There are three things that you do not want to admit at the College: that you are racist, that you are a conservative and that you are a capitalist. Since the beginning of my college career, I’ve been taught the evils of capitalism.
It seems as if the structure of our college curriculum is centered on how you can best distort and criticize capitalism.
For instance, we are taught that capitalism is the cause of the great wealth gap that exists in America. We are also taught that capital/wealth/income is usually concentrated in the hands of few, while the rest of the country is left to suffer with nothing.
Moreover, we are taught to believe that our labor is being egregiously exploited while the hands of a few are benefiting from this exploitation. However, many of these claims are half-truths. It will be to the benefit of the student body if capitalism is presented in its proper form.
First, while it is true that capitalism is one of the causes of the wealth gap in the United States, there are a few things that must be explained. For starters, the wealth gap is not necessarily a bad thing.
There are people in the United States that have amassed a great amount of wealth (i.e. William Gates and Warren Buffet), but entrepreneurs, as such, have been able to raise our standard of living. For instance, Bill Gates’ technological invention has been able to make our lives much more convenient, which gives us more time to devote to building our own wealth and income.
In addition, simply because Bill Gates is incredibly rich does not imply that people who are not that rich are “suffering.” As mentioned, the American standard of living has risen because of capitalism. Today, people with smaller incomes are able to enjoy the goods that people like Bill Gates are enjoying (maybe not to their fullest extent, but this is better than not enjoying them at all).
Walter Williams, an economist from George Mason University, writes that, “Henry Ford benefited immensely from mass producing automobiles but the benefit for the common man, from being able to buy a car, dwarfs anything Ford received. Individual discoverers and companies who produced penicillin, polio and typhoid vaccines may have become wealthy, but again it was the common man who was the major beneficiary.”
Thus, Walter Williams is saying that if we do not measure benefits strictly in terms of money gained, but in other terms (time saved, convenience, etc.), then we have all benefited from innovations that have prospered under capitalism.
The other point – that we are being exploited for our labor – may have been the case in the 19th century, but today it is simply untrue. The term “exploitation” carries a lot of baggage, but one thing must be clarified: the value of our labor is determined by certain factors (such as demand, skill difficulty, number of people that can perform the labor, etc.). Thus, the wages that we receive are often determined by these factors.
So, if you are properly paid $5.15 to bag groceries (which may be too much), how is one being exploited? Moreover, if a person is paid $40 million to dunk a basketball or throw a baseball, then how is that person’s labor being exploited?
Kenneth Lucas contributed to this article.
Information from – “Another Academic Casuality: Harvard University Ex-President Lawrence Summers” by Thomas Sowell; Wealth of Nations by Adam Smith
Editor’s Note: The author of this article encourages comments or questions at his blog (econjsmphil8.livejournal.com) in addition to letters to The Signal.