We Owe Our Prosperity to Capitalism

All the prosperity we enjoy today we owe to capitalism. For decades progressivists have attempted to challenge this notion. One of the most notable was the 1979 interview Phil Donahue had with Milton Friedman, the 1976 Nobel Prize winner in Economics.

Donahue posed this question to Friedman, “When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few ‘haves’ and so many ‘have-nots,’ when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism, and whether greed is a good idea to run on?”

Friedman brilliantly turned the table on Donahue. “Well first of all tell me, is there some society you know that doesn’t run on greed? Do you think Russia doesn’t run on greed? Do you think China doesn’t run on greed? What is greed?” And then cracking a smile he jested, “Of course none of us are greedy. It’s only the other fellow who’s greedy.”

Friedman then turned serious again and made his point, “The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under orders from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped the kind of grinding poverty you are talking about, the only cases in recorded history, are where they have had capitalism and largely free trade.

“If you want to know where the masses are worst off, it is exactly the kind of societies that depart from that. The record of history is absolutely crystal-clear: That there is no alternative way, so far discovered, in improving the lot for ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

Donahue responded with a now-all-too-familiar progressivist response, “It seems to reward, not virtue as much as the ability to manipulate the system.”

But Friedman again shines a bright light on the truth of things. “And what does reward virtue? Do you think the Communist Commissar rewards virtue? Do you think a Hitler rewards virtue? You think, excuse me if you’ll pardon me, do you think the American president rewards virtue? Do they choose their appointees on the basis of the virtue of the people appointed, or on the basis of their political clout? Is it really true that political self-interest is nobler somehow than economic self-interest? You know, I think you’re taking a lot of things for granted. Now please tell me, just where in the world will you find these angels who are going to organize society for us?” Friedman’s smile then returned as he looked Phil Donahue in the eye and said, “Well, I don’t even trust you to do that.”

The same could be said of our local politicians. Does our mayor reward virtue? Does he choose his huge number of appointees on the basis of their virtue? Or does he choose them based on his political self-interest? When we hear the mayor, in league with county Commissioners, preach about organizing our society for us through government-dictated economic development, are we to believe these politicians are somehow more virtuous than business owners or individuals making their own decisions about their businesses and their own lives? As Friedman reminds us, great economic achievements don’t come from government bureaus (or planning commissions, or economic development authorities). The record of history is clear: The greatest economic achievements for our society come when individuals are free to pursue their separate interests.

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