There's nothing wrong with Capitalism
There's nothing wrong with free enterprise
Don't try to make me feel guilty
I'm so tired of hearing you cry
There's nothing wrong with making some profit
If you ask me I'll say it's just fine
There's nothing wrong with wanting to live nice
I'm so tired of hearing you whine
About the revolution
Bringin' down the rich
When was the last time you dug a ditch, baby!
Charles Murray examines the cloud now hanging over American business—and what today's capitalists can do about it.
By Charles Murray
Mitt Romney's résumé at Bain should be a slam dunk. He has been a
successful capitalist, and capitalism is the best thing that has ever
happened to the material condition of the human race. From the dawn of
history until the 18th century, every society in the world was
impoverished, with only the thinnest film of wealth on top. Then came
capitalism and the Industrial Revolution. Everywhere that capitalism
subsequently took hold, national wealth began to increase and poverty
began to fall. Everywhere that capitalism didn't take hold, people
remained impoverished. Everywhere that capitalism has been rejected
since then, poverty has increased.
A butcher
Capitalism has lifted the world out of
poverty because it gives people a chance to get rich by creating value
and reaping the rewards. Who better to be president of the greatest of
all capitalist nations than a man who got rich by being a brilliant
capitalist?
Yet it hasn't worked out that way for
Mr. Romney. "Capitalist" has become an accusation. The creative
destruction that is at the heart of a growing economy is now seen as
evil. Americans increasingly appear to accept the mind-set that kept the
world in poverty for millennia: If you've gotten rich, it is because
you made someone else poorer.
What happened to turn the mood of the country so far from our historic celebration of economic success?
Two important changes in objective conditions have contributed to
this change in mood. One is the rise of collusive capitalism. Part of
that phenomenon involves crony capitalism, whereby the people on top
take care of each other at shareholder expense (search on "golden
parachutes").
But the problem of crony capitalism is trivial compared with the
collusion engendered by government. In today's world, every business's
operations and bottom line are affected by rules set by legislators and
bureaucrats. The result has been corruption on a massive scale.
Sometimes the corruption is retail, whereby a single corporation creates
a competitive advantage through the cooperation of regulators or
politicians (search on "earmarks"). Sometimes the corruption is
wholesale, creating an industrywide potential for profit that would not
exist in the absence of government subsidies or regulations (like
ethanol used to fuel cars and low-interest mortgages for people who are
unlikely to pay them back). Collusive capitalism has become visible to
the public and increasingly defines capitalism in the public mind.
Henry Ford with his Model T
Henry Ford with his Model T
Another change in objective conditions
has been the emergence of great fortunes made quickly in the financial
markets. It has always been easy for Americans to applaud people who get
rich by creating products and services that people want to buy. That is
why Thomas Edison and Henry Ford were American heroes a century ago,
and Steve Jobs was one when he died last year.
When great wealth is generated instead
by making smart buy and sell decisions in the markets, it smacks of
inside knowledge, arcane financial instruments, opportunities that
aren't accessible to ordinary people, and hocus-pocus. The good that
these rich people have done in the process of getting rich is obscure.
The benefits of more efficient allocation of capital are huge, but they
are really, really hard to explain simply and persuasively. It looks to a
large proportion of the public as if we've got some fabulously wealthy
people who haven't done anything to deserve their wealth.
The objective changes in capitalism as it is practiced plausibly
account for much of the hostility toward capitalism. But they don't
account for the unwillingness of capitalists who are getting rich the
old-fashioned way—earning it—to defend themselves.
I assign that timidity to two other causes. First, large numbers of
today's successful capitalists are people of the political left who may
think their own work is legitimate but feel no allegiance to capitalism
as a system or kinship with capitalists on the other side of the
political fence. Furthermore, these capitalists of the left are
concentrated where it counts most. The most visible entrepreneurs of the
high-tech industry are predominantly liberal. So are most of the people
who run the entertainment and news industries. Even leaders of the
financial industry increasingly share the politics of George Soros.
Whether measured by fundraising data or by the members of Congress
elected from the ZIP Codes where they live, the elite centers with the
most clout in the culture are filled with people who are embarrassed to
identify themselves as capitalists, and it shows in the cultural effect
of their work.
Wall Street traders around 1925
Another factor is the segregation of capitalism from virtue.
Historically, the merits of free enterprise and the obligations of
success were intertwined in the national catechism. McGuffey's Readers,
the books on which generations of American children were raised, have
plenty of stories treating initiative, hard work and entrepreneurialism
as virtues, but just as many stories praising the virtues of
self-restraint, personal integrity and concern for those who depend on
you. The freedom to act and a stern moral obligation to act in certain
ways were seen as two sides of the same American coin. Little of that
has survived.
To accept the concept of virtue requires
that you believe some ways of behaving are right and others are wrong
always and everywhere. That openly judgmental stand is no longer
acceptable in America's schools nor in many American homes.
Correspondingly, we have watched the deterioration of the sense of
stewardship that once was so widespread among the most successful
Americans and the near disappearance of the sense of seemliness that led
successful capitalists to be obedient to unenforceable standards of
propriety. Many senior figures in the financial world were appalled by
what was going on during the run-up to the financial meltdown of 2008.
Why were they so silent before and after the catastrophe? Capitalists
who behave honorably and with restraint no longer have either the
platform or the vocabulary to preach their own standards and to condemn
capitalists who behave dishonorably and recklessly.
Ray Kroc
And so capitalism's reputation has fallen on hard times and the
principled case for capitalism must be made anew. That case has been
made brilliantly and often in the past, with Milton Friedman's
"Capitalism and Freedom" being my own favorite. But in today's political
climate, updating the case for capitalism requires a restatement of old
truths in ways that Americans from across the political spectrum can
accept.
Here is my best effort:
The U.S. was created to foster human flourishing. The means to that
end was the exercise of liberty in the pursuit of happiness. Capitalism
is the economic expression of liberty. The pursuit of happiness, with
happiness defined in the classic sense of justified and lasting
satisfaction with life as a whole, depends on economic liberty every bit
as much as it depends on other kinds of freedom.
"Lasting and justified satisfaction with life as a whole" is produced
by a relatively small set of important achievements that we can rightly
attribute to our own actions. Arthur Brooks, my colleague at the
American Enterprise Institute, has usefully labeled such achievements
"earned success." Earned success can arise from a successful marriage,
children raised well, a valued place as a member of a community, or
devotion to a faith. Earned success also arises from achievement in the
economic realm, which is where capitalism comes in.
The Google office in 2008
Earning a living for yourself and your family through your own
efforts is the most elemental form of earned success. Successfully
starting a business, no matter how small, is an act of creating
something out of nothing that carries satisfactions far beyond those of
the money it brings in. Finding work that not only pays the bills but
that you enjoy is a crucially important resource for earned success.
Making a living, starting a business and finding work that you enjoy
all depend on freedom to act in the economic realm. What government can
do to help is establish the rule of law so that informed and voluntary
trades can take place. More formally, government can vigorously enforce
laws against the use of force, fraud and criminal collusion, and use
tort law to hold people liable for harm they cause others.
A dry-cleaning store
A dry-cleaning store
Everything else the government does
inherently restricts economic freedom to act in pursuit of earned
success. I am a libertarian and think that almost none of those
restrictions are justified. But accepting the case for capitalism
doesn't require you to be a libertarian. You are free to argue that
certain government interventions are justified. You just need to
acknowledge this truth: Every intervention that erects barriers to
starting a business, makes it expensive to hire or fire employees,
restricts entry into vocations, prescribes work conditions and
facilities, or confiscates profits interferes with economic liberty and
usually makes it more difficult for both employers and employees to earn
success. You also don't need to be a libertarian to demand that any new
intervention meet this burden of proof: It will accomplish something
that tort law and enforcement of basic laws against force, fraud and
collusion do not accomplish.
People with a wide range of political
views can also acknowledge that these interventions do the most harm to
individuals and small enterprises. Huge banks can, albeit at great
expense, cope with the Dodd-Frank law's absurd regulatory burdens; many
small banks cannot. Huge corporations can cope with the myriad rules
issued by the Occupational Safety and Health Administration, the
Environmental Protection Agency, the Equal Employment Opportunity
Commission and their state-level counterparts. The same rules can crush
small businesses and individuals trying to start small businesses.
financial moguls attract more suspicion.
Financial moguls attract more suspicion
Finally, people with a wide range of political views can acknowledge
that what has happened incrementally over the past half-century has led
to a labyrinthine regulatory system, irrational liability law and a
corrupt tax code. Sweeping simplifications and rationalizations of all
these systems are possible in ways that even moderate Democrats could
accept in a less polarized political environment.
To put it another way, it should be possible to revive a national
consensus affirming that capitalism embraces the best and most essential
things about American life; that freeing capitalism to do what it does
best won't just create national wealth and reduce poverty, but expand
the ability of Americans to achieve earned success—to pursue happiness.
Reviving that consensus also requires us
to return to the vocabulary of virtue when we talk about capitalism.
Personal integrity, a sense of seemliness and concern for those who
depend on us are not "values" that are no better or worse than other
values. Historically, they have been deeply embedded in the American
version of capitalism. If it is necessary to remind the middle class and
working class that the rich are not their enemies, it is equally
necessary to remind the most successful among us that their obligations
are not to be measured in terms of their tax bills.
Their principled
stewardship can nurture and restore our heritage of liberty. Their
indifference to that heritage can destroy it.
—Mr. Murray is the author of "Coming Apart: The
State of White America, 1960-2010" and the W.H. Brady Scholar at the
American Enterprise Institute.
Capitalism - Oingo Boingo
There's nothing wrong with Capitalism
There's nothing wrong with free enterprise
Don't try to make me feel guilty
I'm so tired of hearing you cry
There's nothing wrong with making some profit
If you ask me I'll say it's just fine
There's nothing wrong with wanting to live nice
I'm so tired of hearing you whine
About the revolution
Bringin' down the rich
When was the last time you dug a ditch, baby!
If it ain't one thing
Then it's the other
Any cause that crosses your path
Your heart bleeds for anyone's brother
I've got to tell you you're a pain in the ass
You criticize with plenty of vigor
You rationalize everything that you do
With catchy phrases and heavy quotations
And everybody is crazy but you
You're just a middle class, socialist brat
From a suburban family and you never really had to work
And you tell me that we've got to get back
To the struggling masses (whoever they are)
You talk, talk, talk about suffering and pain
Your mouth is bigger than your entire brain
What the hell do you know about suffering and pain . . .
(Repeat first verse)
(Repeat chorus)
There's nothing wrong with Capitalism
There's nothing wrong with Capitalism
There's nothing wrong with Capitalism
There's nothing wrong with Capitalism
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