Polls regularly show that nearly half of Americans prefer socialism to capitalism.
Those folks should take a look south.
According to a new report from the International Monetary Fund, Venezuela’s inflation rate will hit 1 million percent by the end of this year.
This is just one of the many miseries currently besetting the local population, many of whom are now fleeing the workers’ paradise of Venezuela.
The country’s brand of socialism – praised by intellectuals like Noam Chomsky and politicians like Bernie Sanders – has reduced Venezuela from one of the most affluent nations in Latin America to one where ordinary citizens scrounge in dumpsters for food and children die for lack of medical treatment.
How can so many Americans still be deluded about the supposed charms of socialism?
Some blame public education, arguing that people simply aren’t aware of socialism’s long history of failure.
But many Americans also lack a fundamental understanding of what capitalism is and how it works.
Instead of seeing it as a great creator of peace and prosperity, they view it as an elitist system that enriches a few at the expense of the many.
Nothing could be further from the truth. But it takes a bit of explaining to understand why capitalism is our greatest problem solver.
In 1900, for instance, residents of foul-smelling London and New York worried that they would soon be buried in manure from horse-and-buggies. Yet the invention of the automobile made that fear obsolete.
In the first half of the 20th century, Americans routinely died of polio, measles and rickets. New vaccines and medicines eradicated the problem.
In the 1970s, experts claimed that the “population bomb” would generate worldwide mass starvation. Yet – while the population more than doubled as predicted – advances in farming methods, fertilizers, storage and transportation more than met the demand for cheap and reliable food.
Just five years ago, experts warned about our “addiction” to foreign oil and predicted we would soon run out of fossil fuels.
Yet new technologies – like hydraulic fracturing and horizontal drilling – have allowed us to tap formerly unreachable reserves and create a new energy abundance instead.
How was all this possible?
Because people like you work, save and invest their hard-earned capital to earn higher returns.
Without access to capital, ideas stay on the drawing board. Dreams remain unfulfilled.
But investment capital fuels innovation. It is the lifeblood of the economy, ensuring our prosperity.
And free markets don’t just foster good ideas. They actively combat bad ones. Capitalism is hostile to high costs, inefficiency, wastefulness, middlemen and rent seekers.
“Sure,” a friend countered recently. “Capitalism is great if you’re the capitalist. Just like communism is great if you’re a bigwig in the commissar. But most don’t benefit.”
He’s dead wrong – in two major ways.
While it’s true equities are disproportionately owned by the wealthy, a 2016 study in Tax Notes found that half of all domestically owned corporate shares are in individual retirement accounts and pension plans – the nest eggs of working Americans.
Anyone who invests in a stock fund in their 401(k) is a capitalist, even if they don’t realize it.
However, men and women who own no equities whatsoever are also huge beneficiaries of capitalism.
Companies knock themselves out night and day to create products and services that are better, cheaper and longer lasting.
Corporations deliver instant communications, lightning-fast computers, safer transportation, lifesaving drugs and medical devices, and countless products that allow us to live longer, healthier, safer and richer lives.
Too many take this for granted. Or are ignorant – or dismissive – about how it happens.
Ask friends and neighbors what a teacher does and they will say “educate kids.” Ask them what a doctor does and they will say “heal the sick.” But ask them what a businessman does and they will say “make money.”
Do doctors and teachers not get paid for their work? When they say businessmen “make money” are they suggesting they all work at the mint?
Or do they not realize that businesspeople are indispensable to meeting all our wants and needs?
After all, it’s businesses – not government agencies – that create smartphones, social networks, Ultra HD TVs and pumpkin spice lattes.
We all benefit.
Critics are wrong when they claim capitalism is driven by greed. (You can be the greediest person on Earth and no one will give you a dime until you offer them something of value.)
It’s driven by creativity and the desire to solve problems.
Everyday transactions – like buying groceries or putting gas in your car – are just as much a part of the capitalist system as United Airlines placing an order with Boeing.
Americans are all capitalists.
As a result, our life spans are longer. Our living standards are higher. Our prosperity is greater.
Capitalism enriches us all – not just a few.
Ask any Venezuelan.