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  • How Capitalism Makes Us Richer

    Listening to some politicians recently, you’d think capitalism benefits only those on Wall Street, not Main Street. Yet the benefits of capitalism have proven over history to benefit all of society.

    The heart of capitalism is the private ownership of property. Without free enterprise, individuals would not be able to have the opportunity to own economic resources and compete in the marketplace. Capitalism provides valuable goods and services, rewards hardworking people and initiatives, creates a higher standard of living for all, narrows the gap between the common person and wealthy, and provides opportunity to realize dreams and desires.

    These basic components express the built-in wealth transfer system of capitalism. In some ways, job creation, as well, is ultimately one big wealth transfer — employers hiring workers who spend and invest their earnings, thus becoming wealthier.

    Our friends at The Fund for American Studies have recently produced a video showcasing how capitalism makes us better off through its built-in wealth transfer system.

    TFAS poses the question, “How much would someone have to pay you to give up the Internet for the rest of your life?” Not surprisingly, most respondents could not put a price on the value of the Internet. More than 77 percent of Americans use the Internet, and with Internet access costing just pennies a day, usage is only expected to rise.

    The video features Professor Michael Cox, director of the O’Neil Center for Global Markets and Freedom at Southern Methodist University’s Cox School of Business. He observes that, “The market has created a tremendous gap between worth (how much you pay) and cost.”

    “When a new product comes out we all get in line for it,” says Cox. “The wealthiest people are in the front of the line and they pay the highest price for the worst version of a product.” Take cell phones, for example. In the 1980s they cost $4,000 and were basically a brick with buttons. Today, the going rate for an iPhone 3G is about $40.

    If everyone waited for the product, it would die, so real-life Gordon Gekkos buy the products when they’re expensive. That lets the rest of us enjoy the cheaper, better versions. Innovations like these are a product of the private sector, and exemplify capitalism’s built-in wealth transfer system.

    Our great country was founded on capitalism, where people have the privilege to create wealth for themselves and others through creative enterprise. It is the antithesis of socialism, where government controls and stifles economic growth through unwieldy legislation and taxes.

    Free enterprise has produced in the United States an extraordinary lifestyle. Even in this poor economy, we all enjoy privileges that weren’t available to the world’s wealthiest just a few decades ago. With access to something like the Internet, something that’s worth more than a dollar figure, we just might be richer than we realize.

    Abigail White is in the Young Leaders Program at The Heritage Foundation. Click here for more information on interning at Heritage.

    Posted in Scribe [slideshow_deploy]

    13 Responses to How Capitalism Makes Us Richer

    1. ginger says:

      We are so lucky to live in a free capitalist society! Well said….

    2. CapCon says:

      Love this!!
      Hope this helps those thinking that capitalism and very wealthy people are what's causing our problems.
      Might be an idea to leave a link to another such video that explains what is really causing the problems that they blame on capitalism, while this is still fresh in their minds?

    3. Wingnut says:

      Hi. Actually, the constantly inflating price tags (indentured servitude requirements) on survival goods… put there by capitalism and economy usage in general… has placed about half of the USA (lower half of the pyramid scheme)… in gruesome fear for survival. You know it, I know it, the dog knows it. Just like the childhood pyramids we constantly failed-at in the playgrounds, capitalism's pyramid scheme will also flop. It comes from using competitive (rat-racing) systems. (Too many trying to get a leg up – gets top-heavy and crushes those on the bottom). Try cooperative (flat, equal, fair to non-racers) systems instead.

      • Amazed says:

        So, you're espousing socialism? Look how well that has worked out in other places.

        • Wingnut says:

          Hi. Communalism. Moneyless, ownerless, price tag-less… much like the commune used by the U.S. military and USA public libraries. No money, no ownership, requisition forms for necessities, luxuries in repositories for all to share equally, just like the military (rec services). Government OF the people… so there isn't any US vs THEM wars. Big government? You bet. Everyone is a member. Take down all borders… national, state, yard fences, ownership/trespassing locks/titles. Use cooperation, not competition.

          How much fear for survival due to lack of basic survival goods… do you see amongst military members? None, right? At least quite rare. How's the distrust and robbery levels with military members? Almost none. Plus, they are all on the same team and help each other get down life's trail. Now, how much fear for survival do you see amongst civilians/capitalism? Rampant. How much distrust and tug-o-warring over ownership of Earth creator-made things and capitalism-invented money on the civilian side? Mega-tons.

          Not a single other living creature on the entire planet… uses economies (money, ownership, price tags). Why do capitalists? Why did they buy-into racing/pyramids? Why are USA 18 year olds forced to join the competer's church, OR STARVE/OR ELSE? That's felony extortion and forced religion!

          Keep in mind that there's not just two sides to things. Elimination of capitalism does NOT necessarily mean adopting the programmed-into-you fear of the Soviet Union that you have labeled socialism or communism. There's Christian-like communalism, too…. where folks DON'T race over things… but instead love each other and work for TEAM… voluntarily. The hippies had it right all along, but nobody took their way of life seriously, and pyramiders should have. Again, there are more sides to issues than up/down, left/right, black/white, us/them. There's more choices than JOIN THE FREE MARKETEERS, or STARVE. There's also finding the thing/cause that created only two choices, and eliminating it… so more choices are available. Are we in the USA offering our 18 year olds… the choice to join the cooperator's church? No. Let's fix that. Thanks for the comment.

          • Rick says:

            I think we as human beings can deal with communal cooperation up to a certain number of people. Afterall, many of us share what we have with our own family. We can share and cooperate when we know the people involved – a small tribe, maybe even up to 100 people. Get much bigger than that and altruistic cooperation will fall apart. It's just not in our nature. Better to understand our nature and work in a system that takes advantage of that nature, than to think that somehow we're going to change into some different form of life.

      • Rick says:

        "in gruesome fear for survival"
        Have you ever visited a real third-world country – seen the real poor in this world? A comment like that indicates you haven't any real idea what real survival means for billions outside the USA.

        • Wingnut says:

          Rick, I have seen some things, and it hurts my heart beyond description. Notice I DID say take down the national borders. No more US/THEM. But the way the laws currently flow, its best that the USA lead by example. Hopefully, everyone will climb aboard the communalist hayride with more fervor than they/we climbed aboard the capitalism one that's headed off the cliff. Comunalism/Christian-ish-ism SHOULD seem much more appealing, because it has strict fairness laws that are well-enforced by ALL of us unfairness police. Look at the USA military. It seems… that everywhere ya turn, there are regulation-quoters… which might be akin to tribal elders who are always at project sites… spewing advice and precautions and experience, especially in proper use of mankind-custodianed tools. We would become more loving in our "correcting". Jails would be more "love thy team" schools than lockups… just like the jails on local military bases. And with this many people on the planet, computers will be VERY important to resource/inventory management. After all, WE will need to track the location of every single mankind-custodianed object on the entire planet, or at least in the USA. Custodians are everything, but these new type of forward-supply-point "owners" have to follow certain rules as far as sharing… because EVERYTHING belongs to "team". I'm sorry to break it to the capitalism pyramiding/racing users, but it HAS TO change into communalism. We have no choice… if mankind wants to survive.

          I've wandered way the heck out into the swamps. Sorry. Yes, Rick, since mankind only advances as fast as its slowest-advancing portion, then we all know where our #1 communalism priority lies. Stopping the preventable deaths/pain, worldwide. Fairness for all. That's what "all for one, one for all" teaming is all about. We know we're capable of it, because we see treehouse teaming happen amongst a pile of dads all the time in America. Get one crazy seriously-enthusiastic spearheader with a dream… in the neighborhood, and a fantastic shared treehouse can get built, using no wages, no bosses, no arguing, lots of caring and contributions, and pats on the back with great fellowship afterwards… for a job well done. And it was fun as heck!

          I think humans LIKE to be included and integral, even for free, when the worksite is a blast. I think its time that we ALL, REALLY… become "civilized". Just follow the USA military… they/we have much of the things that the civilian side will need, already figured out. Step one, get fair and stop racing. Racers ALWAYS win at racing, but don't forget about the ones who hate racing, or can't race… such as kids, elderly, anti-caps, and the downtrodden… everywhere. Thx, take care.

          • Patriot Act says:

            Wingnut, in all candor, you seem like a nice and well-intentioned person, but the idealism you bestow on your visions of "communalism" utopia (like it or not, the correct term is "communism") are at best naive and at worst deadly. Socialism/Marxism has failed everywhere it's ever been tried because it neglects to take into account two critical ingredients: human nature.

            No matter how hard you try, it is impossible to have a governing authority assign equal wealth and privileges for every member of a community. The reason for this is simple… In any given community, there are always going to have members who are more ambitious, entrepreneurial, hard working, and self-disciplined on one end of the spectrum and other members who are more lazy, unmotivated, careless, and feel a personal sense of entitlement on the other end. As a result, members of the former camp will ultimately become angry and resentful over having to pull the wagon for themselves AND for the members of the latter camp while receiving no additional compensation or rewards for doing so. Instead, both camps continue to receive the same amount of wealth doled out by a higher authority even though one camp is doing the lion's share of the work for the entire community! Eventually socialism/Marxism fails because there is no incentive to work or better oneself and therefore fewer and fewer people are left with the increasingly burdensome task of pulling a titanic ship of self-insufficient community members who simply live off the system until the entire system inevitably collapses.

            The beauty of capitalism is it rewards those who use their own free will to seize opportunities, work hard, take risks, and invest their own capital to produce a product or service that their fellow men and women want, need, and desire. It creates jobs for other people who then earn their own money and can purchase products to help make their own lives and their families lives better. That money they spend helps keep businesses running and they can in turn hire more people.

            In the process, capitalism creates a rising tide that lifts ALL boats. It's no accident that the United States of America has the RICHEST POOR PEOPLE in the entire world. You take a look at the average "poor" family in this country and you'll find that the vast majority of them have at least one car, a refrigerator, cell phones, a flat screen TV, a computer, cable TV and Internet access, X-Box systems for the kids, etc. etc. You can thank capitalism for creating and constantly elevating such a high standard of living in the U.S. that the vast overwhelming majority of people in other parts of the world don't enjoy!

            By the way, I'm afraid your frequent reference to the U.S. military as being the ideal "communalism" environment is flawed. First off, joining the military is a CHOICE. It's structure and culture are only imposed on those who voluntarily wish to partake in military service for their country, not on an entire community as a whole. Second, there is a clear hierarchy of power and privileges within the ranks of the military. For example, a Marines Corps private does not enjoy anywhere near the same wealth, compensation, and privileges as an Air Force general. However, a Marine Corps private who works hard, pays his dues, and achieves a certain standard of success can eventually be promoted to a higher rank and enjoy the increased wealth and benefits that comes with it… Just like in any good capitalistic or corporate structure!

            • Kate says:

              Socialism and Marxism are not the same thing. Marxism implies a naturally occurring revolution where the working class are in control of the government. The only country actually employing the Marxist ideal is Norway, and you can't say that system hasn't worked there. It's why IKEA now employs Americans as cheap labor.

    4. Wingnut says:

      Don't be censoring now, kids. Let the comments roll on thru, even if they ARE counter to your org's agenda. One of mine seems to have vanished.

    5. Glen says:

      These are the people that our Gov't wants to tax more. Then they would have less money to buy new inovations. Sometimes our Federal Gov't is too smart for its own good.

    6. Rick says:

      Internet is cheap, but high value. Hmmm, how strange. How much would I have to pay you to give up oxygen? How much does oxygen cost you?

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