Why people are wrong about capitalism

Although I am a libertarian myself, I have spent most of my time around the liberal left. Not just liberals per se, but hard-core liberals. The thing about it that allows me to keep my sanity is that I am able to know what the other side is thinking. There are many things that come out of the mouths of these friends that I find to be inaccurate, and I would like to spend time in this blog discussing what they are. This is not to say that I find my friends to be unintelligent, just misguided. One that I find to be the most egregious is the myth that capitalism is bad for the poor. The reason people make this argument is because they believe capitalism is holding people down in developing countries, and only allowing the rich to get richer at their expense. This belief exists because it is thought that when a trade occurs, one party wins and one party loses. The reality of the matter is that the trade would only take place if both parties believe they will benefit. This is the reason why the capitalism myth has been debunked time and time again. Johan Norberg, a native Swede originally on the anarchist left, who is a currently a senior fellow at the CATO institute has written a fantastic book that was translated into English in 2003 called, In Defense of Global Capitalism. In this book he describes, using myriad examples, how prosperity has come to the developing world through economic liberalization and free trade; thus showing that not having capitalism is what’s holding down the poor. Global capitalism allows the free flow of goods, giving people in other parts of the world more options to choose from, as well as a chance to sell what they have to the rest of the world in order to make a profit. The problem with relying on extensive government control is that we are relying on bureaucrats instead of ourselves, and what it is that we need and want. This is not to say that we don’t need government in our lives, we just don’t need them limiting what we can buy and sell in the free market. As I said before, the beauty of capitalism is that nothing is forced; it is all done through trade. For example, I trade fifty dollars each month to have cell phone service, just as someone else may trade their labor for a certain agreed upon sum of money. All in all, capitalism is a system that allows us to trade for the things we want without interference; making each party better off than they were to begin with. I recommend reading Johan’s book to get the whole story, but if time is a factor for you, he does give a good summary in his article, An Unequal distribution-of Capitalism.