In Reply to: You'll pick Capitalism will you - CAPITALIST COUNTRIES ONLY PROSPER AT THE EXPENSE OF THE SOUTH posted by Weaver on July 24, 1996 at 20:30:16:
Well, this is certainly some healthy rhetoric. Let's try and stick to the facts, however, and see if we can't hash some of these issues out.Why do free market economies prosper?
Quite correctly, a reader has observed that free market economies do not prosper out of thin air. The most accurate and simple answer is that they prosper due to hard work. But how can this be? Surely laborers in India work much harder than in the US or England. The answer lies in the system of government which both country has selected. India has a quasi-socialist, nationalist government which, at least while I lived there, relied heavily on central planning and extremely heavy (100% to 200% or more) import tariffs to encourage economic self sufficiency. Now, one of the primary goals of any organization is the reduction and elimination of redundancy in order to more efficiently allocate resources. A centrally planned economy takes on a similar goal, as it should theoretically, with the result being a series of monopolies established to meet the country's needs. Clearly, whoever is granted the monopoly stands to do very well for themselves. Politics, money, and human nature quickly become the dominant factors in awarding the monopolies and "the greater good of the citizens" instantly becomes a slogan and nothing more. So in the end, in the absence of competition, state controlled monopolies produce garbage - sandy soap, obsolete cars and trucks, 1950's era television sets - and the average annual income hovers around US$300 to US$500.
Free market competition, on the other hand, leads to more jobs (provided no monopolies are allowed to develop) and higher wages. For example, we don't NEED 37 different brands and varieties of breakfast cereals, but if people actually buy enough of those 37 brands to keep them in business, then everyone wins. The result is 37 different accounting departments, 37 different packaging departments, and 37 different factory floors with 37 different sets of factory workers. Seemingly redundant, seemingly inefficient, but in reality, a diverse industry focused on meeting customer demands and earning some level of profit on investment. Each brand linked by an invisible hand to the other in establishing pricing. Kellogg, for example, was recently forced to cut prices across the board due to soaring competition from store brands and falling market share. So this is not idle theory - this is actually the way it works. My experience in the American economy has so far given me no reason to think otherwise.
As for the idea that the west/north profits by exploiting the east/south, a closer investigation effectively discredits such a notion. How do we explain the Japanese economy? Or South Korea, Thailand, Singapore, Taiwan? Certainly western aid has helped them at different points in the past, but countries such as Pakistan and Liberia have received more foreign aid per capita in the last 40 years than all of the above but have essentially nothing to show for it. The answer again, is in the system of government, or lack thereof.
The idea that the west is somehow responsible for the general malaise of underdeveloped countries has some merit, however, due to the fact that Karl Marx and Jean Paul Sartre were both westerners. Western philosophical exports to Asia and Africa in the post world war 2 decades is the primary explanation for economic stagnation and human rights abuse during that period of time.So on that note, I would like to proffer my proposed Seven Pillars of Capitalism:
Freedom of the press
Freedom of speech
Freedom of religion
An impartial and honest judicial system
A culture which places a high premium on honesty and integrity
Low taxation
Government intervention in the economy only for reasons of monopoly prevention, consumer safety, national defense, and of course oppression of eastern/southern countries.And a final warning: Beware those promising utopia, death follows in their shadow.