- The Washington Times - Saturday, September 20, 2008


Gordon E. Finley (“Bailouts and taxes,” Letters, Thursday) is shooting at the wrong target. Government bailouts are not the work of capitalists, but of legislators and mercantilists — the same two groups Adam Smith decried in his classic “The Wealth of Nations.” In a free market, taxpayers would not pay a single cent because there would be no government involvement. Losses would be borne by those who chose to risk their money in projects that didn’t pan out.

One need only look to North Korea, Zimbabwe or Cuba to see how well nationalization works out for “the proletariat.” Government bailouts are nationalizations of the consequences of bad investments — the policy of the failed Soviet economy.

More fundamentally, the terms “proletariat” and “capitalism” are both misnomers. Unlike Asia or Europe, the United States has never been divided into classes. Study after study invariably has shown there is tremendous movement between income levels in the United States. Income-level mobility in America is the rule rather than the exception.

The term capitalism was used frequently by Karl Marx as a rhetorical coup implying an economic system run for the benefit of a small investor class. The return to labor in wages and benefits in the United States dwarfs the relatively thin profit margins returned to investors. As Milton Friedman dryly observed, it would make more sense to call the free-market system “laborism.”

Mr. Finley’s class-warfare premises are especially inapplicable to the U.S. economy, which, thanks to pension funds, is dominated by small investors, who provide the bulk of capital in this country.


Great Falls

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