Why we need capitalism in the US
TRANSCRIPT: The date is December 25, 1991. Mikhail Gorbachev has resigned the post of General Secretary of the Communist Party of the Soviet Union. The Soviet Union has been dissolved into 15 sovereign states. By this time, the Berlin wall had fallen, and Germany was unified. Likewise, the rest of Eastern Europe had been freed from Soviet Domination. The Soviets were outspent, and they collapsed from the inside out.
The United States had won the Cold War.
The question: Why? Why was it that the US was able to outlast the only other superpower—a superpower which for a while was winning the Cold War. After all, they were first in space and their economy was progressing much faster than America’s considering the complete decimation it faced in the Second World War. Why was it that the Americans prevailed?
It was the efficiency and ingenuity of the US, and her allies, which brought the Soviet Union to its knees. Capitalist principles were the cause of this efficiency (by which every dollar spent by the US was used more effectively than every ruble spent by the Soviets) and ingenuity (for which the US developed far better technology as evidenced by the space race and the moon landing). In a way, the US was the better producer of products (missiles, bombs, people, and information) and the Soviet Union killed itself trying to keep up. Their system of centralized control of most everything had failed. The Soviets, it seems, failed to understand that they were fighting in a capitalist world. This is a capitalist world because it is a human world.
Capitalism, whether its opponents realize it or not, is the embodiment of the human spirit—of self-interest and of ambition. It is also natural (being the economic expression of natural selection in economics) and moral (being the economic expression of human freedom). This is what we will discuss tonight.
Let us start with ambition or drive. Can you name one great literary classic which was made by a government committee? Not any of Shakespeare’s plays nor any of Homer’s epics. What about scientific advancements? Einstein did not develop the theory of relativity because of government mandate. Neither did Galileo prove Heliocentrism by way of a King’s decree. In fact, Galileo developed his ideas to the objection of a central planner—the pope. Look at the Irish language. It developed over the years without any central planning as people used words, agreed upon them as mutually beneficial, and thus progressed the language. There was no coercion involved—only voluntary interaction. Yet, when force and coercion did arrive, in the form of the Anglo-Norman (English) overlords, they could not stamp out the Irish language, nor the culture which it established. Even after centuries, the central planning of the destruction of the Irish way of life proved to be a failure. No central authority can plan better, or create more efficiently, than individuals perusing their own interests.
Socialists might object, perhaps citing NASA as a government agency. ("Capitalism and Inequality") After all, didn’t the government put a man on the moon? It did, but it did so in competition with the other superpower, the Soviet Union, which was also trying to put a man on the moon. Take out the competition, and the need for efficiency and fast ingenuity is lost. That glorious NASA rocket thus is reduced to a rumbling Yugo, a car produced by communist governments in Europe, void of any competition. It is no wonder why it was joked that the Yugo got its name by the phrase, “You go push, I’ll steer.” (Seriously, if you don’t know what a Yugo is, go google it. It’s pretty sad).
It is this rugged completion that creates order in society, as in nature with natural selection. Businesses will fail and succeed in a free market, and that is a good thing, because over time, the good businesses with better strategies and products will accumulate in the economy of a country. This is much akin to how successful traits accumulate in an ecosystem. In both expressions of evolution, the overall structure becomes more resistant to disaster and danger. This is evidenced in economics by the fact that the economies of capitalist nations always rebound after recession or depression. The Soviet economy, however, imploded in on itself because all economic decisions were made by one entity—the state.
We now approach morality. Is socialism moral? Or communism? Well, they do seek to create equality. Their goal is to centralize planning in the hands of a benevolent authority which can make decisions for the betterment of all people. Surely, their intentions are good, but do they succeed? They do not. Look at the Soviet Union of old, the champion of the worker’s rights. For all their talk of equality, there was no right to vote besides in the communist party. There was less opportunities to get higher wages compared to the capitalist countries at the time, and there were entire luxuries (certain cars, for example) that were only available to the high-ranking members of the Soviet Government. For this failed try at equality, the Soviet people sacrificed their freedom to speak and think as they wished. So, they got neither equality nor freedom.
The United States, however, put freedom first for most of its history. Thus, with economic choice came political choice (unlike in the USSR). The wage gap between foreman and worker on average was also less than in the Soviet Union. All this occurred without coercion by the government because in capitalism exchanges are made by agreement, not force (Hayward). Thus, in capitalism, everyone benefits who participates. Because of this, freedom and rough equality are possible (I will not say that complete equality is ever possible because people are inherently different). Adam Smith’s idea of the invisible hand is thus manifested again. (195)
My time is almost up, so I will leave with this statement: The economic issue of more government or more freedom has always been present in the United States. Adam Smith more or less invented capitalism in 1776 (what a year). John Adams and Thomas Jefferson argued about the role of government in the economy till they died. Even so, if you look at the morality, the logic, and the history of this system, it is clear that Capitalism is good for the United States. Those who wish to see this otherwise are blind to the truths about nature, humanity, and our story on this planet.
Good night, and God bless the United States of America.