#10: Over 1 Billion Saved
Almost one billion people have been lifted out of extreme poverty in recent decades, thanks to capitalism. Between the years 1990 and 2010, the extreme poor have had their numbers fall by half as a share of total population in developing countries, that’s almost 1 billion people by 2010, and is likely over a billion by now.
How did this happen?
Poverty rates started to collapse because developing country growth accelerated. From 1960-2000 average growth was 4.3%, and from 2000-10, it was 6%. The Economist estimates that about two-thirds of poverty reduction comes from economic growth.
That’s capitalism for you!
#9. You’re the boss!
Capitalism defined means private ownership over the means of production. Instead of a government run car company that’s run not-for-profit, free market capitalism means that individuals run their own private businesses. Production occurs according to the laws of supply and demand. If there’s a demand, then someone will provide the supplies. The only real voting that’s occurring is when people vote with their dollars, and vote with their feet.
In socialist countries, you don’t own businesses, and in many cases you can’t even decide your own job! You don’t own anything, the state owns everything, including you! Not cool. Make mine freedom!
#8. In the gift horse’s mouth
Capitalism is responsible for lifting billions out of poverty, and increasing standards of living around the world… but don’t tell people that. According to a poll from Pew Research Center, 50% of people surveyed had a positive reaction to capitalism, while 40% claimed they had a negative view. That was a marked drop from an earlier poll back in 2010 when 52% of people viewed it positively, and 37% negatively.
“If capitalism had never existed, any honest humanitarian should have been struggling to invent it. But when you see men struggling to evade its existence, to misrepresent its nature, and to destroy its last remnants-you may be sure that whatever their motives, love for man is not one of them.” -Ayn Rand
#7. The Rent Is Too Damn Low!
Rent control may sound like a good idea, but it sure isn’t for some people. People have been hornswoggled by politicians into believing that government caps on apartment rental rates help poor tenants, but let’s just see what happens with rent control when it’s instituted.
The first inevitable consequence is that there’s a housing shortage. When government intervenes in the marketplace, the tenants will begin renting more apartments. Prices are signals, and when the free market sets the prices for an apartment, the demand will rise to meet the supplies. But when the supply prices are artificially lowered by government, people will naturally want to rent more units, decreasing the available supply.
Landlords are then incentivized to rent out fewer units. After all, why rent out more units if you’re going to lose out on money?
“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from regard to their own interest. Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow citizens.” -Adam Smith
#6. Diamonds aren’t forever
Have you ever been on a hiking trip, and forgot to bring your water bottle? Well, imagine if you were lost in the wilderness, and you had no water for days when suddenly you stumble on a lost tribe of natives. The natives have water, but they want something in return… your shiny diamond wedding ring.
If you were dying of thirst, would you trade the ring for the glass of water? Of course you would. And in doing so, you’re proving Karl Marx wrong. You see, Karl Marx had a theory called the “Labor Theory of Value,” which basically argued that something was as valuable as the time and effort that it took to create or acquire it. Thus, a diamond would be expensive because it takes lots of labor and toil to dig it up, cut it, and set it in your jewelry. Surely a diamond would always be more valuable than a glass of water, right? Not in the above scenario.
You see, value is always subjective. That’s why prices always change and are constantly shifting in a free market, capitalist economy. Diamonds today may be a big deal, but if next year we suddenly decide that we don’t want diamond wedding rings, we want onion rings instead, the diamond economy could collapse overnight. Why? Because value is always what someone is willing to pay for something. Socialist economies can’t plan the pricing system, and indeed they will usually look at prices in capitalist countries to try and emulate them.
#5. Minimum Wage… Because You’re Too Stupid To Bargain For Yourself!
The minimum wage is one of the biggest economic blunders for governments to engage in, unless you’re a politician trying to get elected of course. Proponents of the minimum wage argue that entry level and unskilled workers are too stupid or ineffective at bargaining for a fair wage, so the government should demand that employers pay what they deem a “fair price.”
Politicians argue that employers will collude to try and keep the prices of their entry level workers low. But if that were the case, how come hospitals don’t collude to keep the the salaries of brain surgeons down? That’s because of competition.
When the government steps in to create a minimum wage at $5 an hour, they’re killing all the jobs that might have occurred at $4 an hour. As prices for labor go up and up and up, the number of jobs that can be created go down and down and down. Companies are often forced to lay off workers who are unskilled, because their productive labor is not worth what the government is demanding that employers pay them. Yes, being forced to take a pay cut can be harsh, but far worse is losing your job if the employer simply can’t make it work.
#4. Capitalism Fights Prejudice
The free market punishes people for making stupid decisions. If an employer is hiring someone based on their race, rather than their qualifications for the job, that’s going to catch up to them. True capitalists don’t care about any other color than the color green.
If an employer wants to hire someone for a job that pays $60,000, and a Christian applicant will bring in $61,000, but an atheist applicant would bring in $65,000, then if the employer hated atheists and didn’t hire him, she’d lose money. Hiring the atheist is a better business decision, and the employer only harms herself for her prejudices.
“Capitalism is the only system that functions in a way which rewards rationality and penalizes all form of irrationality… It is capitalism that gave mankind its first steps toward freedom and a rational way of life. It is capitalism that broke through the national and racial barriers, by means of free trade. It is capitalism that abolished serfdom and slavery in all the civilized countries of the world.” -Ayn Rand
#3. Good for the birds and the bees.
Private property rights actually can be beneficial to the environment, as well as conservation. Think of it like this. All of the animals that we have in abundance are the ones that can be legally owned, bought, and sold. But all of the endangered animals are the ones where their trade is illegal. If I’m a sushi restaurant owner, don’t I have an interest in making sure the long term survivability and sustainability of tuna will help me continue to fill my coffers in the future?
When private property rights over nature are strictly defined, we all act to conserve our resources. If I own a parcel of land, I’m incentivized to maintain it. But if it’s public property, then no one has any incentive to care. Think of it like this, if you had a bathroom emergency, would you rather use a public bathroom, or a private bathroom? Why? You know why, because we tend to take care of things better when we own them. It’s the same way for the environment.
“Why was the American buffalo nearly exterminated but not the Hereford, the Angus, or the Jersey cow? Why are salmon and trout habitually overfished in the nation’s lakes, rivers, and streams, often to the point of endangering the species, while the same species thrive in fish farms and privately owned lakes and ponds? Why do cattle and sheep ranchers overgraze the public lands but maintain lush pastures on their own property? Why are rare birds and mammals taken from the wild in a manner that often harms them and depletes the population, but carefully raised and nurtured in aviaries, game ranches, and hunting preserves? Which would be picked at the optimum ripeness, blackberries along a roadside or blackberries in a farmer’s garden? In all of these cases, it is clear that the problem of overexploitation or overharvesting is a result of the resource’s being under public rather than private ownership. The difference in their management is a direct result of two totally different forms of property rights and ownership: public, communal, or common property vs. private property. Wherever we have public ownership we find overuse, waste, and extinction; but private ownership results in sustained-yield use and preservation. Although it may be philosophically or emotionally pleasing to environmentalists to persist in maintaining that wildlife, the oceans, and natural resources belong to mankind, the inevitable result of such thinking is the opposite of what they desire.” Robert J. Smith
#2. S-A-F-E-T-Y Safety Dance!
Politicians always tell people that regulations are for the good of society. Let’s take seatbelt regulations for example. They’re supposed to save lives by demanding that people either wear them, or face a fine. But some studies have shown that the type of people who would voluntarily wear a seat belt actually were going to be safer drivers anyway. People who were willing to take the risk of not wearing one were the type to engage in riskier behavior that might have lead to their higher accident rate.
Ironically, forcing someone to wear a seat belt might make their driving more dangerous. Why? Because if you feel safer, you might be more willing to engage in riskier behavior. Sam Peltzman of the University of Chicago conducted research that showed that the number of motorist deaths after seatbelt regulations were unchanged. But you know who started getting killed more often? Pedestrians and bicyclists. I wonder why?
#1. The Magical Government Job Tree!
Did you know that governments don’t actually create jobs? Think of it this way: If the government wants to spend one dollar to create a job somewhere, then it has to take the dollar from somewhere else before they can spend it. It’s actually worse, because the taxpayer had to also pay the salary of the politician who taxed him, including the job that the taxpayer is being forced to create. It’s a double loss. Instead of the private employer just hiring someone directly, instead the government decides to pick the winner and the loser, instead of the free market.
Whenever a politician tells you that they’re going to create jobs for some new government infrastructure project, think of it like this. If you have a bucket and a pool, and you take the bucket and fill it up from the pool, then walk around to the other side and dump the water back in, have you increased the amount of water in the pool? Of course not. But that’s what politicians are effectively doing when they tax people to “create jobs.” They take water out of one end of the pool, and dump it in the other. And frequently that “water” (i.e. your money) goes to whoever is the most politically connected constituency that lobbied for the cash.