Capitalism is good for you


Jacinda Ardern had only just become Prime Minister when she declared capitalism a blatant failure.

But as Thomas Gordon says, you may not like it, you may not be good at it, but capitalism is good for you:

. . . Numerous politicians are reminding people that some individuals are doing very well with capitalism and that the vast majority of us haven’t been as successful as them. A system that rewards some people more than others may strike you as inherently unfair. Competitive capitalism, where some people try and fail and businesses go bankrupt and have to lay off their employees, seems stressful and unnecessary to some.

Stressful yes, unnecessary maybe, but what’s the sustainable and viable alternative?

But I’m going to ask you to take a step back from thinking about who has what right now and think longer term about the things in your life that make you better off. Think about the possibility that capitalism puts life-saving, game-changing, incredibly convenient products and services in your life whether you participate directly in working on those innovations or not. Some are arguing that the average person in today’s advanced countries wouldn’t trade places with a billionaire 100 years ago. Napoleon and George Washington would be very jealous of your ability to instantaneously text people thousands of miles away.

In the past, very rich and powerful people had to watch relatives die if they got certain kinds of bacterial infections. Now, you can easily go out and procure antibiotics. The richest person in Rome couldn’t have his or her favorite perishable dish until their servants prepared it, and now you simply take your favorite dish out of the refrigerator and put it in the microwave. Progress has become so profound and pervasive that some are arguing that the average person in today’s advanced countries wouldn’t trade places with a billionaire 100 years ago.

It is important to mention that successful innovation yields very high societal returns. A successful innovation improves the lives of every human being using that innovation for the rest of humanity. Someone invented the wheel, and now billions of people have driven vehicles that use that wheel.

The person who invented malaria pills that would have kept President Teddy Roosevelt from getting the disease benefited all those hundreds of millions of people who live/will live in or travel to tropical zones where malaria is a problem. I would argue that if an innovator lives a little better lifestyle than the rest of us during their lifetime, that’s a small price to pay for all the future advantages their innovation brings to humanity. And by the way, not all innovators are fabulously wealthy people.

If innovators are earning more, it’s rarely, if ever, through luck alone. There might be some luck involved but it’s almost always because they’ve also taken risks, made investments and worked very hard.

Capitalism is very good at rewarding progress, and over time, a great deal of progress has been accomplished by capitalism. Some accomplishments of capitalism are game-changing, such as vaccines and the commercialization of the internet . . .  Some innovations are more humble, such as the successful start-up of a restaurant with a good location or the right cuisine in a medium-sized town.

All around you, people are paying attention and trying to improve our world in ways big and small. Hundreds of years ago, someone invented a flathead screw for joining wood or metal together. In your lifetime, an impact driver was invented that now makes it easy to drive that screw with a handheld tool, and this process has replaced most nails. Disk drives used to be the size of a rugby ball, and you placed those drives into a device the size of a washing machine. Now you can hold the storage of a thousand of those drives in a smartphone in the palm of your hand.

Dentistry started out as a painful process with drilling that used soft metals such as gold to fill cavities. More recently, some fillings require no drilling at all. The bonding material is so good that the filling is just added to the tooth and cured. All this progress makes products and services cheaper for all income groups in society—not just the well-off.

Innovative methods and products might cost more at the start, but one of the benefits of commercialisation is that prices usually drop.

Our first microwave cost $1000. That was 36 years ago, now you can get one for less than $100.

Capitalism is responsible for almost all progress, not socialism or communism. Socialist and communist societies have very poor reputations for innovation in every realm except the military. I can think of only two innovations that came out of socialist/communist societies that were superior to capitalist products: Lasik and the Rubik’s cube. The Lasik procedure was developed because someone cut their eye in a bar fight in the Soviet Union, and a doctor was paying attention. The Rubik’s cube was invented in Eastern Europe but commercialized in the West.

Capitalism has many individuals, small businesses, and corporations working on improvements; the good ideas rise to the top, while the bad ideas fail. Those resources quickly go elsewhere. The probability that a huge government bureaucracy with competing agendas could pick the successful ideas out of thousands of candidates and implement them to the customers that want them is very low.

All this happens naturally and easily in a capitalist system. Ask yourself how long the world would wait for the smartphone if Cuba or North Korea had been relied upon to invent it. It could be that we would never get a smartphone because the chief of internal security wouldn’t want people communicating that way and would cancel the project. The smartphone was developed in Silicon Valley in about 20 years.

Capitalism gives power to people. Governments have the power under alternative systems.

So the choice is yours. There are plenty of politicians out there to vote for who are willing to take nearly all the income a capitalist system generates and reallocate it the way they (you?) think it should be. Most experience shows that this taking kills or severely restrains innovation. Or you can have a sense of humor and stick with the system that, though messy, has made your life much better the last ten, hundred, and thousand years and will make the life of future generations better in ways we can’t even now imagine.

Capitalism isn’t perfect. There is a role for government and its agencies in building and maintaining some infrastructure, providing some services and helping the most vulnerable.

But to do all that, governments needs money and they will get more money from individuals and businesses operating in a capitalist system than if they were operating under socialist or communist regimes.

Unequally wealthy better than equally poor


Inequality has become  another of the left’s causes de jour.

The easiest way to close the gap between rich and poor is to make the rich poorer.

That wouldn’t help anyone because it’s not who has how much that matters, but whether everyone has enough.

Determining how much is enough, whose responsibility it is to ensure everyone has it, how they get it and who pays for it raise questions for which there are no simple answers.

But it would help if we ruled out those which have been proved not to work, among which are attempts to get economic equality which result in everyone getting poorer.

A society which is unequally wealthy might not be perfect but it’s still a long way better than one in which everyone is equally poor and miserable.
@[188355460514:274:Capitalism] is Freedom.

Hat tip for picture to Capitalism.

In praise of capitalism


Letter of the week in The Press:

Remember every time you enjoy a latte … you are lucky to have the benefits of capitalism,” writes The Press’s letter writer of the week.

In answer to Gareth Morgan and Susan Guthrie (“Reviving the values of an egalitarian society,” Perspective, Nov 21), I’m for business, technology and the highest wages I can generate . . .

The countries that have experienced the flow-down from the Industrial Revolution are immeasurably better off than those that haven’t. . .

Please don’t tell me that you won’t permit me to have my washing machine, my automobile, my iPhone or the wages I earn.

You can live in any way you choose (I will not interfere) and spend your money the way you choose on the priorities you value.

Remember, every time you enjoy a latte or an organic salad, you are lucky to have the benefits of capitalism at your beck and call, and it not only saves and extends your life, but enhances your life beyond measure.

I’m against your egalitarianism, your environmentalism, and every other anti-man dogma you can invent. You can keep your redistribution of rewards according to your primitive outlook. I’m for laissez-faire! – D. McFarland.

Capitalism isn’t perfect  but no-one has yet come up with a sustainable alternative.

Against capitalism, for what?


It started with Occupy Wall Street and it’s spread across the globe using communications media which are the product of the system against which they’re protesting.

Several blogs have shown the photo which illustrates further hypocrisy, using and wearing goods produced by the capitalists against whom they rail.

They’re against capitalism, but what are they for and which of the products of capitalism are they prepared to sacrifice for their cause.

Capitalism isn’t perfect but, like democracy, it’s far better than the alternatives.

Shackles of poverty best broken by capitalsim not welfare


Trans Tasman takes its usual reasoned and throughtful approach to the Foreshore and Seabed issue and concludes:

Some authorities dismissed the foreshore and seabed decision as just another example of Key’s deal-making skill.What they miss is Key’s determination to honour the spirit of the Treaty of Waitangi, and harmonise race relations to a degree unmatched anywhere in the world. It’s a goal liberals find hard to accept coming from a conservative party, but is not so astonishing for those who believe capitalism, rather than welfarism, is the most effective instrument through which the shackles of poverty can be broken.

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