Capitalism: the unknown ideal (The Flemish Beerdrinker)

In the beginning there was Karl Marx who wrote that capitalism would create giant inequalities between a few rich capitalists and scores of starving poor.

He was wrong.

Lenin saw that de poor in the capitalistic West became richer. The working class became a class of consumers. The victims would be non-Western poor countries who got poorer while the West got richer.

He was wrong.

In 1989 socialist Robert Heilbroner admitted that capitalism lead to prosperty. Poor countries only got poorer because of too little capitalism and markets, not too much. But capitalism, he said, by creating too much wealth, would destroy the environment.

He was wrong.

Bjorn Lomborg proved that, while the economy grew, and we got richer, almost every environmental problem got better, not worse. We saw the most environmental destruction in the control and command economies of the former communist countries is Eastern-Europe. So Marxist historian Eric Hobsbawn had too admit that capitalism was good in almost everything. But, he said, what it could not provide is happiness. So says also Richard Layard. They are wrong:

happiness hasn’t stopped increasing. According to the World Database of Happiness, directed by the leading Dutch researcher Ruut Veenhoven, satisfaction has increased in most Western countries where we have surveys since 1975. There are diminishing returns , but even at our standard of living people do get happier when societies grow richer. And the happiest places are the most individualist – North America , Northern Europe and Australasia . Another reason for this happiness is that a liberal and market-oriented society allows people freedom to choose. If we get used to it we will get increasingly better at choosing to live and work in ways we like. And if you don’t think you get happier by hard work and mobility, just skip it. A survey showed that 48 percent of Americans had, in the last five years, reduced their working hours, declined promotion, lowered their material expectations or moved to a quieter place. Fast-food or slow-food, no logo or pro logo? In a liberal society, you decide. That is, as long as we are free to make the decisions ourselves. Those who use happiness studies to put forth an anti-market agenda would deny us that freedom. They would tell us how to live our lives, and therefore they would reduce our ability to make such decisions in the future. Despite Layard’s criticism against individualism and materialism even he admits that “we in the West are probably happier than any previous society”. Well, in that case, please, please, please, don’t undermine that society.

As Ayn Rand has said capitalism really seems to be the unknown ideal. Then why so many enemies? And why keep they coming? Johan Norberg, is this brilliant lecture has some suggestions. It appears that we are naturally destined to expect the worst, with the media magnifying this tendency. Take this hilarious example:

A few weeks ago, the first story in the leading news shows on television was that there is a “growing environmental threat” in Europe . The problem was shipping, which is rapidly becoming the biggest emitter of sulphur dioxide in Europe . However, if you listened closely to the report, you understood that this was not because of growth of emissions from shipping – it did grow but very modestly – but because of a rapid reduction in emission from other sources. Total sulphur dioxide emissions in Europe (including shipping) have been reduced by about 60 percent in 15 years. So the real story was one about a dramatic improvement in environmental conditions – but shipping was now the thing we have to deal with, and so it was news.

Or this:

In September the United Nations Development Program, UNDP, released its annual report on human development. The press statement talks about the places with growing problems and about the 18 countries that have lagged behind. The report summarises the worldwide situation with statements like ”the overall report card on progress makes for depressing reading” and ”the world is heading for a heavily sign-posted human development disaster”. But how has the poor countries developed as a whole? Hidden away in another place of the report, with much less dramatic wording, the UNDP concludes: ”Looking back over the past decade the long-run trend towards progress in human development has continued. On average, people born in a developing country today can anticipate being wealthier, healthier and better educated than their parent’s generation.” It goes on to say that the last 15 years in poor countries have seen less poverty, reduced infant mortality, better access to clean water, less illiteracy, fewer conflicts and more democracies. This is what they summarise as a “human development disaster”!

And this:

The film, produced by the Public Broadcasting Service, was about the fact that Wal-Mart buys most of its goods from China . This was portrayed as a disaster for America , and for almost an hour it interviewed workers and factory owners who lost their jobs and businesses because of cheap Chinese imports. 1-0 to the anti-globalists. It is true that an American manufacturing worker might lose his job because of this, but there are other effects that the film didn’t show. A Chinese worker gets a job, of course, and if he does he will spend his new income somehow, which means more jobs for export companies and/or Chinese companies. American consumers get cheaper prices, and when they do they can spend their extra purchasing power on new goods and services, and so an unemployed American can get a new job in a new sector. Chinese worker – export company –consumers – new sectors develop: Four good results, in other words 4-1 to the globalists and free-traders.

Like Americans abroad, capitalism can’t be a force for good, so good news is swept under the rug, or washed away with the bad news. Capitalism, the deliberately unknown ideal.