Thank You, Capitalism

Thank You, Capitalism


Alex Haney, Fiscal Policy Contributor

During the height of the Bernie Sanders presidential campaign, one of the leading hashtags on Twitter was #ResistCapitalism. It was made most famous by a selfie of a purple-haired young lady with the phrase written on her iPhone. This was in the United States. It might be less surprising to see that in North Korea, but, then again, it would be even more surprising to see the cell phone. The glaring irony here is that it was taken with an iPhone. The contradiction should be obvious. It would be hilarious were it not so disturbing. Capitalism gave us the iPhone, as well as virtually every other technological advance that has ever occurred. Not once, ever, in the history of mankind, has a communist state made a positive contribution to the advancement of society. 

More often than not, communism results in quite the opposite. It tends to give us a stark juxtaposition, as if to teach us what not to do. In fact, every state which has adopted communism has failed. There is one exception to the rule in North Korea. The DPRK is also the worst place in the world to live, quite literally. As for socialist states which are often brought up in argument, such as Scandinavian countries, two patterns have occurred: 
1) The state was capitalist in nature, then stalled when switching to socialism, or
2) the state was socialist in nature, and has seen economic growth since adopting capitalism. 

Let's consider a few examples of failures in communism: the gulags of the Soviet Union, breadlines, internment camps, Pol Pot, the Cultural Revolution of China, Tiananmen Square, etc. Why stop there, though? The real problem with communism is not the idea of equality. Rather, it is the government’s involvement in deciding how equality will be achieved. So let’s extend the list to fascism and socialism: Fascist Italy and Spain in WWII, Vietnam, “thought police,” eminent domain, the Holocaust. So this really is not about capitalism vs. communism; it is capitalism vs. literally any other form of economy. 

Most recently, we may look to Venezuela as an example of the destructive nature of socialism. Venezuela sits on the world’s largest oil reserve. Given the monetary value of oil in today’s world, it stands to reason that the South American state would boast exemplary markets, a high standard of living, and little to no debt. Unfortunately for the people of Venezuela, the opposite is true. The International Monetary Fund projects that inflation in Venezuela will increase 1500% this year. If you have not come across any pictures of supermarkets in Venezuela as of late, depictions show the shelves as all but entirely bare. Tom Woods does a phenomenal job outlining the problems of Venezuela due to socialism here. As Woods brings up, Chile, with almost no natural resources, and having thrown off a formerly Communist government, now holds the third highest standard of living in the Western hemisphere. Per capita GDP has risen, poverty has dropped, jobs have increased, and general wealth in the area has skyrocketed.

The beauty of capitalism, aside from the fact that it works, is that it is purely voluntary in nature. In a purely capitalistic system, coercion is a non-factor, and every single dollar is a voice and a vote. Target, in response to NC Session Law 2016-3 HB2 (the so-called “bathroom bill” which required people to use public bathrooms in accordance to what is on their birth certificate,) made it an open practice to allow anyone to use whichever bathroom they wanted, in any Target store. Target has every right to do this, as it is a privately owned company. We as consumers, though, are equally within our rights to voice either displeasure or celebration of this practice, by either spending money at Target, or choosing to shop elsewhere. Every dollar carries with it an opinion, a vote, and a voice. The consumers determine success and failure in capitalism, rather than the government propping up a failing venture.

I absolutely understand how a person could look at our current system with its bought politicians and unfortunate cases of the little guy being driven out of business by major corporations such as Walmart. The problem, though, is that the system is being misrepresented. We do not live in a truly capitalist society. What we see, now, is crony capitalism. This most notably involves lobbyists paying off politicians to pass legislation which will be most beneficial to them. That is not free market capitalism; that is a rigged system. The answer, though, is not to throw out the baby with the bathwater by switching over to socialism. 

As an important aside, adding “democratic” to the front of something does not make it suddenly good. Democratic-slavery, democratic-genocide, democratic-restriction of liberties. Democratic-Socialism is in virtually every way the same as socialism, except one involves a ballot box. China also holds elections, which are a complete farce. Choosing the lesser of two evils is still choosing an evil, and determining for another how they disperse their earnings is wrong. Socialism assumes that government officials are more qualified than individuals to decide how much a person should earn, which products and services are necessary for that person to live, and how much that person should have to pay for them, rather than allowing consumers and producers to determine such things for themselves.

Make no mistake: major corporations love regulations. They can afford them, and the added costs keep new businesses from entering the market. That includes corporate taxes, by the way. So, if you want to continue helping the rich get richer, keep voting for higher corporate taxes, and more marketplace regulations. In fact, this is exactly how monopolies are able to exist. In a regulation-free market, there is no benefit to a company trying to hold a true monopoly. With no regulations, a company would have to literally buy out every new company that comes around. That's not a viable business model, as all of the company’s assets would be tied up in keeping competition out, rather than on the production of goods or services. Instead, without regulations, good and natural competition arises. Competition breeds lower prices, better goods, and more choices. Why does the iPhone keep getting better? The answer is simple: Apple must continue to compete with other companies for money. Because there are so many alternatives to a particular product, it is incumbent upon the producer to earn your money and your vote. Imagine a world in which there was no competition to the iPhone. There would be no incentive, at all, for Apple to upgrade their product. Not only that, but they'd be able to sell at whatever price they wanted. This is exactly what happens when regulations keep out competitors, or the state owns the means of production. State-run anything is entirely second-class to anything privately owned.

Private owners have an incentive to make something valuable for the consumers. With no competition, there is zero incentive. Why spend money to make something better if people have to buy it, regardless? If you’ve ever wondered why the potholes on a local road don’t get fixed, it’s because there is no incentive to fix them. You have to use that road, no matter what. Even if you don’t, the government doesn’t lose money by you taking a different route. Privatization leads to competition of contracting as well. A company has to offer more for less in order to get a contract. The government has no such requirement. Imagine if you could pick your own police force. Police brutality would likely disappear almost overnight. 

Only capitalism breeds competition. Only true, free-market capitalism creates wealth and destroys poverty. We can look at places such as Detroit, Baltimore, Compton, and any other area where poverty is high. Poverty is a prime indicator of crime. Cincinnati, where I live, was a hotbed of criminal activity up until a few years ago. All these places have been Democrat-run for decades, feeding off of the handout system, thinking it will bring prosperity. The neighborhood of Over-the-Rhine was known as the most dangerous in the United States in 2001. Through a revitalization process which included bringing in new industry, it is now a favorite locale of many people in the area. As new businesses have moved into the area, and money has been pumped in through enterprise, rather than by the government, it’s turned into a nice area, where jobs and opportunities abound. 

Capitalism is blind. It does not care who you are, or where you came from; it does not care about your sex, your race, or your religion. Capitalism is merely a system which allows everyone equal opportunity, and guarantees no one equal success. It is based entirely on merit. A free-market requires work. Those who do not put in the effort do not succeed. Only those who provide a service, or a product that people want, can succeed. It is not a system subject to change at the whim of a political figure. It cannot be bought. It cannot be sold. It cannot be rigged. A truly free market is the only “fair” system that exists in the world. It is the only system that really puts power into the hands of the people. If you want to get rid of innovation, progress, opportunity, and choice, then advocate for socialism. Keep in mind, though, that no one has ever built a raft to escape capitalism; no other country has had such a draw that it brought in immigrants from around the world for the entirety of its history. If someone says their plan is for “the greater good,” sprint in the other direction. 

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