Posted on June 22, 2021 by Dan Mitchell
In the first video, we discussed three myths about free enterprise.
- Myth #1 – Capitalists get rich by ‘taking’ money from others.
- Myth #2 – The rich getting richer, and the poor getting poorer.
- Myth #3 – Monopolies destroyed the free market.
Here are the final four myths.
Myth #4: Free markets create unsafe workplaces.
Proponents of government intervention often claim that greedy capitalists will skimp on safety in order to get more profits. To support their argument, they cite data on how workplace deaths have declined since the Occupational Safety and Health Administration was created.
That data is accurate, bu what they fail to mention is that workplace deaths were falling at exactly the same rate before OSHA.
This is because wealthier societies, created by capitalism, have both the capacity and desire to invest more in safety.
Myth #5: Capitalism created evil Robber Barons.
During the 1800s, the United States experienced an “industrial revolution,” and many people became enormously wealthy (though only by the standards of that era).
The anti-capitalist crowd asserted that these people were “robber barons” who profited at the expense of ordinary people.
Yet this was the era when the nation evolved from agricultural poverty to middle-class prosperity, as shown by Oxford University’s Our World in Data.
Notice how per-capita economic output grew especially fast in the last half of the 1800s when the industrial revolution was in full swing.
Myth #6: Capitalism just isn’t good for us.
This myth is based on the stereotype that capitalism is a soulless and materialistic system.
And there certainly are some people who are so myopically fixated on their personal wealth that they don’t properly enjoy the intangible benefits of family, community, and leisure.
But that’s a failing of human nature, not of markets. There surely are plenty of materialistic and soulless people, after all, who use socialism to get wealthy.
The key difference, as the great Walter Williams noted, is that you have to serve other people to get wealthy in a capitalist society, whereas you use government coercion to get rich when government controls the economy.
Myth #7: Capitalism will eliminate our jobs.
It’s certainly true that jobs are destroyed by capitalism. As noted in the video, the personal computer destroyed typewriter jobs.
This is the process of “creative destruction” and we should all recognize that it can be very bad news for people who have careers that are upended by technological change (such as candle makers when the electric light bulb was invented).
What’s special about capitalism, though, is that this process is what makes all of us richer over time.
Even the children and grandchildren of people who lost their jobs.