Helping Niki get it Right

First Published: 2003-02-08

In her article “Free Market Price” that appeared in the October 20th issue of MY TURN Niki states that “Capitalism is no less dangerous than communism when pushed to extremes.” It-s hard to believe this late in the 20th century, that anyone could make such a statement. Or… Are we being teased into some serious thinking?? The following is intended to resolve any confusion:

CAPITALISM – a description, and how it works:

Capitalism is what happens when you leave people alone. It is a condition of possessing capital and using it for production. Unlike the structure of government that is directed and controlled from the top, capitalism is directed from the bottom up by the decisions of consumers. You could say it is a system in which people act in their own self interest in a free market and in so doing improve the well being of the whole society.

Companies whether small businesses or large corporations take their orders from consumers. Their survival is totally dependent on their capacity to satisfy these customers. This is always the case unless the state interferes and gives one industry a monopoly so the consumer has no choice. The consumer is protected from coercion by the seller so long as there are other sellers in the market. The employee is protected from coercion by the employer as long as there are other employers.

Capitalism has produced incredible abundance and a standard of living that generations prior to the Industrial Revolution could never have imagined. Migrations of millions to the U.S. probably the most capitalistic country suggest that it has always been in big demand.

Capitalism does have requirements considered by some to be a drawback. It works best when the avarice of the state is restricted and private capital is allowed to form. (low levels of taxation) It also requires a large measure of personal and economic freedom (minimal regulation), the protection of property rights and a system of justice universally and equally applied.

COMMUNISM – a description and examples of extremes under communism:

Communism is an arrangement whereby everybody owns everyone else. Before any action can be taken, permission to do so has to be obtained from all the rest. The impracticality of such an arrangement leads to one group taking charge, and this group ends up owning everybody once the power is secured. Inevitably the loss of personal and economic freedom leads to tyranny.

The research of Dr. Rudolph J. Rummel of the University of Hawaii and his book Death by Government confirms the worst fears of those concerned about government power. He reports that in this century 170 million people have been murdered by the state, not including war deaths. Examples of unbelievable barbarism follow:

“Soviet Communists top the list, having killed almost 62 million of their own people and foreign subjects… Stalin was responsible for 43 million deaths, of which 33 million were the consequence of lethal forced labour in the gulag.”

“Chinese communists were next, murdering about 35 million… In addition 27 million died from famine resulting from Chairman Mao-s insane economic policies.”

“Communist Cambodia under the rule of Pol Pot murdered almost one third of the population between 1975 and 1979.”

“Although most people have heard that Hitler murdered almost 6 million Jews, few people seem to be aware that Hitler murdered a total of 20 million people – including gypsies, homosexuals, Dutchmen, Italians, Frenchmen, Balts, Slavs, Czechs, Poles, Ukrainians and others”.

Extremes of communism end up with millions of dead bodies. Extremes of capitalism on the other hand result in millions of satisfied customers.

The above comparison is a simplification of what must surely be THE story of the century. It is an incredible story, but it is not the whole story. More remarkable is the fact that there are still socialists like Mr. Sadruddin Aga Khan who think of the world as one large pie to be shared among the world populations – by a powerful government. Apparently he has failed to notice that the experiment has taken place and the results counted; tyranny is what happens when power to redistribute wealth is concentrated in a few, and liberty prevails when millions of capitalists participate in a free market.

Help support The Nassau Institute