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The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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While socialism breeds oppression, capitalism spurs democracy, economic prosperity

Income mobility, growth in capitalist countries serves as evidence of this unbeatable philosophy
While+socialism+breeds+oppression%2C+capitalism+spurs+democracy%2C+economic+prosperity
Kirby Wright

The year 2017 marks several anniversaries for socialists across the world.

It has been 150 years since Karl Marx published “Das Kapital,” a book that criticized capitalism and helped spark the socialist movement. It has been 100 years since the Russian Revolution, led by Vladimir Lenin. It has been 50 years since the death of Che Guevara, who led many guerrilla campaigns during the Cold War.

While there will be leftists who intend to honor these anniversaries, it is also worth remembering what an absolute failure socialism has been.

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The University of Wisconsin has numerous socialist groups on campus making the case such a trash ideology should be tried over and over again.

These groups spout the typical rhetoric of ending a system they believe only rewards the few and exploits the many. Socialism, in their eyes, will end oppression of the workers and create equality.

The only problem with this argument is socialism creates oppression and poverty, while capitalism generates income mobility and prosperity. 

Consider what has happened since the publication of Adam Smith’s “The Wealth of Nations” in 1776 and the rise of the Industrial Revolution. As economic analyst and American Enterprise Institute fellow James Pethokoukis has pointed out, since the 18th century, gross domestic product per person has skyrocketed. In real terms, the average income of Americans has increased from less than $5,000 to nearly $45,000.

Also, it isn’t just Americans who have benefited from the power of free market capitalism. GDP per person in Europe has risen from less than $5,000 to more than $25,000. Throughout the rest of the world, there has been an increase from roughly the same starting point to more than $5,000. The implementation of capitalism in the west and the expansion of it across the globe is simply the greatest achievement in human history.

Capitalism has allowed for technological innovations that have vastly improved the quality of life. An August 2015 study published by Deloitte found technology has created more jobs than it has eliminated while simultaneously removing workers from repetitive and dangerous work.

Using employment data from England and Wales, the study found the number of people in the agriculture industry has decreased by 95 percent since 1871. The number of people who have jobs that provide care and nursing to others has increased from only 1.1 percent in 1871 to almost 25 percent by 2011. Jobs that use muscle power have been merely replaced by knowledge-intensive work.

Technology has lowered the costs of essential goods and services, expanding the disposable income of consumers and thus creating more demand. Do you have a smartphone or a laptop? Have you ever travelled via car or commercial airlines? Have you ever eaten or shopped at a restaurant or retail chain? If so, then you have benefitted from the free enterprise capitalism has provided.

Marx was always worried that capital would be concentrated among the very wealthy. In fact, a majority of Americans are able to obtain capital through stock market investments, according to Gallup. This comes from individual stocks, stock mutual funds, stocks in a 401(k) or through an IRA. The ownership of corporations is widely dispersed, meaning a great number of people benefit, not just a handful of millionaires and billionaires.

Not only has capitalism increased quality of life wherever is it adopted, but it encourages the establishment of democratic forms of government. The hypothesis of the link between economic freedom and political freedom was put forward by Nobel laureates Friedrich A. Hayek and Milton Friedman. When put to empirical examination, the hypothesis holds up very well.

In March 2010, the Journal of Economic Behavior & Organization published a paper by economists Robert A. Lawson and J.R. Clark analyzing 123 nations as far back as 1970. They found only a handful of cases where democracy and capitalism do not exist together. Furthermore, these cases have been declining over time. Other research has found similar results.

Wherever there’s socialism, crisis often follows.

Just look to Venezuela, the latest example of the failure of an already disproven economic system. For years, socialism was maintained in the Latin American nation without reform under Hugo Chavez’s presidency, but as Margaret Thatcher once warned, “Eventually you run out of other people’s money.”

The Venezuelan economy is now collapsing. Food supplies have dwindled, leading many people to rob supermarkets and food trucks. Soldiers and police have to guard loading depots from being overrun by starving Venezuelans.

One cannot blame the poor for resorting to thievery in this desperate situation, as government currency mismanagement has led to a massive devaluing of the bolivar, driving prices through the roof. People can’t even fit enough money in their wallets anymore. The result is that nearly 75 percent of the population has lost an average of 19 pounds.

When faced with the choice between capitalism and socialism, the answer is always clear — capitalism has proven to be the superior system. It has improved the lives of billions of people and given them opportunities socialism has not. There will always be dissenters, but no one can deny the tremendous accomplishments of capitalism.

John Graber ([email protected]) is a junior majoring in history and political science.

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