Friday, December 15, 2006
Let's hear it for capitalism, folks!
Neil Reynolds writes an amazing piece in today's Globe and Mail (behind their subscription firewall, which you can try to circumvent by inputting the title of the article into Google News) about the power of the free market to make life better — even for the poor. The article is meant as a warning about Stephane Dion's apparent unease for capitalism, but I think it serves as a rather shocking endorsement for the general concept of the free flow of goods and services in a market economy.
Here's an extraordinary excerpt, with quotes taken from the book Myths of Rich and Poor, written by Michael Cox and Richard Alm. It essentially speaks for itself. There's more in the article, if you can access it:
Would you rather be a millionaire living a century ago, they ask, or a regular, ordinary person now? "A nineteenth-century millionaire couldn't grab a cold drink from the refrigerator," they observe. "He couldn't hop into a smooth-riding automobile for a trip to the mountains or the seashore. He couldn't call up news, music, movies and sporting events. He couldn't jet north to Toronto, south to Cancun, east to Boston or west to San Francisco in just a few hours. He couldn't transmit documents anywhere on Earth in seconds.
"He couldn't escape the summer heat into air-conditioned comfort. He couldn't check into a hospital for a coronary bypass to cure a failing heart, get a shot of penicillin to ward off an infection or even take an aspirin to relieve a headache." Aspirin didn't reach the market until 1915.
The point here is not simply that free markets have transformed the lives of regular, ordinary people. It is also that they have transformed the lives of the poor. Mr. Cox and Mr. Alm: "By the standards of 1971, many of today's poor families might be considered members of the middle class." More than 300,000 poor American families (with incomes less than $20,000 U.S. a year) live in homes worth more than $300,000.
How can people remain poor and yet possess most of the trappings of middle-class life? By increased purchasing power. Among households living below the poverty line in the U.S., the cost of essentials (shelter, food, clothing) had fallen by 2000 to 37 per cent of all consumption, compared with 52 per cent in 1980, 57 per cent in 1950 and 75 per cent in 1920.