Once in a while, I take the liberty of being political in my column, because, well, it's my column. This being said, money and economics is my purpose when writing for you every week, and even if I stray into the political it will always have a money focus.
Nowadays, as I talk to many people, especially young people on a regular basis, I am finding myself feeling it more and more necessary to defend the very economic system that is the foundation of my job, our economy, and, in a very real sense, the foundation of our great nation.
With the primary victory of Alexandria Ocasio-Cortez in Queens, the strong showing of Bernie Sanders in the national primaries of the last Presidential election and the promotion of ideas such as Elizabeth Warren’s Accountable Capitalism Act just recently revealed, it seems like a lot of high profile voices are publicly attacking “capitalism.”
Capitalism is, quite frankly, a loaded word. The word implies that it is the dichotomy of socialism, now being called “democratic socialism,” as a viable economic system from which we get to choose. The word invokes the image of Wall Street, international bankers and titans of industry. These images are disagreeable to many, some might even say hostile to everyday Americans.
But when its opponents attack “capitalism,” what they are actually attacking is our very economic system, which is not simply a capitalistic system, but can most accurately be described as a free enterprise system.
Socialist politicians don’t attack “free enterprise” because the very idea of attacking something so pure in purpose and intent is absurd. The purpose of a free enterprise system is to enable people to exchange, without coercion, value for compensation. In every free enterprise exchange, or transaction, one party discerns the good or service desired as worth the price of the currency, good or service exchanged for it. This includes the free exchange of time, money and labor.
Now, we can get deep in the weeds about this concept, but the key to any of this debate is the word "free." In an untainted free market economy, hundreds of millions of people spend all day, every day, in an effort to create value for others. Or said simply, serving others for money.
This entire population, intent on serving each other every day, has had the cumulative effect of creating the greatest selection of products, services, innovation and ultimately prosperity in the history of humanity. No other economic system has even come close, certainly not any attempt at socialism, in enabling so many to live comfortable and productive lives.
Does that mean the free enterprise system is perfect? Absolutely not, especially in the corrupted form experienced in most modern nations. There are those who have amassed immense wealth, there are those who struggle with poverty.
Sometimes individuals of wealth did not provide value to others commensurate of the wealth they possess. Sometimes individuals stuck in poverty unfairly suffer from illness or disability.
But in a free enterprise economy, the vast majority of the population benefit from the economic liberty and incentive to serve others, get paid, innovate, create value and invest their earnings in other people’s efforts to do the same thing. It can be unruly, and it is in fact impossible to control, but the results have been nothing short of miraculous for the many nations that have allowed it to flourish.
So next time we find ourselves in a debate about democratic socialism or capitalism, let's swap the word "capitalism" for "free enterprise." And anyone who would argue about diminishing or restricting freedom should in my opinion be met with skepticism.