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Capitalism's Critics Need to Be Told About Its 200 Years of Success

June 11, 2018 in Economics

By Ryan Bourne

Ryan Bourne

Sometimes, there’s nothing more controversial than a
self-evident truth, especially on Twitter.

Want to trigger a swarm of angry Corbynistas? Mention how
capitalism has greatly reduced material misery in the past 200
years. “If you honestly believe that, I actually feel bad for
you,” one replied. Others mused that capitalism was
responsible for slavery, war, poverty, hunger, and inequality. All
of which would be news to anyone who has studied pre-19th century
history.

Whether through ignorance or utopianism, lots of people forget
we live in unprecedented prosperity. Poverty is not a product of
capitalism, but has been with mankind for all time. The facts speak
for themselves. Prior to the Industrial Revolution, most people
lived on about £2.20 per day, or £800 per year in
today’s money, according to economic historian Deirdre
McCloskey. In 2015, average earnings for a full-time UK employee
were £27,600.

But it’s not just income. Capitalism has liberated us from
back-breaking agricultural and domestic toil, reducing average
hours worked considerably. Crop yields have risen. Undernourishment
has collapsed. Access to electricity has dramatically increased.
Global average life expectancy rose from 52.5 years in 1960 to 71.6
in 2015 alone.

Yes, there are costs to development, including on the
environment (though these days wealthy countries are far more
environmentally friendly than poor). But the idea capitalism itself
makes us sicker, more exploited and poorer is a historical
nonsense. The Corbynistas implicitly admit as much when they pivot
to extolling how rich we are to justify ramping up government
spending.

As the American conservative commentator Jonah Goldberg explains
in his new book, Suicide of the West, the past 200-plus years have
been a “miracle” in the truest sense of the word. The
take-off in human flourishing is largely unexplained by
conventional economics, because lots of the components we take as
partial explanations — trade, property rights, and
technological advances — were found in previous societies,
without the dramatic results. Both Goldberg and McCloskey conclude
that a combination of ideology and rhetoric, including the
elevation of individual liberty and innovation, were critical
factors that birthed the golden egg-laying goose.

The major problem is capitalism is unnatural. Human nature is
instinctively tribalistic, even socialistic. We’ve got rich
not because we are now free to act on our instincts, but because we
developed a system restraining them. But our innate, romantic
tribal desires live on. In an era in which civil society is weak,
we put more demands on politics to fulfil it, in turn blaming alien
capitalistic institutions for all ills. The result is fomenting
across developed countries. On the Left, through increasing
identity politics, and resurgent socialism; on the Right,
burgeoning anti-immigrant feeling and nationalism; on both, rabid
partisanship and …read more

Source: OP-EDS

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