The American Spectator

Economics

Obama's Rock Is Not Capitalism

By Brian Wesbury from the June 2009 issue

(Page 2 of 2)

A fair analysis of current troubles would never put the entire blame on capitalism. What's more, our financial problems today are no worse than those of the 1980s and 1990s, when roughly 3,000 banks failed. But for some reason, perhaps the recent decades of prosperity, the American people seem very vulnerable to a downturn. While 8.5 percent unemployment is painful, it is hard to fathom how anyone can believe that it signals a complete breakdown of the capitalist system.

Second, the American system of free market capitalism has been exponentially better at creating wealth and raising living standards than any other system on earth. American capitalism is no longer an experiment. This does not mean that human nature has changed. Nor does it mean that capitalism is perfect. But people always tend to think that the grass is greener on the other side of the fence. Thus when problems inevitably occur, it is very easy for people to desire fundamental change. This is a huge mistake. There is absolutely no proof that government allocation of resources lifts living standards.

Third, men's souls are undermined by government. When government assumes responsibility for creating jobs or providing retirement and health care, some people are encouraged to stop taking care of themselves. When people count more on government, they lose sight of God and start taking personal responsibility less seriously.

Socialism is like sand. It promises more than it can actually provide. Government allocation of resources undermines the human condition. Why work hard, innovate, or create when success has limited reward? And why work hard or innovate when lack of success has little consequence? A socialist system also provides its leaders ultimate power over others that often leads to its gross abuse.

Capitalism, despite its flaws, honors hard work and innovation. As a result, it is like rock. It encourages and allows people to be the best they can be. The capitalist system rewards people who serve their fellow man. Those who provide goods and services to others at low cost and high quality win. Every day consumers vote with their own hard-earned money on which products or services they value. Producers who don't make the grade go out of business, while those who provide what people want continue to prosper.

It is true that some people on Wall Street either abused or appeared to abuse the system in order to reward themselves. But these issues can be handled by creating rules to keep firms from becoming "too big to fail" and to stop the abusive use of stock options.

Clearly this will not be enough for many politicians. While President Obama has not declared socialism better than capitalism, his use of the rock and sand parable from the Sermon on the Mount suggests this is what he believes. Because of its history, America has always run away from this vision.

Our country was founded by individuals who believed in freedom and responsibility. Only time will tell if that is what we as a people still believe.  

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