Andrew Bernstein (www.andrewbernstein.net) is the author of The Capitalist Manifesto (University Press of America, forthcoming next year).
Although leftist agitators continue to protest global capitalism, they overlook the key points in the debate. Capitalism has been instituted on three continents—in western Europe, North America, and Asia. These nations—England, France, the United States, Japan, Hong Kong, and the others—are among the world’s wealthiest countries with per capita incomes in the range of at least $20,000–$30,000 annually. Additionally, even the prosperity of a so-called “socialist” country like Sweden is based on significant elements of capitalism, including Volvo, Saab, and Ericsson, as well as countless private small shops.
But capitalism is not merely the system of prosperity; fundamentally, it is the system of individual rights and freedom. The inalienable rights of individuals are largely protected in these countries. For example, their citizens enjoy freedom of speech, of the press, and of intellectual expression. They have freedom of religion. Similarly, they possess economic freedom, including the right to own property—their own home or farm—to start their own businesses, and to seek profit. These countries hold free elections, and their governments are subject to the rule of law.
By contrast, the noncapitalist nations of the world, past and present, lack both freedom and prosperity. For example, in feudal Europe, before the capitalist revolution of the late eighteenth century, serfdom and its legacy dominated. Peasants were often legally tied to the land and possessed few rights. Commoners, more broadly, were subordinated to the king, aristocrats, and Church, and free thought was punished. Voltaire, for example, was imprisoned for his revolutionary ideas, as was Diderot. Galileo was threatened with torture and Giordano Bruno burned at the stake for supporting scientific theories that clashed with the teachings of the Church. The minds and rights of individual citizens were thoroughly suppressed.
What were the practical results of such repression? Poverty, famine, and disease were endemic during the feudal era. The bubonic plague wiped out virtually one third of Europe’s population during the fourteenth century, and recurred incessantly into the eighteenth. Famine killed sizable portions of the population in Scotland, Finland, and Ireland—and caused misery and death even in such relatively prosperous countries as England and France. According to one economist, economic growth was nonexistent during the centuries 500–1500—and per capita income rose by merely 0.1 percent per year in the years 1500–1700. In 1500 the European per capita GDP was roughly $215; in 1700, roughly $265.1
The world today is filled with countries more brutally repressed even than those of feudal Europe. In Sudan, for example, the Islamic government arms Arab militias that murder, rape, and enslave the black Christian population. There are currently tens of thousands of black slaves in Sudan. In Rwanda in 1994, Hutu tribesmen slaughtered 800,000 innocent victims, mostly members of the Tutsi tribe. In communist North Korea, political prisoners are enslaved, starved, and used for target practice by prison guards and troops.2
The practical results of such oppression are the same as in feudal Europe. In Sudan per capita GDP is $296; in Rwanda it is $227. In North Korea, where nighttime satellite photographs reveal utter darkness because the country lacks electricity, conditions are just as grim. Despite massive aid from the capitalist West, tens of thousands of human beings starved to death there in recent years.3
What must be recognized is that freedom is a necessary condition of wealth. Cures for disease, economic growth, agricultural and industrial revolutions—the means by which human beings rise above deprivation and misery—are products of the rational mind operating under conditions of political-economic freedom. When a James Watt, an Edward Jenner, a Cyrus McCormick, an Alexander Graham Bell, or a Thomas Edison exists under an oppressive regime, whether feudal, communist, fascist or theocratic, his intelligence and revolutionary thinking make him a threat and he is suppressed. But when such a genius lives under capitalism, he is free to create a perfected steam engine, a treatment for smallpox, a reaper, a telephone, and an electric lighting system, respectively.
Liberation from Bondage
The freedom of the capitalist system liberates creative human brainpower from bondage to the state. The ensuing advances in science, medicine, agriculture, technology, and industry generate vast increases in living standards and life expectancies. It is not surprising that during the capitalist epoch, roughly 1820 to the present, the free countries of western Europe and North America saw their total economic output increase 60 times, and per capita income grow to be 13 times what it had been previously.4
Even minimal capitalist elements have already produced salutary results in communist Vietnam. The annual minimum wage there is $134; but Nike, which owns Vietnamese factories—misleadingly dubbed “sweatshops” by anti-capitalist ideologues—pays an average salary of $670, which is double the country’s per capita GDP.5 Western companies in the poorest countries pay their workers, on average, twice what the corresponding native firms pay. Most important, workers voluntarily seek such employment, and unlike the repressive governments, these private companies have no legal right to initiate force against them.
Capitalism is freedom—and freedom leads to prosperity. The moral is the practical. On the other hand, statism is oppression—and oppression leads to destitution. The immoral is the impractical. After two centuries of capitalism, 80 years of socialism, and a millennium of feudalism, the contest is over and the scores are on the board. The alternatives open to human beings are stark: freedom and prosperity or statism and misery. We have only to make our choice.
- Angus Maddison, Phases of Capitalist Development (New York: Oxford University Press, 1982), pp. 4–7.
- Stéphane Courtois et al., The Black Book of Communism: Crimes, Terror, Repression (Cambridge, Mass.: Harvard University Press, 1999), pp. 547–64; Ronald Segal, Islam’s Black Slaves: The Other Black Diaspora (New York, Farrar, Straus and Giroux, 2001), pp. 199–223; Samantha Power, “Bystanders to Genocide,” The Atlantic Monthly, September 2001. See also www.iabolish.com/.
- Gerald O’Driscoll et al., The 2001 Index of Economic Freedom (Washington, D.C.: Heritage Foundation and Wall Street Journal, 2001), pp. 229–30, 317–18, 341–42. See also Courtois.
- Maddison. Also see his essay “Poor Until 1820,” Wall Street Journal, January 11, 1999.
- Johan Norberg, In Defense of Global Capitatlism (Washington, D.C.: Cato Institute, 2003), p. 219.