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The Blessings of Capitalism

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Twenty years ago, if you were to buy all of the devices that allow you to do what your iPhone and its apps can do today, it would have cost more than $3 million.  And that $3 million price tag does not include the technology that could not have been bought at any price because the technology did not exist, points out economist Richard Rahn, senior fellow at the Cato Institute. The iPhone is a camera and music player; computer for email, maps and directions; alarm clock, Rolodex, calendar, photo albums, voice recorder, flashlight and stacks of newspapers and magazines; a personal library; and a source for all the world’s info and knowledge through Google.

As presidential candidates decry the stagnation in income as well as income inequality, you do not hear much about “those reviled capitalists all over the world” who have created more and better goods and services, “improving everyone’s real standard of living, well-being and happiness,” writes Mr. Rahn.

Almost all of the great innovations came from those in the private sector who created them out of the desire for more wealth or just intellectual curiosity. The socialist countries have produced almost nothing — except for bread lines, coercive and destructive taxation and regulation, and gulags. Yet politicians all over the world proudly proclaim themselves to be socialists and attack the capitalist wealth creators and innovators — as if the real world had never existed.

In real terms, almost all foods and raw materials are becoming both less expensive and more abundant (in terms of man’s economic ability to grow or obtain them). Each year, the United States and other developed countries grow more food, and now with even less fertilizer per pound, on less land. If you have flown over the Northeast United States, you may have noticed that it is now largely woodland where even a half-century ago it was largely cropland. As the woods have come back, so have the animals — with even a densely populated state like New Jersey having a problem with a growing bear population.

Mr. Rahn argues that entrepreneurs and business people need to be allowed “to give us many more $3 million gifts by producing and creating all of those products that better our lives.” Read more here.

FLASHBACK Video: Milton Friedman on Capitalism and Poverty

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Debbie Young

Debbie, editor-in-chief of Richardcyoung.com, has been associate editor of Dick Young’s investment strategy reports for over three decades. When not in Key West, Debbie spends her free time researching and writing in and about Paris and Burgundy, France, cooking on her AGA Cooker, driving her Porsche Boxter S through Vermont and Maine, and practicing yoga.