The following is a response I delivered to various inane comments about capitalism made on a leftist forum.
Well look at what privatisation does to the workers of Pakistan http://www.ptudc.org/Anyway I never met a rightwinger who could show that freetrade made more than a handfull of people rich- Teis
Mass firings - sacificial for profits, Workers - serivice of others, Workers - Commodity of employers. Hey isnt that capitalism.- comrade neonate
being a communist isn’t fashionable anymore, it is sooooooo not cool
let’s be a cappie en exploit others…- Pingu
The above comments make abundantly clear the limited research this board’s members have done into to the theories they claim to follow and those they claim detest. For the benefit of those who have been hoodwinked into following socialism I have but together a brief piece on the practical implications of capitalism.
Private ownership encourages economic efficiency and competition while ensuring that entrepreneurs have a right to the profits generated by their own efforts. Consequently entrepreneurs are given an incentive to search for better ways of meeting consumer needs. Be it by the introduction of new products, the development of more efficient means of production, higher quality after-sale services, or through more competent management than competitors.
Contrast this to the environment under a command economy. Enterprises, that are state-owned, have little or no inducement to control costs and maintain efficiency because there is no way they can go out of business. The abolition of private ownership eliminates the incentive for individuals to search for new ways of serving consumer needs and results in an absence of dynamism and innovation.
Even the armchair communists that infest this site should know that innovation and entrepreneurship are the primary engines of growth. By innovation I mean new products, new processes, new strategies, new management practices and new organizations. It is obvious that to sustain economic growth, the business environment must be conducive to these factors. So, what kind of system best encourages innovation? Capitalism. To reinforce what I said above, under a free market economy any individual who has an idea is free to begin a business and make money out of it, just as an existing business is free to improve operations through innovation. Depending on their level of success, the individual entrepreneur and the established business can each reap rewards in the form of high profits. Herein lie the enormous incentives created in capitalist economies to embrace innovation.
In circumstances where all means of production are owned by the state, as in a command economy, incentive to innovation is removed because it is the state, rather than the individual, that receives all gains. This lack of economic freedom and incentive for innovation was the prime cause for the economic stagnation that occurred throughout the Marxist states of Eastern Europe and even some of the mixed economies of the west. Observe that those nations with the greatest level of economic freedom (Hong Kong, Singapore, the United States etc.) also rank among the highest in terms of economic growth.
The assertion that global capitalism is detrimental to the poor of the world is another common fallacy. By lowering tariffs on imports, producers of poorer nations have access to lucrative markets in the west that would otherwise be denied to them. Similarly, western businesses have the freedom to move firms off shore, giving jobs to citizens in nations with a lack of domestic producers. Observe that in 1970 South Korea and Ghana had an equal GDP. South Korea recognised trade as a positive-sum game, concentred its resources on the production of goods that they produced most efficiently, engaged in trade to acquire those goods that they did not produce, and allowed “sweatshops” to be set up by foreign companies. Now South Korea has the 12th largest economy in the world while Ghana, who committed itself to “Pan-African socialism”, is in the same stagnant swamp that it started off in.
