Critics of capitalism often rely heavily on emotion-laden statements devoid of facts. They are convinced that some form of socialism is the answer in achieving a fairer and better society. For example, Hollywood personality Sean Penn supported the socialism of his friend Hugo Chavez, president of Venezuela. When Chavez died last year of cancer, Penn directed his praise to Chavez’s successor Nicholas Maduro. But today we see where socialist economic policies have taken Venezuela.
It would be helpful if Hollywood activists like Sean Penn educated themselves with evidence-based research. They are not fashionable and you probably will not hear about them in college, but there are impressive books available for readers seeking to broaden their understanding of economics and the benefits of the free market. One book that opened my eyes is Michael Novak, The Spirit of Democratic Capitalism (1991). Conservatives like me see it as a modern classic.
In his introduction, Novak effectively presents the early historical achievements of democratic capitalism. Before Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Europeans often faced great hardship in their daily lives. Mass starvation, disease, and death were all too common.
But as Novak explains, something happened: “After five millennia of blundering, human beings finally figured out how wealth may be produced in a sustained, systematic way.” Democratic capitalism replaced mercantilist thinking (that wealth was limited). The creation of wealth, increased social mobility (new vocations), and the rise of the standard of living went beyond anything ever imagined.
In Great Britain, the transformation was stunning. Real wages doubled in the years 1800 to 1850, and doubled again from 1850 to 1900. Given that the population “quadrupled in size, this represented a 1600 percent increase within one century.” As a result of mass production and lower prices, ordinary people had access to consumer goods and food choices available only to the aristocracy of the past. Material life in England improved on all levels. Other studies showed that infant mortality decreased significantly and life expectancy rose.
Novak especially shines with his focus on 20th century Latin America. A major issue is winning more people to see the benefits of capitalism and smaller government by having them examine practice rather than socialist theory. But there is no guarantee of success. As Novak explains:
To persuade thinking persons in Eastern Europe that Central American Marxists – the Sandinistas, the guerrillas in El Salvador – are in absurd and tragic error is not difficult. Poles and Czechoslovaks and Hungarians can hardly believe, after what they experienced under socialism, that other human beings would fall for the same bundle of lies, half-truths, and distortions. Sadly, however, illusion is often sweeter to human taste than reality. When, for example, I asked a Polish friend who had completed a year in residence at various American universities, “What is the biggest difference between here and Warsaw?” he replied quick as a flash: “Here you have more marxists.”
This is discouraging. However, covering a wide range of topics, The Spirit of Democratic Capitalism concludes confidently about the dynamic spirit of capitalism:
Were the impulse of capitalism solely materialistic, the system would have long since fallen into narcissism, hedonism, and death. This was the theory of Marx; viz. that the alienation inherent in the system would drive the workers to ‘narcissism’ or, in the current Marxist lingo, ‘consumerism.’ Instead, the spirit of capitalism seems constantly to reinvigorate itself, to work revolution after revolution in technological possibility (mechanical, industrial, and electronic), and to inspire creativity in every sphere of life. It is a system designed to arouse and to liberate, not the body, but the creative soul.
Leftists try to present a compelling case for some sort of a socialist economic system (hello Venezuela crisis), but emotional appeals devoid of any data of the larger trends will be unconvincing with people who know the difference between feelings and facts. When free enterprise is allowed to operate without heavy and injurious government intervention there are benefits for all.
We will see what happens in Venezuela. Recently the media reported that President Maduro wants to meet with President Barack Obama and “put the truth out on the table.” Apparently, Maduro is very upset with American conservatives. It will be interesting to hear his version of truth. Perhaps he will give Sean Penn a call.