Dispelling The Myths Of Capitalism & The Value Of Prosperity – Part 1
Over the last decade, wealth inequality in America has become a political battleground. It started with #OccupyWallStreet early in President Obama’s term and has morphed into direct calls for socialistic reforms.
Is there a problem with capitalism? Does it need reform? Or, is Bernie Sanders correct when he says:
In this three-part series, we will explore:
- How Capitalism Got Distorted By Wall Street
- The Myths Of Capitalism.
- Why Government Isn’t The Answer.
- The Cost Of Socialism
- Why Inequality Is A Good Thing.
Is “capitalism,” as an economic system, wrong? Ray Dalio, the head of the largest hedge fund in the world, thinks so. He recently stated that wealth and income disparity was a failure of capitalism. He argues that capitalism is not achieving its goal of more equitably distributing the fruits of capitalism.
Ray is wrong.
Capitalism is an economic system based on the premise of property rights, the rule of law, and free markets, which allows ANY individual the opportunity to create wealth. In other words, as John Mauldin, once penned:
“Properly understood, it provides a level playing field for entrepreneurs to offer goods and services that produce incomes and profits. I don’t think equitably distributing those profits is capitalism’s role.
Ensuring that all participants are treated fairly and, to some extent, regulating these personal and corporate endeavors is the role of society in general and government in particular.
So when you say that capitalists are not very good at sharing profits, I would say that capitalism is not designed to do so.”
So, what type of economic system do you have when profits, goods, and services are shared on an equal basis? “Socialism.”
Importantly, what Ray Dalio is referring to is not a problem of “capitalism,” it is a problem of Wall Street.