3 of the common myths about capitalism

  • Pro-capitalism = pro-business
  • Capitalism generates unfair distribution of income
  • Capitalism is responsible for the financial crisis and great recession

Not true. Those three (false) myths disposed of in this video:

 

That is from Professor Jeff Miron from Harvard.

A few highlights from the video:

Pro-capitalism = pro-business

The vigorous completion of a capitalist system forces businesses and providers to work hard, keep innovating, and push to lower their cost so they can lower their price. As a result, consumers benefit.

Pushing policies that do that is pro-capitalism.

Massive competition is so hard that many companies will try to get rules put in place to make it easier for them. Consumers won’t benefit as much.

That is pro-business.

Capitalism generates unfair distribution of income

Capitalism rewards innovation, hard work, and creativity. That’s why the rewards flow to some people. Also, individuals and companies who meet consumer’s needs easily, quickly, and cheaply will get rewarded handsomely.

Capitalism is responsible for the financial crisis and great recession

There was extensive government interference in the housing and financial markets before the crisis. Those intentional policies bear a large portion of the blame for the crisis.

No one who is familiar with the financial and banking sector could seriously argue there is a serious lack of laws, rules, requirements, regulations, oversight, investigators, and regulators. You may believe there should be more laws and more regulation, but I can’t take seriously any argument there is minimal oversight of the banking industry.

There are a number of posts on this blog and my other blog (Outrun Change) addressing this particular myth.

Check out the video. It’s great.

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