“I love this country. This country which gives chance to everybody else to be treated as a human being, to be a big human being, to fulfill yourself as a human being. That’s what I feel about this country.” — Ruslan Tsarni, uncle of the Boston Marathon bombers.
I felt such pride hearing these words from someone not born in the United States. It reminded me that we natives often take for granted the tremendous privilege we have in being Americans. As Tsarni said, this is the land of opportunity.
Today, though, the obvious way to reach that opportunity is being called into question. Our country has historically exalted hard work, individual initiative and thrift (resulting in the wealth creation as a result of compounding discussed in my previous columns). These values are reflected in our Declaration of Independence and Constitution. Although, not specifically mentioned in these documents, the economic system that has fostered opportunity, and the highest standard of living the planet has ever known, is capitalism.
Capitalism has fallen out of favor with some politicians and university professors. However, it has proven to be the only known economic system to support opportunity. Capitalism is also the only known economic system to appropriately channel greed. Kings and dictators are notorious for having surrounded themselves with confiscated treasure for generation after generation. Government, also, allows for unchecked greed. Look at the officials of the small town of Bell, Calif., who voted themselves salaries so high that at least one would have received an annual pension payment of more than $1 million. The Robesonian has editorialized often about the local county commissioners and how they were able to create cushy circumstances, often without transparency to the public, with no checks and balances other than the local newspaper. Vice President Joe Biden can also ring up millions of dollars of expenses on three vacations in the first three months of the year without any checks and balances.
We have thousands of years of research results to show us that many human hearts will turn toward greed. The economic system that best puts the brakes on greed is capitalism. I am greedy if I want not just the money I have earned, but some of the money you have earned. In a capitalist system, the only way I can get you to give me some of your money is if I provide value to you. McDonald’s would not last if you didn’t think it was worth handing over $3.29 in exchange for a Big Mac. Nearly all other economic systems take your money through the force of power or the force of law. If you don’t give a dictator what he wants, you will likely be visited in the middle of the night. If you don’t pay the government what the politicians have passed into law, the power of government will be brought against you. But no capitalist can force you to give up your money. You always give it up willingly, because you are exchanging value for value. It is true that exchanging value for value allows some people to become very wealthy. Steve Jobs, for example, became very wealthy because millions of people found value in owning an iPhone.
As long as we leave capitalism in place, opportunity flourishes. Today, though, in the United States we have greatly interfered with capitalism. We have allowed, for example, many major corporations to persuade government officials to use government to help their businesses through tax breaks, various other credits, and bailouts. We have allowed the health care system to evolve so that most expenses are paid through insurance, completely breaking the value-for-value exchange. For most of the health services we receive, we don’t know their cost at the time we receive them. When was the last time you bought a car without knowing what it cost, simply agreeing to pay whatever the cost is through future premiums?
In my next column, we will explore how capitalism is the best economic system to support human dignity, and also look at the common criticisms of capitalism (spoiler: most of the criticisms are of perverted forms of capitalism, not true capitalism).