A couple of weeks ago I was asked to go on a local talk radio show to defend capitalism. It seems that with Michael Moore's movie and all the charges of reckless greed on Wall Street, capitalism is under attack. However, citing Bernie Madoff and the collapse in the financial markets as reasons to dump capitalism is a bit extreme. It is akin to condemning all mankind because of the actions of despots such as Stalin and Mao. By the way, I was pleased to see that Moore's movie opened to "disappointing ticket sales." It was probably because folks showed up at the theater expecting free admission or just making a contribution according to their means. After all isn't it ironic that capitalism has made Moore rich while he whines about it all the way to the bank? Obviously his public is a bunch of idiots. Well back to capitalism. As I told the host recall that when a Russian prime minister came to the US and was taken to a Baskin-Robbins. He was flustered. He said that this was the reason why capitalism would fail. It was wasteful to produce 44 flavors of ice cream when chocolate, vanilla and strawberry would suffice. Au contraire. He doesn't realize that it is the strength of capitalism to provide a supply if the demand for the product is profitable. It on the other hand is wasteful to produce a product that sits on the shelves unsold - something the Russians are intimately familiar with. If I were the dictator, only chocolate chocolate chip ice cream would be produced and there would be no light beer - only stouts and porters. Why? Because that is my taste. There would be no need for any others. However, I can no longer find chocolate chocolate chip in my local stores. I guess the demand wasn't there. You see the difference in capitalism and socialism is that in capitalism, the tastes of many are imposed on the few while in socialism, the tastes of the few are imposed on the many. Finally, all this reminds me of what Milton Friedman said when asked why socialism attracted so many intellectuals. His response was that the tendency of the intellectual is to think his tastes are superior to others and the desire to impose them on others is what attracts the intellectual to the left. Finally, I said that perhaps the best indicator of how well a system performs is the economic wellbeing of its poor. In America, the poor on average would be middle class in Europe. Robert Rector of the Heritage Foundation is a leading expert on this issue and shows how well off are America's poor. Everything is relative. It is only because of the comparison with the nonpoor that America's poor seem impoverished. But given their true income and assets, they are only poor here. A few years ago I had a black student come to class wearing a t-shirt with a person in chains. The caption was "I did not ask to be brought here." I said to her "Aren't you glad you were?" Her response was "Hell yes!" Enough said. Capitalism triumphs.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com