The word "capitalism" probably brings up images of 19th century industrialists in top hats, robber barons and Wall Street traders. Capitalism is often thought of as cold and impassive, leading to disparity of wealth. In the 1980s Oliver Stone film Wall Street the film's anti-hero claimed, "Greed is good."
Is capitalism necessarily amoral? I don't believe it is. In fact, capitalism properly restrained by law has built the United States into the wealthiest country in the world. This wealth has enabled Americans to act with compassion here in the United States and around the world.
Some claim the benefits of wealth and capitalism are restricted to only a few. "The rich get richer," is the old saying. However, when we look at how poverty has changed in America in the past few decades we can see that our growing national wealth has raised all boats.
Last year, the Heritage Foundation took an in-depth look at official government statistics to see how life has changed for Americans below the poverty line. Today, the average poor American has air conditioning, at least one DVD player, more than one television, cable or satellite subscription and a cell phone. Two out of three Americans living in poverty owns a personal computer while one in three owns a video game system.
Official poverty statistics only account for income. They fail to take in account how our economy transforms luxuries into common household items in the space of only a few years. In 1970, only 36 percent of all American households had air conditioning. Today, over 78 percent of poor households have air conditioning.
There was no major government program to manufacture air conditioning units and distribute them equally. There was a market for cool air and innovators who found cheaper ways to bring the technology to households with less expendable income. Air conditioning companies may not have been intending to do good deeds, but, objectively, air conditioning saves lives on hot days.
The fact that consumer goods haven't become less expensive does not mean that there aren't many Americans who still struggle with basic necessities. There is real desperate poverty in our nation. However, rejecting capitalism is not the way to eliminate poverty.
Poverty is most widespread in nations where there is little or no economic freedom. It may be quaint to see pictures of old American cars driving the streets of Havana, but drivers in Cuba have no choice but to keep fixing up old cars since they don't have access to new automobiles. While the Cuban government has trained plenty of doctors, cars with air conditioning and anti-lock brakes are hard to come by.
Governments do a poor job of allocating resources and often maintain failing policies despite evidence of failure. In communist China, Chairman Mao infamously required all Chinese communities to produce steel in small backyard foundries. The quality of metal was poor, workers were diverted from growing food, but government officials insisted on the success of the program even while the nation was facing a deadly famine.
What we can never forget is that capitalism must be restrained by laws governing fairness and competition. There must be freedom to enter and exit markets. A company with a monopoly or with little competition is not inclined to innovate or to lower prices.
Corporations are not necessarily pro-capitalism. They are fundamentally about their own profit, and are happy to let the government bail them out or grant them a monopoly. Indeed, "too big to fail" may be the greatest threat to our economic system.
I don't believe there is a perfect economic system just as there aren't perfect people. Capitalism can be a force for bringing individuals out of poverty and for raising the standard of living. Government has to maintain freedom, transparency, and a fair playing field for all.
This doesn't mean ignoring the plight of those in poverty. Former Massachusetts Gov. Bill Weld was fond of saying that, "The safety net should be a trampoline, not a hammock." When individuals fall, they should be caught and then prompted to rise back up. I believe they can rise fastest and farthest in a fair and free economy.