"Government is the
great fiction through which everyone endeavors to live at the expense of
everyone else."
------- Frederic Bastiat, The Law
Only 53 percent of
Americans believe capitalism is better than socialism, according to an
April Rasmussen poll, down from 70 percent in 2008.
Undoubtedly, the decline
in capitalism's esteem is due to the massive bailouts of major banks and
corporations and excessive salaries for their officers. There also is a
gross misunderstanding of who benefits from capitalism. Few people seem
aware that most "big" businessmen do not believe in capitalism, the
economic system of limited government, private property, and free
enterprise with both profits and losses, and never have.
Adam Smith acknowledged
this critical point in 1776 in the Wealth of Nations when he
wrote that all proposals from businessmen should be viewed "... but with
the most suspicious attention." And that "people of the same trade
seldom meet together, even for merriment and diversion, but the
conversation ends in a conspiracy against the public, or in some
contrivance to raise prices."
Highly intelligent A type
personalities with strong wills, aggressive resourcefulness and
obsessive enterprise (businessmen) tend to succeed under any system of
social organization whether political, caste, religious or economic.
They can run huge corporations privately or for any government. But only
under capitalism can the strong succeed by serving the weaker -- and as
the weaker wish to be served.
Capitalists are
instrumental in making free enterprise work but they are merely the
helmsmen that steer a ship, writes Ludwig von Mises in Human Action.
None are free to direct the course, each is merely a steersman. Each
must unconditionally obey the captain's orders. The captain is the
consumer. Consumers, through their buying or abstention from buying,
decide what should be produced in what quantity and quality. Consumers
make poor people rich (Bill Gates, J.K. Rowling, Sam Walton, Oprah
Winfrey, Ross Perot) and rich people/corporations poor (GM, Chrysler,
Mervyns, Circuit City, Bombay, Sharper Image).
http://mises.org/Books/humanaction.pdf
Capitalism is production
for the masses, for you and me, not for royalty, politicians or an
aristocracy. Silk stockings were made for an aristocracy -- the mass
production of nylons was for shop girls. Once you had to be wealthy to
own a clock (when they cost as much as a cottage), now anyone can afford
a Timex. Capitalism, Mises notes, "is an economic democracy in which
every penny gives a right to vote. Consumers are the sovereign people."
It is the only system that allows for the allocation of resources based
on what consumers want everyday and are willing to pay for, and not
dependent upon the guesswork of bureaucrats and politicians.
Scribbled on a gas
station restroom wall: "Everyone has an idea for making a million
dollars (that won't work)." Under free enterprise capitalism you must
"persuade" people to voluntarily buy your ideas, products, services.
However, when a politician has a million-dollar idea he or she can use
the power of government to "force" others to support it. Government, as
economist Murray Rothbard has pointed out, "is the only organization in
society that obtains its revenue not by voluntary contribution or
payment for services but by coercion."
We're hearing a lot today
about greed (covetousness). It's always been with us -- it's not new
with the current banking meltdown and bailouts. Greed is not confined to
business. Really, can you imagine ever a class of people greedier than
politicians who want to tax everything that moves and everything that
stands still?
Why do so many people
loathe capitalism? Mises contends that under other economic systems,
wealth is not a market phenomenon but obtained by conquest, extortion or
government favoritism. Capitalists, however, owe their wealth to people
who voluntarily support their vocations. People tend to overestimate
their own worth but know under capitalism their worth is determined by
what they contribute to satisfying the desires of consumers -- in the
opinion of consumers. Consumers determine what each of us gets paid by
what they are willing to pay for our services. There is no one else to
blame for our economic shortcomings.
Two of the "Seven Deadly
Sins," envy and covetousness offer another clue. Those reporters,
lawyers, intellectuals who resent capitalism do because their former
classmates are more successful. University professors after years of
study earning degrees resent capitalism because they know of people like
an "uneducated" friend who dropped out of high school, became a
contractor serving consumers and created a $14 million estate before
dying prematurely.
Movie stars resent
capitalism after they become rich and famous. Because the public gets
bored easily and constantly needs amusement they know they will be
history after one flop, a constant source of anxiety. How utterly
unfair. They resent a fickle audience that rewards a Madonna every time
she re-invents herself (with $242 million in 2008) when they believe
they sing better. Whereas in socialist countries the arts and sciences
get preferential treatment and participants are continuously honored and
elevated to the highest levels of society.
Hopefully, more Americans
will learn that they as consumers are first and foremost the primary
beneficiaries of capitalism and the cornucopia it provides us through
the businessmen who simply steer the ship. While it's government's
responsibility to create a fair field without favor, government should
not be a referee that makes up rules as it goes along while also
becoming a player in the game.
We all must fight for the
things in which we believe. It's not enough simply to be against
socialism. We must endorse free enterprise and explain it as best we
can. History has proven that governments consume wealth and only
capitalism can create wealth -- for us and our children.
Schnaubelt, president of Citizens for
Private Property Rights, has been a commercial real estate broker for 39
years and was a San Diego City Councilman from 1977-81.
