I believe in capitalism. With any science or philosophy, the point is to question and prod until the best answer is found and to stick with that answer until an even better one is discovered. People accuse me of saying capitalism is perfect. No, it’s not perfect but it is the best system for freedom we have found so far. The human race is ever evolving and its philosophies will change right along with it.
The following is an excerpt from the FAQ for The Center for the Advancement of Capitalism:
Question: Under capitalism, what will happen to those who are born without the wealth and opportunities enjoyed by others? Doesn’t capitalism make the rich richer and the poor poorer?
Answer: Quite the opposite. Capitalism is the one system that leaves everyone free to rise by his own efforts. The history of capitalism provides countless instances of people who improved their lives through work and ability. There are the millions of immigrants who came to America and worked their way up to the middle class-or higher. One of the great historical examples was Andrew Carnegie, who rose from a penniless sweeper at a steel mill to revolutionize the steel industry and make one of the largest fortunes of his day. It is no coincidence that 19th century America-the most purely capitalist era in the nation’s history-brought us the phrase “from rags to riches.”
The reason why capitalism allows people to rise by their own efforts is that capitalism is driven by only one fundamental consideration: profit. But profit can only be earned through an increase in the production of wealth: profit comes from inventing a new product, producing a good more efficiently, promoting it to a wider market, etc. It comes from doing things better, faster, and smarter than before. This means that capitalism offer an open field to anyone who works hard to improve his skills-and it offers riches to anyone who thinks hard and comes up with new and better ideas. It is under capitalism, for example, that a company like Microsoft creates scores of millionaires out of individuals whose qualification is not inherited wealth or social connections, but only the ability to create and sell computer programs.
The rule under government regulation, by contrast, is very different. It is a common error today to talk about “crony capitalism.” Cronyism is in fact a hallmark of state-run economies. When politicians and bureaucrats hold power over the economy, the only hope for success comes from currying their favor. Thus the competition for wealth becomes a competition, not over who can produce the most, but over who can make the most bribes or call in the most favors. It is under these systems that established wealth, family connections, and the “Old Boy’s Network” become the determinants of success, rather than individual ability. But that is a problem created and perpetuated by statism, not capitalism.
I would like to add that yes, cronyism and nepotism do of course happen in today’s capitalist societies; however, I agree with the author above that it runs rampant in state-run economies. Again, capitalism is not perfect, but it is a lot better than: fascism, socialism, communism, governments that have too much control over the economy, etc.