I read so much junk about capitalism and American business. So many of my friends, even my Christian friends, seems sucked into the rhetoric of socialism and think that it Socialism, somehow better approximates biblical values. As a former small business owner myself, I chaff at the idea that capitalism is inherently evil. Stossel and Medved are helpful in correcting the perception.
Wednesday, April 21, 2010
Myths About Capitalism
I won 19 Emmy Awards by reporting a myth: th
atbusiness constantly rips us off -- th atcapitalism is mostly cruel and unfair.
I know th
at's a myth now. So I was glad to see the public ation of "The 5 Big Lies About American Business" by Michael Medved. I invite him on tomorrow's Fox Business Network show to talk about th at.
"You can only make a profit in this country by giving people a product or a service th
atthey want," he says. "It's the golden rule in action."
Medved used to write about the movies, so he's familiar with the businessman as villain. I'll play a clip from the movie "Syriana," in which an oil tycoon makes this ridiculous speech:
"Corruption keeps us safe and warm. Corruption is why you and I are prancing around in here instead of fighting over scraps of me
atout in the street."
at's interesting," Medved commented, "is th atin the old days, would have businesspeople who were very positive: George Bailey, the Jimmy Stewart character, is a banker in 'It's a Wonderful Life.'" Hollywood
No longer. Today's movie capitalists are criminals or playboys. Apparently,
Hollywoodwriters think it's plausible th atCEOs have lots of time to sip cocktails and chase women.
"In school, we all studied a book called "The Theory of the Leisure Class," which ... indicted the leisure class and these people who were out there exploiting other people and really had nothing to do except sit on their yachts and go to their swimming pools and their vac
In real life, th
"The higher up on the income scale you go, the less leisure time you have. You make money in this country by working hard."
Medved's second myth is th
atwhen the rich get richer, the poor get poorer. This is the old zero-sum fallacy, which ignores th atwhen two people engage in free exchange, both gain -- or they wouldn't have traded. It's wh atI call the double thank-you phenomenon. I understand why politicians and lawyers believe it: It's true in their world. But it's not true in business.
"If you believe th
atwhen the rich get richer, the poor get poorer, then you believe th atcre ating wealth causes poverty, and you're an idiot," said Medved. "One of the things th atI h ate is this term 'obscene profits.' There are no obscene profits ... . (The current economic downturn shows) "th atwhen the rich get poorer ... everybody gets poorer."
Myth No. 3: Government is more fair and reliable than business.
"Remember the last time you went into Starbucks, and then remember the last time you went into the DMV to get your license," Medved said. "Where did you get better tre
ated? And it's not because the barista is some kind of idealist or humanitarian. She wants a tip. She wants you to come back to the Starbucks ... ."
But the left doesn't get it.
"This is the suspicion of the profit motive -- the idea th
atif somebody is selflessly serving me, they're going to tre atme better than somebody who wants to make a buck," Medved said. But "(i)f you think about it in your own life, if somebody is benefiting from his interaction with you ... it's a far more reliable kind of interaction than someone who comes and says I'm in this only for you."
Myth No. 4: The current downturn means the de
ath of capitalism.
"Capitalism is alive and well," Medved said.
I'm also bugged when people argue th
attoday's problems prove th atcapitalism "failed." Wh atfailed? We had a correction. A bubble popped. But from 1982 to now, the Dow rose from 800 to 11,000. Had it happened without the bubble, we'd say this is one of the gre atboom periods.
Medved added: "This is one of the biggest lies -- the idea th
atbecause of capitalism, we're all suffering. ... Poor people in America today, people who are officially in poverty, have a higher standard of living in terms of medical standards, in terms of the chances of going to college, in terms of the way people live, than middle-class people did 30 years ago. It's an extraordinary achievement of technology and of the profit sector.”
About The Author
John Stossel blogs
athttp://blogs.abcnews.com/johnstossel/ is an award-winning news correspondent and author of Myths, Lies, and Downright Stupidity: Get Out the Shovel--Why Everything You Know is Wrong.