On a trip to Cambridge England before the Covid-19 breakout, I saw young university students carrying signs that read “No More Capitalism!” At the time I chalked it up to the zeal of youth looking for something to do on a slow Saturday afternoon. However, what started out as placards and protests is now seeping into mainstream thought as we more frequently hear about “rethinking capitalism” or “the next stage of capitalism.”
Fact: Capitalism is the reason we have our nifty Apple iPhones and we have been able to generate so quickly a vaccine to battle COVID-19.
Let’s face it, capitalism can be ugly. Good companies may survive and thrive and create a billionaire once in a while (actually, very rarely), but most companies fail–they just are not good enough to succeed–either because they are managed poorly or their products and services are not wanted or needed by society. Failure is painful. It is not a sitcom or Mr. Rogers Neighborhood where happy endings prevail. Economists even have a word for it: Creative Destruction.
Is it fair that successful capitalists get rich? If a singer performs in front of 100 people and gets $10 per person, is receiving a profit of $1,000 bad? If another singer is so popular that she can sing in front of a million people during a concert season and receive the same $10 per person–$10 million, is that now bad? Should the second singer share more of her $10 with society than the first? Our income tax system says yes.
By our society giving the gifted singer the freedom, financial motivation, and platform to deliver her service, she’s made a million people happy. If we left it to the government to select a singer–perhaps a politician’s niece–would we have such happiness? History has said that government cannot create and deliver most services as well as a free society, even suffering through the ugly process of trial and error.
And speaking of ugly, nothing has been as ugly as the process that the late Steve Jobs used to create the successful iPhone so many of us use and love. He berated, fired, and lied to the people working for him. He was downright mean. His own company even fired him at one point—then later rehired him.
Based on the standards of Mr. Rogers neighborhood, Apple should not even exist. However, through the company’s eventual success and ability to invest their profit in research and new products, millions in the world now live a major part of their lives from the happy result of Jobs’ freedom to be mean, fail, and eventually profitably succeed. No government agency nor country that rejects capitalism was able to develop the iPhone.
Now we come to the vaccine. Our politicians may have government agencies, experts, and lots of press conferences, and even helped fund Pfizer and Moderna for this specific project, but at the heart of it, these capitalistic companies had the ability to develop their vaccine quickly because they were robust profitable companies ready to tackle this project. Their previously profitable operation allowed these companies to hire the best scientists, buy fancy lab equipment, and maintain manufacturing plants that can be readily adapted to make the vaccine.
Nations that control spending through bureaucratic systems were not able to do what Pfizer and Moderna have done. If capitalism were so bad, countries like China, North Korea, and Cuba would have been far ahead of Pfizer. We haven’t heard many breakthroughs coming out of Europe either (AstraZeneca excluded), a continent that parallels our population number, but has more nationalized healthcare.
Capitalism is the process whereby economies are controlled by private owners rather than by the state. It creates wealth and failure because, at its heart, it allows the individual freedom to succeed. It would be a nirvana world, indeed, but wishful thinking about the government running the economy has never worked. It has all it can handle with managing schools and fixing potholes.
In short, if you like making individual choices about what you buy and how you earn income, you’re probably a capitalist.