Sunday, July 05, 2015

Defending the Free Market

The following is my reply to a critic of capitalism..

What made the US great was a belief in its own exceptionalism, its flexible labour market, high degree of innovation and its emphasis on individual freedom. It is also was motivated by a culture of self-reliance that eschewed the class structure of Europe. The country is a capitalist nation and although there has been a need at time to regulate some of the excesses of the laissez-faire model (which is only one of several models of capitalism) it is the adherence to free markets that have generated the wealth that underpins the success of the nation. The same is true of Hong Kong and Singapore.

The Chicago model has its pros and cons but countries that have adapted many of its solutions generally show enhanced economic growth (the US included). Chile is a classic example. It is ranked as a high-income economy by the World Bank and has the strongest GDP per capita for all South American countries. In global competiveness supersedes Brazil and Argentina who have erred on the side of big government with the predictable failures. Chile also has a robust privatized national pension, is ahead of the curve in income equality and nurses an unemployment rate of 6% that is lower than the socialist luminaries of Sweden, Spain, France and Belgium (to name a few).

Anti-Capitalist social justice warriors such as Naomi Klein (whom I suspect frames your opinions of neo-liberalism) and the ever irrelevant Michael Moore offer much criticism but very little in concrete alternatives (although they have probably moved into the 1% by pandering to the faithful with the required rhetoric that bashes the very philosophy that has enriched them). Socialist based economies have consistently failed. One can point to the obvious examples of Venezuela and Greece but there are a myriad of other cases from Tanzania, to Nicaragua to the population rich nation of India.

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