Money / Politics

The Far Left’s Ignorance of Capitalism and Poverty

millennials capitalismAfter 15 years teaching high school economics it never ceases to amaze me how little people understand about capitalism and how it is the poor who need and benefit from it most. Rich people can do well anywhere and would be rich no matter the economic system of the country, but it’s the poorest who do better under American capitalism than almost anywhere else. Having traveled to over 100 countries, including many in Southeast Asia and Africa where abject poverty exists, there are precious few color televisions, automobiles, and microwave ovens among the poor there.

This is not the old “welfare Cadillac” argument here, rather an acknowledgment that poverty will always exist at some level.  In any room of a dozen people, just as in my classrooms of 25 students, someone has to be the “poorest” if you ranked everyone by household income.  But capitalism doesn’t create poverty any more than spoons create fat people.  Poverty has hovered between about 11 and 16 percent in the U.S. for a century.  It’s at the lowest end in prosperous times like now and at the higher end during recessions.  And someone poor today will not necessarily be so in five years.  Only 3% of those poor today will be so in a decade.  Still, consider what Democrat Anthony Clark, a candidate for the 7th district in Illinois, recently tweeted: “If billionaires didn’t exist poverty wouldn’t either!”  What?

This is the classic failure to understand what was taught in the first chapter of all economics books.  A man is not poor BECAUSE of Bill Gates and Jeff Bezos; he is poor IN SPITE of them.  Neither Gates nor Bezos stole or took anything from the poor.  The economically ignorant believe the economic pie is the same as the pumpkin pie at the dinner table—if your brother takes a bigger piece, then you get a smaller one.  It’s classic “zero sum” thinking, but it’s 100% a fallacy!  An economy can grow.  Gates and Bezos baked whole new pies.  Think how our lives are so much better because of computers, software, the Internet, and buying low priced items on-line.  We can buy groceries and stocks and book airline tickets in our pajamas because of the value created by these and other millionaires and billionaires.

If you still agree with Clark’s tweet, then you agree with these statements, as summarized by syndicated columnist Alyssa Ahlgren:  “if physically fit people didn’t exist, neither would obesity; if students who got A’s didn’t exist neither would F students; if professional athletes didn’t exist then neither would the athletically challenged.”

Jeff Szymanski works in political communications for AMAC.

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