In recent years we have been witnessing the rise of a trend, which has become more pronounced with the unfolding of the current economic crisis: An ever-growing number of our fellow citizens are becoming distrustful and suspicious of capitalism. As a result, capitalism is being increasingly seen by more and more people as exploitative, unfair, harmful and outright immoral.
Nothing could be further from the truth, however. Rather than a nefarious system that some allege it to be, the free market is in fact the basis and source of our national prosperity. This is because the free-market is the only known economic arrangement capable of generating that fundamental prerequisite of societal well-being: sufficient quantities of meaningful, well-paying jobs.
In his latest online guide The Cure for Poverty, Herbert E. Meyer – a popular lecturer and creator of the best-selling The Siege of Western Civilization – injects a dose of truth and common sense into the current climate of confusion, ignorance and deliberate deception. In this well-timed work, Meyer explains in rudimentary terms how capitalism works, and why it is such a superb engine of prosperity generation.
As Meyer points out at the outset, capitalism disperses its benefits through the efforts of entrepreneurs. But contrary to what many think, most entrepreneurs are not high-rolling financiers or industrialists. An entrepreneur is “anyone who launches any kind of business whatsoever – who sells goods or services and who doesn’t have an income until someone purchases these goods or services.”
Most entrepreneurs are just regular people we meet every day such as “that man down the street who opened a new auto repair shop last month… the woman who stopped by your house yesterday to see if you might be interested in buying some of those fancy cookies she’s baked, or that couple you hired last month to paint your house.” The boy next door who mows your lawn is also an entrepreneur and so are farmers, gas station operators and dentists.
While it is true that some entrepreneurs – like Bill Gates and Steve Jobs, for example – become very wealthy, most don’t. But even though they never become rich or famous their activities bring about a tremendous social benefit – they create jobs:
In the last 25 years here in the United States, more than 30 million businesses have been started… Most of these businesses are still operating, some have gone out of business – and a few have grown so large and successful that the entrepreneurs who started them are famous and their companies are household names. And in the last 25 years these companies, together with all the older businesses in our country that started in precisely the same way as these companies started, have created more than 95 million new jobs for all of us.
This number is significant for several reasons. To begin with, US businesses have provided American families with the incomes to buy things they need and want, while at the same time providing an abundance of affordable products and services that make life in America so comfortable when compared with other places. We enjoy the highest standard of living thanks to the phenomenal performance of our free-market sector, which is freer, larger and more robust than that of any other country.
To put it another way, the material well being of a society – be it American or any other – is directly correlated with the degree of capitalism it allows in its economic sphere. The more capitalism a country has, the greater its affluence and vice versa, which is why free-market economies are far more prosperous than their centrally run counterparts. This is not a matter of argument or dispute; it is simply a matter of fact. One only needs to look at countries such as the Soviet Union, Cuba and North Korea on one hand and the United States, Australia and Ireland on the other.
The challenge, then, is to create an optimal environment for the free market to flourish. Although not all capitalist societies are configured along the exactly same lines, Meyer notes that all share a set of basic characteristics including “the rule of law, a modest level of taxation, competent regulation, and a government that protects its citizens by assuring the country’s defense while doing the everyday things a government is supposed to do, such as building roads and bridges, operating schools, and delivering the mail.” Meyer likens the sum of these conditions to a kind of free-market “atmosphere” conducive to the flourishing of capitalism.
But how do we maintain that favorable atmosphere? It is here things get tricky. This is how Meyer frames the challenge:
Because the free-market “atmosphere” that entrepreneurs require to survive and flourish is political and economic – rather than chemical, like the Earth’s atmosphere – there’s no one formula that any competent technician can look up in a textbook and then follow. Maintaining this “atmosphere” – monitoring it constantly and making the adjustments needed to sustain it as political and economic conditions change -- is as much an art as a science. It takes a combination of technical knowledge, hard work, vision, and that unquantifiable “gut feel” for what to do and when to do it.
Many readers will begin to worry once they realize who carries the ultimate responsibility for ensuring the smooth functioning of the free-market enterprise: “It’s the responsibility of our government’s leaders to get this combination right. Simply put, maintaining an ‘atmosphere’ that will result in more and better jobs is largely what we elect our government’s leaders to do.”
The obvious problem with this is that in recent years we have been electing leaders who have neither interest nor knowledge to maintain the right free-market atmosphere. There could be no better evidence of this than the latest “stimulus” bill, which stands our whole capitalist system on its head by seeking to designate government as the final guarantor of our national prosperity.
Ralph Waldo Emerson once said that every generation must bring God down to earth. Emerson correctly observed that overtime people tend to lose sight of foundational truths and that in order to maintain the right perspective we must be periodically reminded of them. Emerson’s adage is also applicable to our current situation, for it is obvious that we as a nation have lost view of fundamental economic maxims and are going astray as a result.
The Cure for Poverty could not come at a better time. A primer on capitalism, this timely treatise reminds us in clear terms what accounts for this country’s affluence and prosperity. Those concerned about its future would do well to read Herbert Meyer’s free guide and ponder its basic but timeless truths.