“That [capitalism] is fundamentally greedy and immoral. That it enables the rich to get richer at the expense of the poor. That open markets are Darwinian places where the most ruthless unfairly crush smaller competitors and where the cost of vital products and services like health care and energy are almost beyond the reach of those who need them. Capitalism has also been blamed for a range of social ills - from air pollution to obesity.”
As with any big lie, the “bad Rap” Mr. Forbes outlines for us obscures the greater truth, that many of the economic ills that beset us owe their beginnings to arguably well-intentioned government efforts to shape society to meet supposedly more humane goals.
Two obvious examples are “the central role of government-created mortgage behemoths Fannie Mae and Freddie Mac in the subprime-mortgage meltdown and financial crisis and the mammoth impact of giant government insurers Medicare and Medicaid in shaping today’s dysfunctional health-care market.”
Given the ongoing congressional momentum to create a new health care system, that last point is certainly worth the separate chapter Mr. Forbes devotes to the topic. Interestingly, he cites two areas of medical care which are not covered by insurance or government rationing - cosmetic surgery and laser vision surgery where, along with a significant rise in demand and in the development of new technologies, costs have been restrained (in the case of plastic surgery) or actually sharply reduced (for eye surgery) to a third of what they were a decade ago.
His solution is to provide the individual (through tax deductible health savings accounts) and small employers (through pretax dollar pools) the means to negotiate better insurance coverage than any government-mandated system would.
There are plenty of laugh-making insights amidst the serious arguments here. My favorite is Mr. Forbes’ assertion that those awful McMansions that blight suburban (and increasingly urban) America “are a reflection of the fact that capitalism allows more people to enjoy luxuries once reserved for the rich. Isn’t that good - indeed moral? Over the last 30 years, free markets have made life better for people on all rungs of the social ladder. That doesn’t mean everyone will have the best of taste. The controversy over McMansions is emblematic of the social tensions that typically occur when large numbers of people move up the income ladder, causing discomfort to those both above and below.”
Take that, Thorstein Veblen. Take that, President Obama.
James Srodes has been a Washington financial correspondent for more than 40 years for United Press International, Business Week, Forbes, Financial World, World Trade, The Far Eastern Economic Review and others.