A World of Wealth: How Capitalism Turns Profits
Into Progress
By Thomas G. Donlan
(FT Press, 215 pages, $24.99)
This summer’s declining dollar and spiraling gas are driving
cost-cautious Americans seeking an international vacation to find
it at Disney’s Epcot. The fact that this abroad is at home makes it
no more unreal than its basic premise. Epcot distills ten foreign
“countries” into a cavalcade of Kodak moments. Of course, no
country looks, let alone functions, like this. What makes a working
and thriving society is not so picturesque. But it is productive
and by altering that variable raises or lowers the standards of
living for its citizens — regardless of its appearance to
visitors.
It is appropriate as many Americans turn to Epcot that we stop
and consider how America itself is turning into Epcot. As we give
greater license to our ever more sensitive sensibilities, we
continue to strip away the working parts that produced America’s
prosperity. And by relegating them to other nations, we make them
more competitive and ourselves less so.
These concerns are provoked by A World of Wealth, a
recent book by Tom Donlan, editorial page editor of
Barron’s. The book’s thesis is straightforward: capitalism
is the most direct route to prosperity. An accessible exercise of
applied economics, the book reminds that capitalism remains the
pinnacle of economic creativity. The more fully it is permitted,
the better off the economy functions and the nation and its
citizens live. Instead of something for which even many of its
practitioners feel compelled to apologize, Donlan prods us to
applaud.
Going through an Epcot-array of national problems, ranging from
the environment to health care, he convincingly argues they result
from market failure — i.e., a failure to allow markets where they
could, or could better, exist. In each case it is to America’s
detriment they do not. And in each case higher prices, lower
supply, and diminished quality result.
TAKE ENERGY PRODUCTION, particularly energy extraction. America has
hamstrung itself by rejecting its own resources. What is a natural
resource under the ground is perceived by some to be a natural
disaster above it. So while we partake, we won’t produce — leaving
others to sully hands and conscience. Similarly, nuclear power’s
potential as a nonpolluting energy source is undercut by the U.S.’s
decision to prohibit the reprocessing of spent fuel rods. “The
quantity of dangerous waste would be substantially reduced, and the
amount of energy extracted from a given quantity of uranium ore
would be substantially increased.” In both cases, self-imposed
limitations equal less energy and higher prices.
The same problem applies more broadly to manufacturing.
Blue-collar jobs, much lamented in theory, are disdained in
practice. Seen as too polluting, too unsophisticated, too low tech,
too unskilled, and producing too low a wage, we have created a
regulatory environment that forces these jobs abroad. Their
exportation is blithely rationalized as due to less developed
countries’ lower wages. However, we fail to examine our role in
raising America’s labor costs. The fact remains, every U.S. job
sent overseas was competitive…right until it left.
Indicative of this problem is the “living wage” phenomenon so
beloved by the Left. Claiming to be in low skill workers’ best
interests, it actually denies them the opportunity to enter the
work force at wage rates that make their skills competitive and
then acquire skills that could make their labor more valuable.
These jobs are liberally swept away and the low skilled into
unemployment.
ALL OF THESE ELEMENTS are the price of the increasing preciousness
of political correctness. Activities deemed offensive by our
liberal elite are farmed out to less developed nations, which are
allowed to engage in these “unsavory” endeavors in a sort of global
caste system. The NIMBY (not-in-my-backyard) irony is that by
relegating these jobs abroad, they go to countries with laxer
environmental and labor standards. The net effect is increased
costs at home and lower overall environmental and labor
outcomes.
What would be environmentally unthinkable today is routinely
pursued economically. While impact on the environment is an
escalating concern, we do not look twice at interference in the
economy. By altering forces that make markets work efficiently,
America runs the risk of making itself a sterile economic
environment.
Fortunately, capitalism works. It is amazingly resilient. It
works better than any previous economic system and it works better
than any system that has sought to supplant it. Its laws still
exert themselves even in the face of the most unfavorable
circumstances. As Donlan’s book explains, and as the current
economic circumstances underscore, we need to seek ways to make
sure capitalism is allowed to do what it does best and with the
least interference possible.
