but it’s either him or socialism.

    I am 32 years old and I would never think in my life time that we would have people in the Democratic party who were actual socialists (they are self proclaimed socialists). That is like actual fascists being within the ranks of the Republicans… it just boggles the mind.

  7. What the author has not addressed is the concerns that today’s capitalism is not working efficiently. That years of economic policy favoring the wealthiest have resulted in a concerns that cause other economic philosophies, socialism in particular, to appear more attractive. We expect a wealth gap with some people having much more than others. The concern is that that gap has grown as large as it has and that it will move from a gap to a barrier. Effectively cutting off people from ever improving their lives. While some candidates talk about social, more are capitalist asking for reform. So my question to the author is can we make reforms to capitalism that are not socialism? By the way many people have not earned their wealth; some inherited it; some ran companies into the ground and got golden parachutes; some like President Trump did deals with people no one else would deal with.

    1. So my question to the author is can we make reforms to capitalism that are not socialism?

      Get rid of all subsidies, allow freedom of association in all business transactions (yes, I’m talking about cakes).

      By the way many people have not earned their wealth; some inherited it;

      So what?

      some ran companies into the ground and got golden parachutes;

      As freely negotiated in their contracts.

      some like President Trump did deals with people no one else would deal with.

      A captive market? Oh, no!

    2. What the author has not addressed is the concerns that today’s capitalism is not working efficiently.

      Of course not: today’s capitalism is 50% state capitalism, 45% crony capitalism, and 5% free market capitalism. You want to improve that? Decrease state capitalism and crony capitalism and increase free market capitalism.

      The concern is that that gap has grown as large as it has and that it will move from a gap to a barrier. Effectively cutting off people from ever improving their lives.

      Your ability to improve your life depends on the resources you have available, i.e., your absolute wealth. Bill Gates owning a big yacht does not interfere with your ability to improve your life.

      in a concerns that cause other economic philosophies, socialism in particular, to appear more attractive

      Socialism appears more attractive because it has a large propaganda machinery behind it. And that machinery is behind it because the 50% of state capitalism and 45% of crony capitalism make a small, powerful minority very wealthy. And the thing that minority fears most of all is free market capitalism, which is why they want to increase state and crony capitalism.

      1. “Bill Gates owning a big yacht does not interfere with your ability to improve your life.”

        Gates owning a congressperson may interfere with this ability.

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