For a great explanation of capitalism versus socialism, see this quick clip of Milton Friedman on the old Donahue show: http://www.youtube.com/watch?v=RWsx1X8PV_A&eurl=http://www.reason.com/blog&feature=player_embedded.
The reason why socialism has a bad name is simply because it doesn't work. It doesn't create wealth. No matter how smart they think they are, it is simply impossible for a politician to know how to "manage" the economy and create wealth. The U.S. economy is made up of millions of people making new decisons everyday based upon their individual situations. Its a fascinating, uncontrolled phenomenon of cooperation and competition that results in an ongoing cycle of wealth creation and wealth destruction (the destruction part is vital).
While government has inherent government functions it must do, it should be limited to such functions. When government interferes in the capitalist system you get what we see today: (a) a bubble created by government policies (no matter how well intentioned) is now being "solved" by more of the same government policies that created the bubble in the first place, (b) businesses that should fail are being propped up by taxpayer money and (c) the government is taking on extreme financial obligations to add to its already extreme and unsustainable future liabilities. The result will be less freedom, less capitalism, less wealth, more government and more inflation.
At least the Red Wings will be fun to watch in the playoffs...
1 comment:
I don't necessarily disagree with your general thesis, although I would say that the purpose of socializing certain aspects of our capitalist economy is not to create wealth (thats what the capitalist portion that should account for most of the economy is for). The purpose of the socialized parts its to guarantee the production of certain things the market might not otherwise produce.
Anyway, its interersting that your example is Milton Freidman. I do agree that most people would consider him (and the University of Chicago more broadly) among the greatest advocates of free market capitalism. So for a great example of how truly confused these issues have become by everyone thinking they can slap a label on every proposed policy or argument, see this critique of Freidman and the Chicago School as advocates of economic theories underpenned by marxist ideals (specifically the doctorine of pure and perfect competition):
http://www.capmag.com/article.asp?id=271
Post a Comment