Capitalism

In Defense of Global Capitalism

By, 10/03/2006

It's amazing to us, given the results of the 20th century, that capitalism still needs a staunch defense now and again. But alas, indeed it does. Today's Wall Street Journal Commentary section features an essay on this topic from Johan Norberg, author of a book we highly recommend entitled In Defense of Global Capitalism: http://www.amazon.com/Defense-Global-Capitalism-Johan-Norberg/dp/1930865473/sr=8-1/qid=1159814233/ref=pd_bbs_1/002-9333642-0908068?ie=UTF8&s=books

Subscribers to the Wall Street Journal can access Mr. Norberg's full commentary: http://users2.wsj.com/lmda/do/checkLogin?mg=wsj-users2&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB115975623610579692.html%3Fmod%3Dopinion_main_commentaries

But allow us to summarize a few of his most salient points and a few of our own.

In the last 100 years, the major enhancements to society and culture—be they in industry or in art—have come from entrepreneurs acting freely and competitively for their own advancement in tandem with the betterment of society at large. At best, government has served as a general impediment to this process. In fact, capitalism is set up in such a way so as to actually align personal and market demands far better than any bureaucratic government could.

In this way, the system is plus-sum, not zero-sum. This is a difficult notion for many to accept. The wiring in our Stone Age Brains is naturally disposed to believe that if someone is gaining, then someone else must be losing. If one nomadic tribe hunts and kills all the big game in your area, then your tribe will have none to eat. Winner/loser parity is a function of survival instinct. But most of the time wealth in capitalism is created, not divided. Taking from one and giving to another is a different way of saying redistribution of wealth—and that is the domain of governments.

So, lacking many cogent objections, opponents to capitalism now cling to barbs such as "capitalism is soul-killing" or cite the apparent stress we all face in a world of increasing consumerism. (They're free to opt out at any time if it's so bad, and we invite them to.)

If you require further proof of the massive wealth creation capitalism provides society, check the returns on world stock indexes compounded annually since 1900.

*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.

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