After the Berlin Wall fell on November 9, 1989, Francis Fukuyama famously declared that it marked the “end of history”. The long, bloody war of ideas was finally over – capitalism triumphed over communism, once and for all. The historic long standing conflict between economic ideologies was finally resolved. Disagreements over the best economic system lead to violent, deadly wars and a cold war between U.S. and Russia that could have ended life on the planet had there been a nuclear war.
While military warfare over socialism is over, the thought war over socialist ideas continues. Some thinkers just don’t remember or simply ignore the bloodshed and economic misery humanity endured before capitalism prevailed because arguments for government wealth re-distribution keep getting published. Leftist ideas will not and cannot change our system of private property rights because its sole purpose is to preserve existing power relationships. Capitalism will continue to do this regardless of how many writers object to its fairness or believe that current wealth distribution is unethical.
Many do not like the fact that free markets sort out who gets what. “Distribution” of wealth is not conducted by a politician’s perception of who deserves what, but rather on the ability of the powerful to use their power to retain and grow their wealth. Adam Smith’s invisible hand is the pounding fist of the powerful. The more vigorously socialist arguments are advanced, the more entrenched the powerful become. They and their advisors know exactly what’s going on.
There is currently a slowly growing crescendo of thinkers lamenting the unfair, brutal nature of global capitalism. For example, Ryan Avent in his book The Wealth of Humans (2016) believes that low skilled workers have a human right to wealth re-distribution because of economic justice. He writes that the current state of the world is an absurdity. “The point of technological progress, if their possibly is one, is to improve human lives, to make as many people as possible as well off as possible.”
Well it doesn’t work that way. Wealth is, has always been and will always be aristocratic. The “good life” is reserved for a minority of humans – not for everyone. It’s sad that our system is so exclusionary but arguing that it is not or should not be won’t change it and, in fact, makes it worse. Capitalism (with all its bias and cold, hard meanness) is a vastly superior and enormously more efficient means of allocating scarce resources than any centrally planned economy. Next week, we’ll take a closer look at the “good life” that those in the mass affluent enjoy.