Archive for May 21st, 2023

A few days ago, I shared a clip about capitalism and big business from a recent speech in Poland. Here’s something else I said, in this case about whether free markets can produce more prosperity for everyone.

The answer, of course, is that capitalist societies have produced mass prosperity. Yes, some people have become astoundingly rich, but the rest of us became much better off as well.

In other words, Walter Williams was right.

In a free market, you only get rich by serving the needs of others.

As I mentioned in the video, many of our friends on the left instinctively reject the idea of a growing pie. They genuinely seem to think that one person’s success means another person’s failure. And this flawed thinking seems to be a big problem with young people.

So let’s revisit the data.

We’ll start with this chart from Our World in Data at Oxford University. As you can see, mass poverty was the norm until capitalism appeared on the scene a couple of hundred years ago.

What about if we look at more recent data.

Here’s another chart from the folks at Oxford, this time looking at the past 200 years. Lo and behold, we see how living standards began to skyrocket as capitalism took hold.

As you can see, living standard rose the most in nations with more economic freedom.

I’ll close with a final chart to debunk the notion that progress has somehow ground to a halt in modern times.

And since most of my readers are in the United States, we’ll look just at what’s happened in post-war America.

Some people point out that growth rates have declined the past two decades.

But that’s not an indictment of capitalism. Every president this century has expanded the size and scope of government. So it is hardly a surprise that the economy is slowing down.

The obvious lesson is that we need a return to the recipe that generates prosperity.

P.S. There is no such thing as a laissez-faire paradise. Even Switzerland has some bad policies, as does Singapore. And the United States may be capitalist compared to the average nation, but we have many bad policies today (and we had some bad policies in the past).

And when there are bad policies such as cronyism, it is possible for people to get rich dishonorably. Those are the people who do hurt the rest of us. The right response, of course, is to get rid of the bad policies, not to condemn all rich people or to condemn the system that allows all of us to enjoy mass prosperity.

P.P.S. Just as one person’s success does not mean another person’s failure, the same is true for nations.

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