November 17, 2009
“History suggests that capitalism is a necessary condition for political freedom”
~ Milton Friedman
November 10, 2009
Jon B. Alterman, Director of the Middle East Program at the Center for Strategic and International Studies, reviews Vali Nasr’s new book, Forces of Fortune: The Rise of the New Muslim Middle Class and What It Will Mean for Our World:
Vali Nasr’s new book, Forces of Fortune, was written largely in the exuberant phase of Dubai’s story, but it is being published in a more sober time. It reflects some of the old enthusiasm for the notion that “the Dubai model” — a multiethnic, capitalist society insulated from violence and ideology — could save the Middle East from a downward spiral of intolerance and political extremism. Nasr’s overall conclusion — that the triumph of free markets in the Middle East “will pave the way to the decisive defeat of extremism and to social liberalization” — is sympathetic to the Dubai experience. “If that battle is won by private-sector business leaders and the rising middle class tied to them,” Nasr argues, “then progress with political rights will follow.”
This is not merely a book about Dubai, however. It is a book about the enduring promise of Dubai, the struggles of Iran, and the success of Turkey. Bolstering these cases with brief studies on Egypt and Pakistan, Nasr suggests that where capitalism flourishes, so, too, do tolerance and moderation. He also thinks that the resurgence of Islam is promising rather than threatening. Judging that the tide has turned against extremism, he views middle-class religiosity as a path through which Muslim communities can integrate with the rest of the world. In Nasr’s words, “This upwardly mobile class consumes Islam as much as practicing it,” seeking to embrace modernity on Muslim terms rather than rejecting it as a form of corruption. The old populist dogmas that focused on injustice and encouraged resistance are waning. Consequently, resources poured into bolstering liberal ideals in Muslim communities merely feed the culture wars, Nasr cautions. Instead, “The key struggle that will pave the way to the decisive defeat of extremism and to social liberalization will be the battle to free the markets.”
November 9, 2009
“Business, especially big business, is happy with crony capitalism, franchised monopoly, or any other device that will avoid the Darwinism of the free market. Of the billions of dollars now spent lobbying, almost none supports the free market as a concept or an institution.”
~ Luigi Zingales
November 5, 2009
While I believe Keynesian economics to be both flawed and immoral, John Maynard Keynes gives a very chilling account of how inflation can destroy a capitalist system.
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.
Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
November 3, 2009
“Capitalism is relatively new in human history. Prior to capitalism, the way people amassed great wealth was by looting, plundering and enslaving their fellow man. Capitalism made it possible to become wealthy by serving your fellow man.”
~ Walter E. Williams
October 24, 2009
I believe our free market system works best when it rewards hard work.
~ President Barack Obama
This is rather redundant. Capitalism works by rewarding hard work. Self-interest and incentives are at the foundation of any free market system. True, there are times when the market fails to reward hard work – but these instances are, by an overwhelming margin, caused by government intervention in the market. When any one group gains unfair advantages in the marketplace, it is normally because the government has intervened on their behalf. Throughout U.S. history, various groups have gained unfair advantages in our society which they have used to violate the rights of other groups. Corporations have gained coercive monopolies by which they have exploited consumers, workers have possessed unnatural influence over their employers, one race has oppressed another, and so on unto near-infinity. But in all the above-mentioned cases, it has been the hand of government that allowed these various groups to gain their power. It is government that has mandated utility monopolies, allowing companies to operate without competition and to exploit their customers. It is government that has shackled companies with anti-trust laws but allowed unions to engage in the type of collusion that has bankrupted entire industries. It is government that gave whites the authority and the power to enact Jim Crowe laws in the South. When the free market fails to reward hard work, it is not due to an inherent fault in capitalism. It is due to government intervening with force on behalf of a particular group, instead of protecting individual rights and thus protecting the free market and clearing the way for freedom, equity, and prosperity.