Sometimes you find support for capitalism and small government in some rather unexpected places.
I was surprised, for instance, when I found out that Gene Simmons, the lead singer for Kiss, stated that, “Capitalism is the best thing that ever happened to human beings. The welfare state sounds wonderful but it doesn’t work.”
That’s pretty hard core.
Or what about the Finance Minister of Denmark’s left-wing government, who admitted that, “We live in a world of global competition for jobs… That requires a modernization of the welfare state.”
That’s not hard core, to be sure, but it certainly suggests that he understands the need to reduce the burden of government spending.
And my jaw hit the floor when I read that former KGB bigwig Vladimir Putin remarked that, “Many European countries are witnessing a rise of [the] dependency mentality when not working is often much more beneficial than working. This type of mentality endangers not only the economy but also the moral basics of the society.”
I’m not about to take lessons in societal morality from a strongman like Putin, but it’s nonetheless surprising that he recognizes that handouts can turn people into supplicants.
So after reading all these examples, perhaps you won’t be overly shocked to learn that Bono, head of the famous U2 band, is a supporter of capitalism. He’s no Milton Friedman, as you’ll see, but check out this quote from an interview in the Guardian.
My father was Labour, classic Dublin Northside household. And I still carry that with me. And though I believe that capitalism has been the most effective ideology we have known in taking people out of extreme poverty, I don’t think it is the only thing that can do it, and in some ways I wish it wasn’t.
Even with his caveats, it’s big news when one of the world’s leading anti-poverty campaigners acknowledges that free markets are the best tool for improving the lives of poor people.
Bono’s comments sort of remind me of when the former leftist president of Brazil remarked that, “…it was necessary to first build capitalism, then make socialism, we must have something to distribute before doing so.”
Neither Lula nor Bono are libertarians, of course, but at least their views are rooted in reality. Which is more than can be said for many of the people in Washington who have never produced anything and have no idea how markets actually work.
Perhaps even more stunning is the fact that Bono defends tax competition and fiscal sovereignty.
…at the heart of the Irish economy has always been the philosophy of tax competitiveness. Tax competitiveness has taken our country out of poverty. People in the revenue accept that if you engage in that policy then some people are going to go out, and some people are coming in. It has been a successful policy. On the cranky left that is very annoying, I can see that. But tax competitiveness is why Ireland has stayed afloat.
Wow, there’s no ambiguity to that statement. I’d like to think he’s knowledgeable about the benefits of tax competition because he’s watched my videos or read my writings, but the real story is that he lived through and personally experienced the Irish miracle.
He saw his relatively poor country become very successful, in large part because of big improvements in tax policy. And he obviously understands the importance of maintaining Ireland’s low corporate tax rate (which I’ve also argued is very important to keep Ireland from sinking further into statist stagnation).
Let’s close with a couple of additional examples of folks on the left who have confessed some very un-PC thoughts, such as the New York Times columnist who bravely wrote that, “This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. …Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month.”
Perhaps most amazing is that a high-ranking official from China’s communist government stated that, “If you look at the troubles which happened in European countries, this is purely because of the accumulated troubles of the worn out welfare society. I think the labour laws are outdated. The labour laws induce sloth, indolence, rather than hardworking. The incentive system, is totally out of whack.”
Last but not least, surely it’s big news that even Fidel Casto confessed that, “The Cuban model doesn’t even work for us anymore.”
P.S. Sometimes even Obama says reasonable things, such as the time he remarked that “No business wants to invest in a place where the government skims 20 percent off the top.” Or the time he said that it was best to ““let the market work on its own.” Unfortunately, when you read the fine print and look at the context, there’s no indication that the President actually has learned anything about economics.
P.P.S. My favorite examples of liberals crossing the ideological aisle are Justin Cronin and Jeffrey Goldberg, both of whom wrote very powerful anti-gun control columns.
[…] Bono actually agrees that capitalism is the best approach to fighting poverty. Too bad the Pope lacks the same insight. […]
[…] would ask her a version of my two-question challenge. Or, better yet, have Bono talk with her about how to genuinely help poor people. Heck, let’s sign her up for an economic history class with Deirdre […]
[…] would ask her a version of my two-question challenge. Or, better yet, have Bono talk with her about how to genuinely help poor people. Heck, let’s sign her up for an economic history class with Deirdre […]
[…] would ask her a version of my two-question challenge. Or, better yet, have Bono talk with her about how to genuinely help poor people. Heck, let’s sign her up for an economic history class with Deirdre […]
[…] Returning to our original focus about which policies actually help the poor, Bono also understands that there’s no substitute for free […]
[…] Returning to our original focus about which policies actually help the poor, Bono also understands that there’s no substitute for free […]
[…] Returning to our original focus about which policies actually help the poor, Bono also understands that there’s no substitute for free […]
[…] everyone (other than insiders), but it’s especially bad for poor people. Bono realizes that capitalism is the right model for upward mobility. Now let’s hope Pope Francis learns the same […]
[…] effet, et bien que j’aie déjà loué les analyses économiques de Bono dans le passé, je soupçonne qu’il ne perçoit même pas à quel point il a raison. Parce […]
[…] even though I’ve praised Bono’s economic analysis in the past, I suspect he doesn’t even understand how right he […]
[…] even though I’ve praised Bono’s economic analysis in the past, I suspect he doesn’t even understand how right he […]
[…] Bono now understands. More remarkable, even Obama once said we should “let the market work.” So maybe there’s […]
[…] Bono now understands. Even more remarkable, even Obama once said we should “let the market work.” So maybe […]
[…] Though let’s give a shout out to the former left-wing President of Brazil, who irritated his socialist supporters by making a seemingly elementary observation that you have to have production before you can have redistribution. Heck, even rock stars are beginning to realize that capitalism is the right approach if you want better lives for the less fortunate. […]
[…] Bono Understands the Need for Capitalism, so Now Let’s See if There’s any Hope for Obama […]
capitalism is the best thing to happen to humanity… on the other hand… crony… predatory… and casino capitalism… coupled with corrupt authoritarian governance is just plain evil………….. we have to work together to fix it…….
Thought you might like to know that I posted at Missouri Tenth about your “Banana Republic” comment in “The Arbitrary Diktats of Generalissimo Obama” and “Is Obama was turning America into a Banana Republic?” Had a nice cartoon about it that we posted as well 🙂
We recently had Obama give a speech in Kansas City in which he said “We are not some Banana Republic”. Curious for him to say that when you and Charles Krauthammer recently said such in your posts. Anyway, my post is at: http://missouritenth.com/2013/09/27/obama-in-kansas-city-were-not-some-banana-republic/
Effort-reward curves do matter after all. What a surprise!
For better or for worse, productivity differences between many individuals, even those living in welfare states, are not measured in mere percentages, not even multiples, but rather orders of magnitude. A manual laborer can probably increase his productivity by 50% by working harder – a lot harder. On the other hand, a bulldozer operator can produce as much as one hundred manual laborers, even when the effort required to build and fuel the bulldozer is accounted for. The bulldozer builder adds two more orders of magnitude, producing as much as ten thousand manual laborers. The bulldozer developer/designer/inventor adds another two orders of magnitude to produce as much as one million laborers.
Sure, I have simplified adding a nice round two orders of magnitude at each level, but you get the idea. Increasing the motivational level of the bulldozer inventor by a mere ten percent is equivalent to the total work of one hundred thousand laborers.
It is difficult to understand the overwhelming advantage of capitalism if one does not understand the gross comparison of these magnitudes. A bulldozer inventor who gets paid one thousand times the salary of a manual laborer is still an incredible deal in terms of total societal prosperity, even for the less wealthy. The true ascent in the manual laborer’s standard of living will come when enough machines are invented to render his digging superfluous while at the same time creating many more jobs at the next higher level (let’s say the bulldozer operator level in our example). His liberation will not come when the one thousand times higher salary of the bulldozer inventor is distributed to the one million manual laborers. That would amount to a pittance anyway, once diluted over a million laborers, and would significantly impact the much more leveraged motivation of the inventor.
This order of magnitude disparity may be an unfortunate fact of life, and more difficult to swallow if you are sympathetic to leftist ideals. What further complicates things is that that even before taxation/redistribution is applied, compensation and motivation are already highly nonlinear. Doubling a high salary does not double the recipient’s happiness and also does not double his/her motivation. In other words, it is already difficult to keep the most competent people employed at their maximum level in the first place. Add redistribution, and the handicap of your society to others with less adulterated effort-reward curves increases. The lower growth rate is produces, relentlessly compounds year after year and sets you and your society on a trajectory to decline – what the western world once priviledged voter-lemmings are experiencing today.
For every Steve Jobs, there are at least a dozen others of equal or near-equal caliber who never achieved his status, being instead satisfied with a, say, ten million dollars in total lifetime earnings – and perhaps minus the pancreatic cancer also. Why? Because like most people they understood that money increases happiness according to a much lower ratio than leftists believe. This is a terrible and mostly unseen loss of growth that never happened. In short, it is already hard to keep the most competent motivated to the maximum of their abilities in the first place, even before the redistribution of progressivism is applied.
Of course, compensation is ultimately reflected in what you can actually buy with it, which may differ some from the nominal figure on your annual 1040. If most of the things you want have been either banned or seriously curtailed – because, say, their carbon footprint will inconvenience some much richer and much longer lived descendants in the unimaginably developed world of the twenty second century – then your effective compensation is also effectively curtailed.
In summary, because of the vast differences in productivity, incentives — especially at the top of the competence curve — do matter greatly. It is the difference in motivation/compensation and the freedom to simultaneously explore many different progress avenues, free of majoritarian central planning, that distinguishes the high-growth from low-growth societies. Those few (likely very few) electorates that either understand that, or just serendipitously follow free market principles, are the ones that will prosper. Meanwhile, in the real world, the electoral choices of bamboozled western world voter-lemmings have been so mediocre lately that their democracies are now on a path to be overtaken, even by dictatorships and semi-democracies. Authoritarian regimes also undergo their own evolution as those who make the worst choices go extinct and the least bad ones survive. While democracy presumably maintains an inherent advantage, if the choices of voter-lemmings don’t improve, it is likely that their societies will start falling below the prosperity levels of even some authoritarian regimes.
Keep mobile.