I chanced upon this excellent, simple essay by Jim Powell. Extracts below.
Why There Is No Human Progress without Capitalism.
by Jim Powell (senior fellow at the Cato Institute, and author of FDR's Folly, Wilson's War, Bully Boy, The Triumph of Liberty and other books.)
President Obama is on the warpath, attacking capitalism, but Republican candidates haven’t offered much of a counter-attack. This is a bit of a mystery, since the case for capitalism is overwhelming.
SHEER POVERTY, THE FATE OF MAN BEFORE CAPITALISM
For thousands of years, there was virtually no such thing as human progress. In Europe, peasant possessions were generally limited to little more than a shirt, a pair of pants, perhaps a simple jacket, a bench, a table and a straw-filled sack that served as a mattress. In India, there were hardly any chairs or tables to be found. There were few chairs in Islamic lands.
Multitudes perished because of famines — France alone had hundreds of famines before 1800. Famine undermined the ability of people to resist common deadly diseases like typhoid fever, purple fever, whooping cough, sweating sickness, diphtheria, smallpox, influenza, syphilis and the plague.
Capitalism, as economic freedom is often called, has changed the world for the better by harnessing individual self-interest — the most reliable motivator there is. In markets, functioning without subsidies, special favors or bailouts, entrepreneurs have had powerful incentives to provide what consumers want.
In many places, local people used common property for grazing, but they didn’t have any incentive to improve common property, since somebody else would gain at least part of the benefit. Then in England during the 1700s, higher grain prices led property owners to begin enclosing common property. [O]nce land was enclosed, owners had incentives to improve it, because they would benefit. They drained marshes, grew more crops, built walls and erected buildings including houses for laborers who worked on their property. Agricultural output went up, helping to banish famines.
Meanwhile, the Industrial Revolution gained momentum with the development of English textile mills. Entrepreneurs produced not luxuries for the rich but cheap cotton clothing for the multitudes. This made possible improved sanitation, since people could wear one set of clothing while they washed the other set.
Most important, England’s population was increasing rapidly, and without the Industrial Revolution, millions would have starved, as happened in rural Ireland during the 1840s.
“England was delivered, not by her rulers,” historian Thomas S. Ashton wrote after World War II, “but by those who, seeking no doubt their own narrow ends, devised new instruments of production. ”
But aristocratic landowners weren’t happy, because textile mills created jobs that attracted large numbers of people away from farm work on their estates. The original smears against capitalist factories were made during the 1800s by English aristocrats and later picked up by socialists.
Capitalist entrepreneurs created stupendous numbers of jobs. During the early years of the 20th century, when millions of immigrants landed in America, the unemployment rate dropped as low as 1.6 percent. Many immigrants launched what became giant business enterprises. Notable immigrant job creators included John Jacob Astor, Adolphus Busch, William Colgate, Alexander Graham Bell, Samuel Goldwyn, Louis B. Mayer and Helena Rubenstein.
[I]f government doesn’t have excessive taxes, regulations or other obstacles to enterprise, capitalism achieves the highest growth rates of any economic system, creating more and more new jobs.
[G]reat charitable enterprises developed along with great business enterprises during the nineteenth century, before there was a welfare state… For instance:
- In 1833, New York silk merchants Lewis and Arthur Tappan joined Boston abolitionist William Lloyd Garrison to help form the American Anti-Slavery Society.
- In 1859, Geneva-born businessman Henri Dunant was horrified to arrive in Solferino, Italy after French and Italian forces had fought the Austrians. The battlefield was littered with some 38,000 bodies, and nobody was taking care of the wounded. In 1863, he helped found the International Committee of the Red Cross, and he helped establish Red Cross organizations in other European countries. In 1901, Dunant was awarded the first Nobel Prize.
- In the Old World, art collections were often built up from plunder, but in the New World art has been a byproduct of capitalism — long before the National Endowment for the Arts existed. Entrepreneurs and their heirs like the Rockefellers, Guggenheims, Havemeyers and Mellons supported museums.
- In the heyday of laissez faire capitalism, before public schools were widespread, parents assumed more responsibility for educating their children, and America became a highly literate country.
The most successful 19th century entrepreneurs didn’t have much formal schooling, but they had a keen appreciation of learning. [This is useful information for Bhagwad Jal to know]. This was decades before there was a federal Department of Education.
During the 19th century, successful entrepreneurs funded great colleges and universities (Massachusetts Institute of Technology, Cornell, Johns Hopkins, Stanford, University of Chicago).
Decades before women had the vote, entrepreneurs supported education for women by launching women’s colleges.
While government officials suppressed information about and access to birth control methods, large numbers of women obtained both from private businesses like Sears, Robuck.
As historian Braudel reminds us, “Wherever the market is absent, or insignificant, one is certain to be observing the lowest plane of human existence.”
Capitalism is worth defending. Hopefully, the presidential candidates will learn how to do it.
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