Let’s get back to capitalism

May America find renewed faith in capitalism in 2011.

Here’s hoping we shake off the big-spending Congress of last year and replace it with one willing to start us on a path of fiscal responsibility. Out with the old members who sat in judgment of a perverted capitalist economy in which politicians, not the marketplace, picked winners and losers, and in with a return to sanity in the housing and mortgage sectors, the auto industry, the financial industry and, if it’s not too late, the health care industry.

In other words, let’s get back to the economic system that made us the greatest nation on Earth: unfiltered, poverty-erasing, job-creating capitalism.

To get those righteous juices flowing, may I recommend two books for your mind and your soul: “After the Meltdown,” by Marc De Vos, director of the Itinera Institute, a Brussels think tank; and “Money, Greed, and God” by Princeton theologian Jay W. Richards.

Both books provide an excellent starting point for a national discussion on why, as Richards’ subtitles his book, “capitalism is the solution and not the problem.”

Both authors explode many of the myths articulated by liberal intellectuals who have lost faith in capitalism. Here are two worthy of immediate debunking:

First, the concept of “state capitalism.” When the free market doesn’t respond, government can prime the market. Truth is, as argued by De Vos, government-led development never substitutes for market-led development.

When a nation’s government becomes the principal agent of the economy, the pool of innovative players shrinks and, in the long run, the economy devolves into political cronyism. No better up-to-the-minute case than America’s green energy economy.

Consider the company A-Power Energy Generation Systems. This is a Chinese supplier of wind turbines, partnered with a Dallas investment firm with strong ties to Senate Majority Leader Harry Reid and other Democratic Party insiders.

A-Power seeks to “compete” for $450 million in taxpayer stimulus money to construct a wind farm in Texas. The assembly plant, oddly enough, would be located in Henderson — Reid’s home state.

A-Power’s decision helped Reid in a tough re-election campaign. Aside from Reid receiving donations from the wind farm’s backers, posing for pictures and being able to tell voters his “power” brings jobs to Nevada, A-Power’s partner in Henderson, American Nevada, is also one of Reid’s biggest financial supporters and an employer of one of Reid’s sons.

So, let’s review: A communist Chinese company seeks $450 million in American taxpayer money to build a wind farm in Texas with parts assembled in Nevada. This is “state capitalism” in full bloom: Political back-scratching and cronyism with no chance of translating into a sustainable market in the long term. True capitalism is never born out of a Senate re-election bid. Capitalism requires innovation, not government intervention and political patronage.

The second concept to debunk: capitalism equals greed. Haters of capitalism perpetuate the stereotype of successful entrepreneurs as greedy misers stepping on the poor as they seek to fleece consumers to accumulate wealth.

“Unlike the self-absorbed,” Richards argues in his book, entrepreneurs “anticipate the needs of others, even needs that no one else may have imagined. Unlike the impetuous, they make disciplined choices. Unlike the automaton, they freely discover new ways of creating and combining resources to meet the needs of others. This cluster of virtues, not the vice of greed, is the essence of … the ‘entrepreneurial vocation.’ ”

In 2011, let’s make it a point to debate the merits of capitalism, especially with the “intellectual” left who say America needs more government intervention, not less. The only excess to capitalism and multinational free trade is widespread prosperity, freeing people to become less dependent upon government entitlements.

It’s tempting to tell liberals brave enough to publicly differ to begin their argument by explaining those examples of recent leftist governments that thought they could control free markets and instead caused death and misery in their attempts to “share the wealth:” Josef Stalin’s Russia, Mao Zedong’s China and the Khmer Rouge’s Cambodia.

But let’s focus on the here and now.

Is there anyone out there who thinks that, if by some miracle A-Power doesn’t get that $450 million return favor from Sen. Reid, that Chinese company will proceed to build an assembly plant in Nevada for a wind farm in Texas?


Sherman Frederick (sfrederick@reviewjournal.com), former publisher of the Las Vegas Review-Journal, writes a weekly column for Stephens Media.

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