I just finished Meltzer’s work on capitalism. “Why Capitalism” taught me that Democratic Capitalism is a workable economic system. Now Zingales’ book, “A Capitalism for the People,” is reinforcing my belief in this concept. Zingales is an Italian who moved to the United States to escape the political and economic nepotism and cronyism of Italy.
He, like many of the Italian economists who moved to the United States, immigrated here as “extreme leftists, and in some cases as active communists.” What is interesting is that even though as leftists hating our economic system, they still traveled here because of the education. They put their politics on hold to get a top notch education, but during the process every one of them, at least according to Zingales, became a free marketer. He cites as the reason for this development, “a firsthand realization that many of the free-market benefits that they study in theory actually hold true in this country.
Our free market system works. People can take initiative, resulting in economic reward. “Rewards are more likely to be allocated on the basis of merit here than on a basis of political connections. Competition provides people with better products at lower prices. And the low barriers to entry, promote the emergence of new ideas and opportunities.”
However, just as with any political and economic system, the why is just as important as the how. Chuck Colsen demonstrates this by discussing Aleksandr Solzhenitsyn’s classic novel, “The Cancer Ward.” The protagonist is a man names Oleg. As he is adjusting to life in a Soviet cancer ward, he develops a relationship with a beautiful nurse. As Oleg helps Zoya with her work, he finds there are very few deaths within the hospital. One would think that a cancer ward would have many deaths, but in this case there are few. Oleg eventually finds out that when a patient is considered terminal he or she is released to die on the street. Solzhenitsyn describes a man being released who has no family, thus “the best he can hope for is an empty bench where he can lie down and wait to die.”
Any system without human care is an evil system. If we live in a system without human care, what is our reason for living? Money, fame, success? These are all bowls of porridge to sell our heritage for because we are hungry.
Brooks in the “Road to Freedom,” explores if money makes one happy. He talks of a research project completed in 1974 by an economist, Richard Easterlin, about whether rich countries were happier then poor countries. Easterlin’s conclusion was that rich countries are not happier.
Brooks gives the reason for this lack of happiness as a process of adjustment. In other words, we adjust to “our new economic circumstance incredibly quickly.” The more money we have, the more we adjust, and the more we spend. Adam Smith noted that during this process human beings will return to some point of tranquility. We adapt to our own “hedonic treadmill.”
A free market allows us to pursue our self-interest, while the passion to accomplish something will remain strong, the hunger for wealth dissipates. It is not the economic system that creates meaning within us, it is the pursuit of “earned success.” Brooks defines this as “the ability to create value with your life or in the lives of others.”
I would not say “or,” I would say “and.” The ability to earn success, create value, and then do good for others is, at least in my way of thinking, the best path of action.
And that is my thought for the day!