Product Description

Has capitalism failed?

Is it fundamentally greedy and immoral, enabling the rich to get richer? Are free markets Darwinian places where the most ruthless crush smaller competitors, where vital products and services are priced beyond the ability of many people to afford them?

Capitalism is the world's greatest economic success story. It is the most effective way to provide for the needs of people and foster the democratic and moral values of a free society. Yet the worst recession in decades has widely—and understandably—shaken people's faith in our system. Even before the current crisis, capitalism received a "bad rap" from a culture ambivalent about free markets and wealth creation.  This crisis of confidence is preventing a full recognition of how we got into the mess we're in today—and why capitalism continues to be the best route to prosperity.

How Capitalism Will Save Us transcends labels such as "conservative" and "liberal" by showing how the economy really works. When free people in free markets have energy to solve problems and meet the needs and wants of others, they turn scarcity into abundance and develop the innovations that are the foremost drivers of economic growth. The freedom of democratic capitalism is, for example, what enabled Henry Ford to take a plaything of the rich—the car—and transform it into something affordable to working people.

In the capitalist system, economic growth doesn't mean more of the same—grinding out a few more widgets every year. It's about change to increase overall wealth and give more people the chance for a better life.

Product Details

• Amazon Sales Rank: #69 in Books
• Published on: 2009-11-03
• Released on: 2009-11-03
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 368 pages

Features

• ISBN13: 9780307463098
• Condition: NEW
• Notes: Brand New from Publisher. No Remainder Mark.
• Click here to view our Condition Guide and Shipping Prices

About the Author
STEVE FORBES is chairman, CEO, and editor in chief at Forbes Media and an internationally respected authority in the worlds of economics, finance, and corporate leadership. He campaigned twice for the Republican nomination for the presidency. His previous books include Flat Tax Revolution, A New Birth of Freedom, and the New York Times bestseller Power Ambition Glory.


ELIZABETH AMES is founder of BOLDE Communications, which advises corporate and individual clients on communications strategies. Her work as a writer and journalist has appeared in a variety of magazines and newspapers.

Excerpt. © Reprinted by permission. All rights reserved.
Chapter One

"Is Capitalism Moral?"

The Rap eCapitalism is an amoral, dog-eat-dog system founded on greed and the survival of the fittest.

The Reality eCapitalism is the world's most humane economic system, promoting the democratic values of a free and open society: hard work, cooperation, generosity, charity, and devotion to the rule of law.

Is capitalism moral? The question has been debated since before the days of Karl Marx. But it has more relevance today than ever in the wake of the recent financial crisis and recession.

Capitalism's critics insist that evidence of its "immorality" is everywhere—from the collapse of Enron in the early 2000s to the "predatory lending" that helped bring on the subprime-mortgage meltdown and subsequent recession to investment adviser Bernard Madoff's mammoth $50 billion Ponzi scheme that wiped out personal and institutional fortunes around the globe. These and other events, they say, demonstrate that the free market is a winner-take-all jungle, a place where the most ferocious and dishonest triumph, where nice guys finish last, where greed rules and people get ahead by exploiting others.

No doubt there can be bad behavior in a capitalist system. There is bad behavior in any society. However, when viewed as a system, capitalism is more moral than any and all alternatives.

Capitalism has produced the world's highest standard of living by promoting the moral values of cooperation, democracy, and free choice. Nobel Prize–winning economist and noted free-market advocate Milton Friedman frequently made the point that capitalism's foremost historic contribution has been its moral influence.

As we started to discuss in the introduction to this book, capitalism is not about selfishness, but about the needs and wants of others. Former U.S. ambassador, noted theologian, and author Michael Novak makes this point:

The capitalist economy is not characterized, as Marx thought, by private ownership of the means of production, market exchange, and profit. All these were present in the precapitalist aristocratic age. Rather, the distinctive, defining difference of the capitalist economy is enterprise: the habit of employing human wit to invent new goods and services, and to discover new and better ways to bring them to the broadest possible public.1

Adam Smith explained in his classic work The Wealth of Nations that the exchange of goods and services in a market takes place only if both sides benefit. Such mutually beneficial exchanges, multiplied by the hundreds of millions, form what Smith referred to as "the invisible hand." The classic example of the pencil illustrates how these exchanges spontaneously allocate resources in a way that benefits more and more people.

To see the benefits of the Invisible Hand, one need only look around at the profusion of entrepreneurial businesses in most American communities. The vast array of goods and services generated by our vibrant democratic capitalist economy is unequaled: from 24-hour gyms and copy centers to supermarkets with countless varieties of food to even day spas in airports. The open markets of democratic capitalism meet needs that people don't even realize they had. Who ever would have imagined, for example, that we would need social networking sites such as Facebook? Or that you'd want to get a massage at an airport? Millions of Americans—and people around the world—now use Facebook and other similar sites every day, and they benefit from an Internet industry that began in the United States.

Free markets don't just meet the needs of the majority. If there's something people want or need, entrepreneurs in an open market will figure out a way to provide it—from size 22 shoes to hard-to-find spare parts for home appliances.

Since the emergence of democratic capitalism in the last three hundred years, humankind has made more advances—in incomes, standard of living, social mobility, and longevity—than in all the previous centuries put together.

Those who buy into capitalism's bad rap fail to see the moral significance of democratic capitalism's ability to provide for people's material well-being. And yet, would anyone question the immorality of regimes such as Venezuela, North Korea, and the former Soviet Union, where restrictions on personal and economic freedom have caused citizens to suffer extreme deprivation, food shortages, and even famine?

Democratic capitalism is moral precisely because it gives people the greatest latitude to meet their needs and desires by serving those of their fellow citizens, and, through doing so, it generates broad-based prosperity.

Many people today have forgotten that, for centuries, China was technologically ahead of Europe in metallurgy and shipbuilding. Both Europe and China, for example, developed the compass. But Europeans were the first to use it in navigating and exploring the earth. Why? Because Europe had a religious belief in the necessity of progress that eventually became a key underpinning of capitalism.

Milton Friedman wrote that capitalism is about being "free to choose."2 That's why free markets have caused people around the world to move in the direction of democracy. Michael Novak has observed: "Every democracy on earth that really does protect the human rights of its individual citizens is based, in fact, upon a free capitalist economy. Empirically speaking, there is not a single contrary case."3

Free markets are about people expressing their desires, saying yes or no to a product or service by essentially voting with their money. Economist Walter Williams has written that, in contrast to state- dominated societies, capitalism respects "the sanctity of the individual" and is "rooted in voluntary relationships rather than force and coercion."4

In a democratic capitalist economy, people interact in networks of cooperation that teach discipline and moral lessons—from the importance of showing up for work and handling money responsibly to the value of teamwork. Americans take capitalism's moral ethos for granted. Cynics may ridicule chirpy fast-food servers who greet them with "Have a nice day." But this etiquette reflects an emphasis on meeting the needs of others that is not present in other societies.

For example, twenty years after the fall of the Soviet Union, visitors to Russia still complain about the sullen customer service. That's because Russia's formerly communist society was run by a repressive government that controlled all resources and imposed its agenda on citizens. People had to accept what they got, take it or leave it. The idea of freely meeting people's needs—and being polite to them—in an open market was largely alien to this culture.

Russians are only now learning customer-service values from Western businesses like McDonald's that have managed to gain a foothold in the country's difficult business environment. The story is often told that when McDonald's started in Russia twenty years ago, company trainers had to overcome the famously dour attitude of service personnel whose attitude was "We've got the hamburgers. The customers don't."5

The value capitalism places on meeting the needs of others doesn't stop with the marketplace. It has made America a more charitable nation. No citizens give more of their income and time than the American people. According to New York University professor Claire Gaudiani, the U.S. gives twice as much as the next most charitable country—about $300 billion each year. This generosity extends throughout all income levels and is not limited to domestic charities. Americans have sent hundreds of millions of dollars overseas to help those in need after natural disasters ranging from the Burmese cyclone to the Asian Tsunami.

To fully appreciate the morality of democratic capitalism, it helps to have lived in other societies. Author and human rights activist Ayaan Hirsi Ali was born in Somalia, spent time in Saudi Arabia, and later lived in the Netherlands, where she served as a member of parliament. She now lives in the United States. Having experienced a repressive terror state, a Middle Eastern feudal society, and a European social welfare system, she believes that the moral standards of American free enterprise "are far higher than those of history's other great powers."

Why? Because, she says, democratic capitalism is a "meritocracy" that offers people the greatest opportunity to pursue their own goals, to innovate and excel, both in their business lives and at home in their communities. Not only does Ali believe democratic capitalism to be more moral than the oppressive systems of the former Soviet Union, prereform China, and Saudi Arabia. She writes that it is also superior to the welfare states of Western Europe, whose statist economies "corrode" individual responsibility by encouraging dependency.

In a free-market society, where liberty comes first, individuals tend to be more creative and to innovate; in welfare states that assign priority to equality, the natural resourcefulness of human beings is perverted. To become successful, you must learn how to "work the system" rather than how to develop a better product. Risk is avoided, and individual responsibility is thwarted. Although superficially the system may appear fair, it promotes mediocrity and a sense of victimhood, and it discourages those who want to excel.6

Ali believes that the innovation and open exchange of ideas that are part of a free-market society make democratic capitalism best equipped to fix its flaws. For example, she says moral debates about issues such as pollution are conducted only in free-market societies. Based on her experience living in widely varying societies, she believes that democratic capitalism's entrepreneurial capitalists solve problems more efficiently than the bureaucrats of any government.

Ali readily acknowledges that our system of democratic capitalism is far from perfect—"There are many wealthy, decadent, and vapid people in ...

Customer Reviews

True Capitalism defeats Government take-overs
True Capitalism utilizes the concepts of God and Country; free-market economy; individual freedom with free-will and free-choice; man's freedom to create, invent, and engineer to produce ever better products and services. Together, these aspects of our Constitutional Republic allowed creation of the greatest nation ever known to mankind. Unleash capitalism without government theft and watch America again provide an exceptionally high standard of living.
Government take-overs; government over-regulation; government over taxation; government redistribution of wealth i.e. stealing from the 'Doers' and giving the Doers wealth to those uninclined to work provided the non-doers relinquish their freedom and vote for those who become their masters; government-controlled insurance; government-controlled agriculture; etc and et al brought America (and every socialist-type government on Earth) to near destruction.
Do you really need an international government entity to tell you what job you may perform? Do you need an in-bed-with-government labor union to extract blackmail dues in exchange for a job? Do you need a Food Czar to tell you what foods you are permitted to eat? What car you may drive? What curriculum a government-group demands your child be taught?
As Isaiah notes, (paraphrasing) "Awake, America. Your freedom diminishes. Awake O sleeper, arise from your death sleep and claim the freedom with which your Creator endowed you."
Do not allow lust-for-power-and-wealth men and women in government to regulate your lives.
Capitalism brought America to greatness. Demand that Capitalism be allowed to provide citizens once again with the highest standard of living on earth.

Finally a Beacon of Hope in a Financial Storm.
Steve Forbes had the courage and fiscal smarts to explain, in clear and understandable language, exactly how capitalism will guide us though our current financial storm in this fantastic Book!

Hope the Congress and Administration read this book
Hopefully the President and Congress will spend the Thanksgiving Holiday reading this book. As usual Steve Forbes's insight and direction for the economy are right on point. They should take time from the healthcare debate and read this prescription for the economy which will improve our economic health long term for all Americans. This is a must read for anyone serious about the economy and our economic future.