Steve Forbes lays out some facts about how capitalism will save us — too bad too few Americans will ever hear these facts:
HARDLY A DAY goes by without some eminence from business or finance proclaiming with furrowed brow and seeming sorrow that capitalism is in crisis and must be overhauled if it is to survive and not be replaced with some variant of socialism. Inequality, climate change, obscene levels of corporate profits, stagnant wages, soaring healthcare costs, crushing levels of student debt, rampant Wall Street greed, high-tech monsters and much more are all laid at the feet of an allegedly heartless, unresponsive capitalistic system.
It ain’t so. Contrary to all this highbrow hand-wringing, the problem is bad government policies and, worse, a fundamental misunderstanding of free markets. It’s time for a reality check regarding this much-maligned system.
Capitalism, free enterprise, free markets–whatever you label our system–is moral because one succeeds by meeting the needs and wants of other people. An entrepreneur tries to discern needs people don’t know they have until a product or service is introduced to the market. Think Steve Jobs and the iPhone and iPad. Businesspeople try to persuade you to buy what they offer. Unless the government gets involved, there is no coercion. Countless people are trying to come up with ways to make everyone’s lives better. If they succeed, they might (gasp!) get rich, but we are all better off.
Ever more sophisticated supply chains rise up, which work precisely because no tsar or central planner is in charge.
Government mistakes–not inherent flaws in free markets–are at the root of every economic crisis in modern times. The Great Depression was triggered by the draconian Smoot-Hawley Tariff Act, which imposed higher taxes on thousands of import items, triggering a global trade war that devastated economies. This felony was compounded when countries–Germany, Britain and the U.S. were the worst offenders–substantially raised taxes in the teeth of a sharp downturn.
Read more: Forbes
Image credit: www.forbes.com.