A long time ago, Winston Churchill, Prime Minister of England during WWII, noted that democracy is a terrible system, but it's better than anything else we have.
Same is true of capitalism. Let's not paint it as another version of Utopia.
Capitalism is almost unbelievably productive, ruthlessly efficient, and where capitalism is in operation, there's usually never enough labor, ostentatious wealth, and so much innovation and development in products and services, it's hard to keep track. Choices for ordinary consumers abound -- including low-cost alternatives for the non-wealthy.
Capitalism is also very unforgiving. Money flows toward success and useful innovation. It will support even what looks like pretty screwy ideas, if their originators can create a market for them. It dumps the dubious, the lazy, the obsolete. And it does so with a dizzying speed. This is where the efficiency comes in.
Take, for instance, paper companies. Even 20 years ago, paper companies were huge, rich corporations. They owned thousands of acres of forestlands, produced a wide range of products -- not only paper, but building materials. Some of them had such large mills, they built their own power geneation plants and sold the excess energy to local towns. They had enormous untapped resouces in their forests, even developed new types of trees to grow fast and produce a lot of pulp, employed hundreds of thousands of people in pretty good-paying jobs.
What happened? Email, mostly. The Internet. Add the tree-huggers who thought the paper companies were a big fat target they could humiliate and knock down, or at least make it so expensive for the paper companies to do business, they'd re-think growth plans. So now all of the big paper companies are struggling. Many have shut down, merged witn others, restructured. Nearly all have divested their forests. Many have greatly narrowed their focus -- they do ONLY lumber, ONLY office papers, ONLY packaging.
Maine and northern Wisconsin, along with many areas of the South, have suffered through this. In many towns, the paper mill was the largest employer.
But see, to continue to support the paper industry as it was about 1985 or 1990 would be a huge waste. In fact, for about a decade -- and perhaps continuing -- the biggest problem the paper industry faced was over production and over-capacity for production. The market had too much paper, the price went down, the producers and distributors and everyone else associated suffered.
So what's the answer? Should the government have bailed out the paper companies to save all those jobs? So the paper companies could continue to crank out tons of product nobody wants or buys?
Even worse is the capital tied up in (in this case), the paper companies. By one estimate, it costs about $1 billion to build a new mill. Many functioning paper machines are 100 years old or more. They aren't very complicated machines and have been retooled over time, including for recycling operations, but China is building brand new, computer-operated mills and machines. Should American investors put more money into paper, then? Will that bring the industry back?
No. That's good money after bad. The market -- that is, millions of consumers -- decided that they don't need that much paper anymore. Bye-bye.
The capital has long gone somewhere else to support probably electronics or telecommunications or something like that. Something that's still being developed, still growing.
The free market -- capitalism -- is absolutely without pity in support of growth and development, and downright stinking cruel to the useless, the non-productive, the obsolete.
And to throw another platitude at you -- "A rising tide lifts all boats."
America has always been very cruelly capitalist. We often hear the stories of immigrants who came here looking for the streets of gold, and were stunned at how damn hard they had to work to simply stay fed and raise their families. We don't often hear from people who went back to Europe or Asia, tails between their legs, whining about the vicious materialism and lack of compassion.
As it's happened, though, the rewards resulting from capitalism have generally been so vast and mind-boggling that it's been able to support a so-called "safety net" for the disabled, the aged, and others who just can't take care of themselves. That, by itself, is kind of a miracle, but even in America, capitalism can be over-burdended, tweaked and regulated to the point where it's not capitalism anymore -- not free, not fluid, not productive.
There is an end to it. Kill the rewards, you kill the system. You kill the goose that lays the golden eggs.
We all become Greeks, screaming at banks for lack of a more accurate target -- the true source of failure being the lazy, the freeloaders, the so-called "privileged victims" of one thing or another, demanding "reparations" for one thing or another. Those who take without giving anything back. The spine and backbone of capitalism is, after all, value-for-value trade at every level. Not giveaways or plums or favors.
So anyway, in defense of some things that have been said about Mitt Romney -- though I'm not overly enamored with him -- he was one of the guys who re-directed capital from failure and waste into new channels that were productive and useful. That's not a bad thing. If he got rich in the process, good for him. He worked for it, took the risk, made some successful calls.
What's the alternative to this? Is it any better?Is it any more secure to attach yourself to someone else's coattails and hang for dear life, for the "free" ride? Does that support individual liberty and fund a free society?
Think about it.
Save the Republic.
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