Category: Capitalism

MLLG

Adam Smith Tricentennial

George Noga

Why there is no capitalist manifesto
GEORGE NOGA – JUN 25, 2023

This month is the 300th anniversary of Adam Smith, born June 1723 in Kirkaldy, Scotland. Adam Smith was not the father of capitalism, as he often is called, but the first to articulate its principles. He is known for his invisible hand metaphor explaining how self-interested individuals operate in a system of mutual interdependence and direct economic life more effectively and fairly than government intervention.

a statue of a man standing in front of a building

Adam Smith did not invent capitalism because it evolved organically. No intellectual ever wrote a capitalist manifesto. Capitalism doesn’t require pointy-headed professors to theorize; it just happens naturally. To the eternal pique of liberal elites, no one is capable of controlling capitalism, whereas socialism requires controllers, i.e. the same progressive savants who castigate capitalism. Capitalism is egalitarian and rewards those who best serve sovereign consumers; i.e. their fellow man.

Capitalism evolved in prehistoric times

Capitalism evolved organically. For example, Paleolithic fishermen worked incessantly, spearing just enough fish to survive. Then along came one nascent capitalist who thought of a net. Since neither he nor anyone else had any capital he could borrow, he worked longer hours for months to accumulate enough surplus fish (his capital) to give him time to make a net. With his net he generated a fish surplus to trade for other goods. He also financed others who, in turn, specialized in different skills, with the resultant benefits from the division of labor. Our first capitalist became wealthy, but his capital also made everyone else much better off.

“It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interests.”

In sharp contrast, socialism never has happened organically. All the failed attempts throughout history to achieve Utopia, Xanadu, Zion and Valhalla were spearheaded and financed by some ivory-tower dreamer. That explains, as well as anything, why capitalism always succeeds and why all forms of collectivism always fail.

More Wisdom from Adam Smith

Adam Smith wrote many other pithy statements about economics and capitalism, which continue to have relevance for those of us in the twenty-first century. His point in Wealth of Nations about comparative advantages of trade still resonates.

“By means of glasses and hotbeds, very good grapes can be grown in Scotland and very good wine too can be made of them at about thirty times the expense for which at least equally good can be brought from foreign countries.”

Smith’s statements about the role of government also are valid 300 years on.

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

“To hurt in any degree the interest of any one order of citizens, for no other purpose but to promote that of some other is evidently contrary to that justice and equality the (government) owes to all the different orders of citizens.”

“The statesman who attempts to direct private people in what manner they ought to employ their capital would not only load himself with unnecessary attention, but assume an authority which could be entrusted to no council, and which would nowhere be so dangerous as in the hands of a man who had the folly to fancy himself fit to exercise it.”

Perhaps my favorite Adam Smith quote applies (in spades) to today’s virtue-signaling progressives, private-jetting climate alarmists, greenwashing corporations, limousine liberals and their ilk. Adam Smith had their number 300 years ago when he wrote:

“The man who has performed no single action of importance, but whose whole conversation and deportment express the justest, the noblest and most generous sentiments, can be entitled to no very high reward. We ask him, what have you done.”

Adam Smith’s genius lie in being first to clearly explain an economic phenomenon that is as old as our Paleolithic fisherman who first generated an economic surplus. Remember, no one ever wrote a capitalist manifesto because it wasn’t necessary. Unlike all forms of collectivism, capitalism is organic and consistent with human nature. That explains why capitalism and free markets succeed and socialism fails.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Tale of Two Islands

George Noga

Both had revolutions in 1959
GEORGE NOGA – MAY 14, 2023

 

I continually search for new ways to highlight the blessings of liberty (both political and economic) and the evils of collectivism in all its many manifestations. Nothing puts this into as sharp relief as the Tale of Two Islands from 1959 to 2023.

Revolutions occurred on two islands in 1959. Both countries were mountainous, less than 25% arable and relied on sugar exports. Both faced large, powerful and hostile enemies, separated by less than 100 miles of ocean. In both cases, their enemies cut off diplomatic and economic relations and threatened military invasions. However, one of the island nations was way ahead of the other in terms of health, education, income and nearly all other metrics of national well-being.

The country you likely are familiar with is Cuba, which in 1959 had nominal GDP of $2.0 billion and a population of 7 million, resulting in per capita GDP of $286. In 1959 the communist revolution led by Castro took over and abolished both political and economic freedom. Prior to its revolution, Cuba was far more prosperous than the other island; its GDP per capita was double that of the other island.

The second island nation is Taiwan. In 1959 its nominal GDP was $1.6 billion and its population 11 million, equating to per capita GDP of $145. In 1959 Taiwan underwent an economic revolution, adopting capitalism and a market economy. In the early 1970s Taiwan also had a political revolution – becoming a liberal democracy.

Fast forward to 2023. Cuba has GDP of $110 billion, a population of 11.3 million and (nominal) per capita GDP of $9,700, ranking 75th in the world. Out of 176 countries ranked, Cuba’s index of economic freedom ranks 175th in the world; only North Korea is worse. Taiwan has GDP of $900 billion and a population of 24 million for per capita GDP of $37,500 placing it 30th highest in the world. Its freedom index is 4th best in the world, much higher even than the USA which ranks 25th.

This tale of two islands illustrates the differences between freedom and capitalism versus tyranny and collectivism. Moreover, the GDP data for Cuba are suspect and Cuba’s true rank is likely one of the lowest in the world. Take home pay, according to most sources, is less than $100 per month. Cuba remains a brutal dictatorship filled with political prisons that engage in torture. Even its vaunted health care system is a failure. Cuban doctors botched Fidel’s treatment and doctors from Spain had to be flown in. Infant mortality is the worst in Latin America and is based on forced abortion of risky pregnancies and on not counting underweight births.

In 1959 Cuba’s per capita GDP was twice Taiwan’s; now it is 4 times lower, a swing of 800% – and the real data are far worse. But numbers alone do not tell the full story. The juxtaposition of Cuba and Taiwan from 1959 to the present is one of freedom versus repression, prosperity versus stagnation and hope versus desperation. Cuba today is a nihilistic society where 35% of pregnancies are aborted. It reveals the depth and breadth of the human and economic disaster wrought by collectivism.

Che Guevara may continue to adorn the tee shirts of clueless youth. Useful idiots, in and out of the media, may continue to offer encomia; but the Cuban people, when the regime finally crumbles, will render final judgment. Castro statues will be felled, murals will be defaced and the truth about the incalculable poverty and suffering of the Cuban people will be outed.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

Titanic Myths

George Noga

Setting the record straight

Titanic Myths

GEORGE NOGA – APR 16, 2023

Although Titanic sank 111 years ago yesterday, many Promethean myths (Prometheus was a Titan) reverberate even today. Most accounts (especially the DiCaprio film) are ignorant, dishonest and politically motivated. This post sets the record straight.

Myth: Capitalism (Greed) Caused the Loss of Life

The PC narrative is White Star Lines (WSL) did not have enough lifeboats due to greed (cost) or aesthetics. The real blame lies with inept government regulation by the British Board of Trade (BOT). The designer, builder and WSL all deferred to the BOT about the number of lifeboats, as it was the unchallenged authority. However, BOT regulations were 20 years old and enacted when 10,000 tons and 20 lifeboats was the norm; Titanic was 46,238 tons. Bureaucrats were rewarded for issuing new regulations, not updating old ones. No one challenged the BOT. Once government becomes involved, common sense and personal responsibility disappear.

Myth: First Class Passengers Got Preferential Treatment

Dissecting the data, 74% of women and 20% of men survived. However, 44% of first class passengers were women versus 23% third class. When adjusting for gender, the survival rates between first and third class were about the same. A third class female was 41% more likely to survive than a first class male. Third class passengers were more reluctant to leave the ship and part with baggage; also, their location aboard ship made survival more problematic. When third class passengers reached the boat deck, they were accorded the same treatment as all others. Survival was not about class; it was about women and children – nearly all of whom were saved.

Myth: Male aggression Hurt Survival of Women and Children

The number of men who survived is cited as evidence of male aggression. There was lifeboat capacity for all women and children and 550 men. There were many more men than women on board. If one man were loaded onto a lifeboat for each woman and child, all women and children would have been saved. Moreover, lifeboats would have been loaded quicker and with less fear, keeping families together and saving more lives. Male behavior, far from being aggressive, resulted in more than 200 fewer men surviving than should have been the case.

Myth: The Media – Then and Now – Fairly Report the Facts

Most contemporaneous media accounts were tainted by laziness, i.e. the failure to properly understand the data. Present day media stories hew to a politically correct narrative of blaming capitalism, greed, class warfare and male aggression for the calamity. The movie Titanic falsely depicted third class passengers forcibly barricaded to keep them from reaching lifeboats. Nor was anyone shot. The crew and passengers were stereotyped in the worst possible way, despite acting heroically and fearlessly in the fact of near-certain death. Note: Fox (which made the movie) has since apologized to families of those falsely portrayed in the movie.

Enduring Lessons of Titanic

First and Foremost, the Titanic disaster was a failure of government, not of capitalism. The media are feckless and lazy; it is far easier and more dramatic to blame the ship’s designer, builder and owner rather than an amorphous, faceless gaggle of bureaucrats. Nearly without exception, the media falsely portrays a politically correct narrative that blames capitalism, class warfare and toxic masculinity.

Source Note: Data for survival rates were taken from the formal investigation conducted by the British government as reported on several websites.

© 2023 George Noga
More Liberty – Less Government, Post Office Box 916381
Longwood, FL 32791-6381, Email: mllg@cfl.rr.com

MLLG

MLLG Labor Day 2021 Special Posting . . . Capitalism Contains a Self-Destruct Gene

George Noga

The cardinal rule for parasites is never to kill the host.

MLLG Labor Day 2021 Special Posting . . .

Capitalism Contains a Self-Destruct Gene

By: George Noga – September 5, 2021

Labor Day rightfully honors labor, but there also should be a day set aside to honor capital, which greatly enhances the productivity and value of labor. Throughout history, man’s labors have resulted only in grinding poverty, but when capital alloys with labor great wealth is produced. Unfortunately, capitalism is self-destructing.

Karl Marx 170 years ago wrote that capitalism contained the seeds of its own destruction. He thought competition would become destructive and exploited workers would rise up to create a classless society. Marx was right about capitalism but for the wrong reason. A century ago, economist Joseph Schumpeter also posited capitalism would self destruct. Schumpeter believed the success of capitalism contained the seeds of its ultimate destruction. Schumpeter was right and for the right reason.

Schumpeter: “Capitalism cannot survive . . . its very success undermines the institutions which protect it and creates conditions in which it cannot survive.”

Not only has Schumpeter been proven right, his rationale was accurate. He reasoned that: (1) capitalism would create enormous wealth; (2) the wealth thusly created would enable many more people to become educated; (3) it would spawn a large intellectual class that made its living attacking the system of private property and freedom necessary for its own existence; and (4) people educated by such progressives would vote for liberal welfare states, leading to the demise of capitalism. BINGO!

Just how bad is it? Nearly half of US adults now say they prefer socialism to capitalism. A poll asked if respondents had a favorable view of capitalism or socialism. A majority of Democrats favored socialism; in fact, Democrats in every age group, gender and race preferred socialism. Millennials preferred socialism by nearly a 50% margin and 60% said they would rather live under socialism than capitalism. Perhaps those folks should spend their next vacation in Venezuela, Cuba or North Korea.

Capitalism has created a cornucopia of wealth; extreme poverty is nearly eradicated and every metric of human well being is improving. However, the demise of capitalism will usher in a dark age and destroy all those blessings along with our liberty. When Schumpeter’s prediction reaches fruition, it will drag the entire planet into a lengthy and unspeakable Orwellian torpor where all men lead lives of quiet desperation. Nowhere is it written that liberty must survive. Of the 120 billion humans that have trod this earth since time began, fewer than 1% have lived their lives in liberty.

We have written often about whether or not the success of capitalism truly sows the seeds of its own destruction. Up until now, we have not answered that question. With much regret, we now must conclude that capitalism will indeed be destroyed by its own success. Somewhere, Joseph Schumpeter must be thinking that he told us so.

The cardinal rule of parasites is never to kill the host – but that is precisely what is happening today as progressive parasites are murdering their capitalist hosts.

Our next post is about the privatization of Social Security.
More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us

Will Liberals Please Just Leave Me Alone

George Noga

Mankind divides into two camps: those who seek control and those who want to be left alone.

Will Liberals Please Just Leave Me Alone

By: George Noga – June 13, 2021

Political labels abound. There are democrats, fascists, liberals, communists, centrists, conservatives, progressives, populists, republicans, socialists, libertarians, anarchists, democratic socialists and many others. Labels notwithstanding, all mankind is divided into two camps: those who want to control others and those who want to be left alone.

Robert Heinlein (Stranger in a Strange Land) wrote, “Humanity divides politically into those who want people to be controlled and those who have no such desire.” Grover Norquist wrote that people divide politically between the “leave us alone” and the “takings” coalitions. Thomas Jefferson nailed it 260 years ago: “Men are divided into two parties. There are those who fear and distrust the people and wish to place all power into the higher classes. Then there are those who identify with the people and have confidence in them. In every country these two parties exist. Call them by whatever name you please, but they are the same parties and pursue the same object.”

Liberals want people to be controlled and they want to be the controllers because they know best what is good for all 330 million Americans. Liberals don’t want to leave people alone; they want to take from them. Liberals fear and distrust the people and the states and want to arrogate all power to themselves. They believe in the supremacy of the state and thereby reject the principles of America’s founding documents. They must control individuals to control society in order to bring about their vision of Utopia, inevitably resulting in hell on earth, as in all Utopias throughout history.

Why Liberals Hate Capitalism and Love Socialism

Liberals fear and loathe capitalism even though it has created enormous wealth for all Americans and indeed for the entire world. They reject it because they cannot control it. Following are the main reasons liberals hate capitalism and love socialism.

Capitalism happens organically: Adam Smith did not invent capitalism; he merely explained what happens naturally. No intellectual ever wrote a capitalist manifesto. No one is capable of controlling capitalism, whereas socialism requires controllers.

Capitalism is egalitarian: Anyone, including uneducated blokes, can make a fortune by providing a valuable product or service to consumers. In contrast, intellectuals are unrecognized and unrewarded; they are repulsed by successful capitalists.

Consumers are sovereign: The common man holds all the power; his decisions to buy (or not to buy) make suppliers rich (or poor). Wealth is achieved only by serving consumers; socialists and intellectuals have no special status or benefits.

Capitalism brooks no excuses: Success is based only on the ability to provide value to others. Capitalism is to each according to his accomplishments, not to his intentions.

Socialists are not rewarded by markets: Socialists succeed only by pleasing their government masters, not by providing value to others. Socialists prefer regulation to the chaos of markets and believe their pet theories should override the free decisions of individuals, if necessary by invoking the full police power of the state.

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Liberals covet control over others; they don’t understand why the poor ignorant rubes in flyover land believe they know what is best for themselves and for their families. Socialists, often highly educated intellectuals with pristine intentions, envision themselves as heroic emancipators, crushing greedy capitalists, saving helpless victims, creating a socialist Utopia and then reaping the approbation of all mankind.

Recorded history began 5,000 years ago with Sumerian cuneiform script. During the entire span of 5 millennia there is not one record of a successful socialist or Utopian state. But modern day liberals believe they will get it right next time if we give them just one more chance. My message to them is simple: Please, just leave me alone.

Next: For the first time, we devote an entire post to the minimum wage.
More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us

Labor and Capital Day 2019

George Noga
Capitalism is an economic democracy in which every penny has the right to vote.
Labor and Capital Day 2019
By: George Noga – September 1, 2019

          Tomorrow, as we properly honor labor, we should equally celebrate capital, which enhances labor by making it more productive and hence more remunerative. Throughout history, mankind’s labors have resulted only in poverty for the masses. But when capital alloys with labor, it puts labor on steroids and eliminates poverty. Despite capitalism’s astounding achievements, it gets no respect from the media, the public or the academy and only derision from progressives; following are ten reasons why.

1. Capitalism is an economic system; as such, it is without equal. Most (if not all) shortcomings attributed to it by liberals are really political. The role of capitalism is to maximize the economic pie; the role of politics is to divide the pie as, and if, needed.

2. Progressives make false comparisons. They compare ideal socialism (never achieved anywhere) to capitalism as practised.  As demonstrated in our March 24, 2019 post (go to www.mllg.us), capitalism beats socialism in theory, practice and morality.

3. The media are ignorant and biased. Capitalism has stamped out poverty and vastly improved the human condition, but is widely condemned – even by the Pope. Surveys show 95% of Americans are ignorant of capitalism’s stunning accomplishments. The only plausible explanation is ignorance and bias in academia and the media.

4. Capitalism evolved organically. No intellectual wrote a capitalist manifesto. Adam Smith didn’t invent capitalism, he merely explained what occurs naturally, no eggheads required. No one controls capitalism, whereas socialism requires controllers, i.e. progressive panjandrums, who believe they know what is best for everyone.

5. Self interest (greed) is the basis of capitalism. Greed is an inseparable part of the human condition. The genius of capitalism lies in channeling greed into incentives to serve your fellow man, whereas socialism channels it toward destructive ends.

6. Consumers are sovereign. Intellectuals and progressives enjoy no special status; the common man holds all the power. Sovereign consumers’ decisions about what to buy (or not) makes suppliers rich or poor. Wealth is achieved only by serving consumers.

7. Capitalism doesn’t need intellectuals. Professors are not highly esteemed by markets to which their exalted education and lofty intentions are superfluous. Academics prefer regulation to the chaos of markets and believe their pet theories should override the free decisions of consumers – if necessary, by using the police power of the state.

8. Capitalism is egalitarian. Uneducated blokes can make fortunes by say recognizing markets for cheaper used parts and stripping equipment to harvest them. They repulse elites by both their success and the obscene manner they spend their fortunes. They got rich because they took risks and provided services consumers valued. Meanwhile, poor overeducated pointy-headed progressives go unrewarded and unrecognized.

9. Capitalism brooks no excuses for failure. Success is based solely on one’s ability to provide value to his fellow man. Capitalism is an economic democracy in which every penny confers the right to vote. Its credo is: to each according to his accomplishments, not to his ideas or intentions. Those who fail are found wanting by their fellow man.

10. Progressives covet control over others. They don’t grasp why the poor, unwashed, ignorant rubes in flyover land believe they know what’s best for them. Progressives fancy themselves as heroic emancipators, crushing greedy capitalists, saving helpless victims and then rollicking in the just approbation and adulation of all mankind.

          Capitalism has created a cornucopia of wealth unprecedented in human history, virtually eliminating extreme poverty. Nearly every metric of human well-being is the best ever and continues to improve. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are now affordable at Walmart and Costco. These miracles were created not by, but in spite of, government and progressivism.

         Let’s continue to honor labor on the first Monday in September. As the world’s greatest capitalist nation, let’s also celebrate capitalism and the capitalists who had an impossible dream, took great risks and had the determination to see it through.

Next on September 8th is MLLG’s back-to-school special about teacher pay.
More Liberty Less Government  –  mllg@mllg.us  –  www.mllg.us

Socialism vs. Capitalism: Results – Theory – Morality

George Noga
“Tyranny is the political corollary of socialism, as representative government is the political  corollary of a market economy. To suggest otherwise ignores history.”  (Ludwig von Mises)
Socialism vs. Capitalism: Results – Theory – Morality
By: George Noga – March 24, 2019

        Apologists for socialism disingenuously compare ideal socialism to the actual practice of capitalism. What if we compared ideal capitalism to real-world socialism? In this post, we compare results to results, theory to theory and morality to morality.

The Results of Socialism Compared to the Results of Capitalism

       No serious economist argues socialism produces better results than capitalism. Socialism never has created sustained prosperity. It can only achieve a brief illusion of prosperity by plundering a nation’s wealth, confiscating assets, inflating, borrowing, nationalizing, and printing worthless currency. But it always ends the same way, i.e. starvation amidst plenty. Socialism’s failures are legion: the USSR, Venezuela, Cuba, North Korea and the Chicoms. It never has worked for more than 25-50 people, such as a family, clan or tribe, where familial bonds supercede economic considerations.

In just the past 25 years (per the World Bank) capitalism has cut extreme poverty by 75% – equal to 1.2 billion human beings, with an additional 50 million being lifted out of poverty each year. Every day, another 135,000 people escape poverty. Today less than 10% of the world’s population live in extreme poverty and it could end within our lifetime. This is by far the greatest economic accomplishment of all time, thanks to capitalism. Capitalism’s successes also are legion: the USA, Western Europe, Japan, the Nordics, Singapore, Canada, Australia, Botswana, New Zealand and South Korea.

The Theory of Socialism Compared to the Theory of Capitalism

        Under ideal socialism, the governing values of the citizens are community and equality; they view their economic well being as a common enterprise. They share the work according to their abilities and no one demands extra benefits due to greater talent or work effort. All inequalities due to undeserved advantages or disadvantages are eliminated. In this socialist utopia, all the people are economically equal.

        Ideal capitalism means self interest and markets. Some citizens are more talented,  exert more effort or take greater risks; hence, some are wealthier than others. But this arouses no envy because all the citizens are unselfish. When someone is in need, neighbors help. Just as in the socialist utopia, the citizens care about each other and value community. All of the good aspects of the socialist utopia are present but so are additional benefits such as innovation and the production of more and better goods.

          If one assumes people under ideal socialism are entirely altruistic, then it is only fair to make the same assumption under ideal capitalism. Moreover, the free market isn’t dependent on altruism and it functions even when comity is in short supply. Socialism always fails, in theory and practice, because it is fundamentally opposed to human nature; people are hard wired to respond to self interest and to incentives.

The Morality of Socialism Compared to the Morality of Capitalism

        Comparing results to results is no contest; capitalism wins hands down. But when comparing ideal to ideal, capitalism also wins because, if people act altruistically, the incentives of capitalism produce greater prosperity. Socialists distort by comparing an idealized version of socialism to non-idealized capitalism and by assuming people act selflessly under socialism but selfishly under capitalism. What if we compared ideal capitalism to socialism as actually practiced – with its mass murders, brutal dictators, starvation, grinding poverty and human desperation as in say, Venezuela?

        Capitalism, non-coercive cooperation in markets, is also superior morally. People succeed only by providing goods valued by their fellow man. The most potent force on earth is a consumer armed with a free choice; even a large corporation can’t force anyone to buy its products. The political corollary of socialism is tyranny and it inevitably results in starvation amidst plenty; there is nothing moral about that.

Next: Hotel Europe – you can check out any time, but you can never leave.

Capitalism and Pope Francis

George Noga
Capitalism is not moral because it works; it works because it is moral.
Capitalism and Pope Francis
By: George Noga – September 9, 2018

       As someone born Catholic, who attended parochial school and was observant much of his life, I take no pleasure in this posting. But Pope Francis is astoundingly callow and ignorant of even elementary economic concepts. Because 1.25 billion Roman Catholics (1 of every 6 souls on the planet) look to the Pope for enlightenment, it is important to set the record straight. Go to our website www.mllg.us to see our related March 13, 2016 posting entitled “Pope Francis Enters the Twilight Zone”.

      Recently, the Pope (directly and via Vatican pronouncements) has criticized capitalism for, inter alia, consumerism, fossil fuels, environmental harm, materialism, lack of charity, speculation, seeking profit, promoting individualism, harming the poor, credit rationing, injustice, legal tax avoidance and credit default swaps. He advocates more government intervention, regulation, politics, taxes and central planning.

        If you missed it, read the September 2nd post on our website. It reports capitalism cutting extreme poverty in the world by 75% and lifting 1.2 billion humans out of the grip of poverty in the past 25 years. Every day, capitalism raises 135,000 more living, breathing people out of extreme poverty. Again thanks to capitalism, every metric of human well being is improving. Capitalism has produced a cornucopia of wealth and is the greatest human success story of all time for the common man. Yet strangely, there is never any mention of this economic miracle by Pope Francis – only vitriol.

         Capitalism is effective and also moral. A market economy is based on voluntary transactions in which both parties benefit; that’s why, upon concluding a transaction, both buyer and seller say “thank you”. Capitalism is peaceful and non-coercive; it channels human nature and self interest toward the common good. Capitalism is a positive sum game since both parties win in all transactions; there are no losers. The most powerful force on earth is a consumer armed with a free choice and even the biggest and most powerful corporation cannot make someone buy its product.

         There is space to address only a few of the Pope’s naif criticisms. Nations must be wealthy (capitalist) to be good environmental stewards; the worst degradations of all time took place under the commies and now are  being cleaned up by capitalists. The Vatican labels credit default swaps “economic cannibalism that profits from the misfortune of others“. Such swaps are merely insurance against defaults and make it easier for poor countries to borrow. The Pope condemned derivatives and speculation, both of which make markets more orderly and especially help third world agriculture.

          Pope Francis doesn’t grasp that squandering trillions for uncertain, infinitesimal climate benefits means the money cannot be spent now to alleviate suffering from unsafe water, malnutrition and lack of electricity and medicine. The last thing a poor child in an African slum needs is a solar panel. The Pope has called money “the dung of the devil” – no riposte needed. Capitalism doesn’t cause consumerism; it responds to it. If consumers demanded more bibles, the market would instantly supply them.

        The Pope is concerned for the poor but attacks the greatest anti-poverty engine in human history. Poor countries suffer due to insufficient capital; wealth must be created before it can be shared and private charity is much more effective than government redistribution. Pope Francis said building a wall is “unchristian”. Is the US unchristian for creating great wealth amidst liberty and becoming a magnet for emigrants?  Or, are socialist nations unchristian for creating great poverty, stifling liberty, fomenting civil unrest and making life so miserable that their people desperately flee their homes?

        Capitalism is not moral because it works; it works because it is moral. Capitalism has achieved, and continues to achieve, miracles that in earlier ages could only have been ascribed to the gods. However well-meaning Pope Francis may be, he fails to understand the morality of free markets and the immorality of statism and collectivism.

Our next post on September 16th addresses reality and denial in America.

Celebrate Capital Day 2018

George Noga
“The achievement of capitalism is not to provide more silk stockings for princesses but to bring them within reach of the shop girl.” (Schumpeter)
Celebrate Capital Day 2018
By: George Noga – September 2, 2018

       This Monday, let’s celebrate capital along with labor. Labor is a noble activity but capital puts labor on steroids by making it more productive. The natural condition of mankind is, and always has been, poverty. Therefore, we should not be asking what causes poverty, but what causes wealth. The answer to that question is capitalism.

       Paleolithic fishermen worked incessantly spearing enough fish to survive until one nascent capitalist thought of a net. Since he had no capital, he worked longer hours for months to accumulate enough extra fish (his capital) to give him time to construct a net. He then generated a surplus of fish to trade for other goods. His capital investment made him wealthier than others but it also made everyone else better off. The same is true of the capitalists who founded Wal-Mart, Amazon, Apple and Microsoft.

        Per the World Bank, capitalism has cut extreme poverty by 75% in just the past 25 years, equal to 1.2 billion human beings with an additional 50 million being lifted out of poverty each year. Each day there are 135,000 fewer people in poverty. Today less than 10% of the world’s population lives in extreme poverty and it could end within our lifetime. This is by far the greatest economic success story of all time. For the average human being, the world has never been a better place – thanks to capitalism.

        Americans are ignorant of the dramatic progress against extreme poverty. Surveys have asked if, over the last two decades, extreme poverty has doubled, remained the same or halved (the correct answer). A staggering nineteen out of twenty (95%) Americans get it wrong. The only plausible explanation is media ignorance and bias. Despite capitalism stamping out poverty and vastly improving the human condition, it is widely condemned – even by the Pope. Why all the criticism?

  •      Capitalism is perceived as flawed because it hasn’t solved every human problem. In fact, capitalism is purely an economic system and most of the things for which it is criticized (wealth distribution) are political rather than economic issues.

 

  •       An ubiquitous critique is that capitalism is based on self interest or greed, if you insist. Like it or not, greed is an inseparable part of the human condition. The genius of capitalism is that it channels greed into incentives to serve your fellow man. Greed is just as endemic under socialism but it is channeled toward destructive ends.

 

  •       The practice of capitalism always is compared to the theory of socialism; this is a wholly dishonest comparison. If actual results of both systems are compared, capitalism triumphs handily. If the theories of both systems are compared, capitalism again wins because socialism is contrary to human nature and it never can succeed.

 

  •       Leftists, academia and the media are infatuated with socialism even though in 10,000 years socialism (and its cousins) never has succeeded in any group bigger than a family, clan or tribe (about 25 people) in which familial bonds supersede economic interests. How many more Venezuelas must there be before they learn?

      Capitalism has created a cornucopia of wealth unprecedented in human history. Extreme poverty is being eliminated; every metric of human well being is improving. Even inequality is shrinking as the poor are getting richer at a much faster pace than the affluent. Average folks live better than monarchs a few decades ago. Luxuries a short time ago are selling for ridiculously cheap prices at Wal-Mart and Costco.

        Not one of these miracles was created by government or socialism. Who has done more to benefit the common man – Henry Ford, Steve Jobs, Sam Walton or any king, president or commissar? America is the bastion of capitalism; tomorrow, let’s celebrate capitalism and the capitalists who had a dream and the will to accomplish it!

September 9th we blog (reluctantly) about capitalism and Pope Francis.

Destroying the Link between Capitalism and Wealth

George Noga
If  capitalism and liberty lose the culture war, it will be because Americans have lost the link that brought us our unprecedented cornucopia of  wealth.
Destroying the Link between Capitalism and Wealth
By: George Noga – March 11, 2018

      This is the second and final post seeking to answer the question: Does capitalism sow the seeds of its own destruction? The first part is on our website: www.mllg.us. This question first was posed 100 years ago by economist Joseph Schumpeter. We will conclude by comparing Schumpeter’s predictions with where America stands today.

       We are engaged in a great culture war for the preservation of capitalism along with wealth and liberty, which are symbiotically linked to capitalism. If we have capitalism, we ipso facto have liberty and wealth. Without capitalism we become poorer and less free, while under socialism we are impoverished and tyrannized; think Venezuela.

     How bad is the anti-capitalist mentality? One poll showed 4 out of 10 US adults preferred socialism to capitalism. A YouGov poll asked if respondents had a favorable view of capitalism or socialism. With Democrats, it was tied at 42%; millennials chose socialism 43% to 32%. In a Gallup poll, 47% of respondents reported they would vote for a qualified socialist for president; 69% of those ages 18-29 said they would. Of  millennials, 58% would rather live under socialism than capitalism. In a Politico poll, Democrat voters in every age group, gender and race said they liked socialism.

     Unsurprisingly, few people, especially millennials, understand what capitalism, socialism or communism really is. Large majorities conflate European social welfare states with socialism. They particularly believe Sweden is the model of a successful socialist country. Read our October 15, 2017 post “Socialism and Sweden” on our website; it shows Sweden as a free-market capitalist country. Liberals and millennials it seems are not only brainwashed but ignorant. Perhaps they can spend their next vacation in Venezuela, Cuba or North Korea to see real socialism at work.

Let’s revisit Schumpeter’s prediction, which contained five sequential points.

  1.  Capitalism will create great wealth. This has come true to an extent few dreamed.
  2.  More people will be educated. Again true, in America education is universal.
  3.  Professors and teachers will promote anti-capitalist ideas. BINGO!
  4.  People will vote for social welfare states. Already true  as shown by polling.
  5.  Capitalism’s success brings about its own destruction. This hangs in the balance.
     Schumpeter feared the demise of capitalism, along with wealth and liberty, would usher in a new dark age and we may have to wait centuries for the reemergence of capitalism and liberty. If Schumpeter’s final prediction comes true, we will drag the entire planet into a lengthy and unspeakable Orwellian torpor where men lead lives of quiet desperation, where war is peace, bad is good, immoral is moral and big brother always is watching. Nowhere is it written that liberty will survive.
My March 18th post is mega special; hint: it is my 75th birthday!