How to Raise an (Optimistic) American, Part 2
"A self-made man; He who won’t work, won’t eat; If it’s to be, it’s up to me."
[This is the second of an 8-part series. Read Part 1 here about what makes the U.S. political system special. We’ll be posting one update a week going forward.]
The second of America’s eight foundations is our economic system – free markets, free enterprise, voluntary exchange, and competition (capitalism) backed up with protection of private (individual) property rights.
Astonishingly, the principles of capitalism are almost never explicitly taught in American schools, but this is the economic system in which graduates will be required to operate during adulthood. Understanding the rudiments of capitalism is not intuitive, so we need to prepare students for their plunge into it after graduation.
Capitalism relies upon free markets and voluntary (not compelled or coerced) exchanges.
Essentially, capitalism is anticipating and solving other people’s problems for money. It involves an exchange of value. Capitalism is imperfect and open to critique—what isn’t?—but not without exploring its relative advantages fairly and giving it credit for what it has given and continues to give us. Capitalism drove the economic engine that defeated the mighty Axis powers. It has given us the highest standard of living in the world and in human history.
"It is not from the benevolence of the butcher, the brewer or the baker that we expect to eat our dinner, but from their regard to their own interest." —Adam Smith
While capitalism relies upon activating mutual self-interest, socialism and communism often claim to be motivated by concern for the welfare of others. However, the track record of state-controlled economies tells a much different story, involving ruthless compulsion, mass starvation and the dispiriting effects of a system that fails to understand the roots of human motivation. Winston Churchill famously referred to socialism as “the gospel of envy” and further intoned that “there are two places only” where it will work: “in heaven where it is not needed and in hell, where they already have it.” Socialism and communism also enshrine breaking the 10th commandment against coveting your neighbors’ goods and activate the deadly sin of Envy.
Karl Marx posited life as a struggle of class against class, whereas capitalists recognize it instead as a struggle of man against the elements. Again and again, the socialist model fails to produce basic sustenance, much less prosperity. Americans learned this lesson early on: at the establishment of the Jamestown colony in the early 17th century, land was held and worked in common and grain was stored in common. People were supposed to take what they needed and there was no private property. This provided no incentive or advantage to engage in hard work. This system quickly fell apart to the point where within two years half of them died of starvation while trying to eke out a living against the elements. As Captain John Smith explains:
“When our people were fed out of the common store, and laboured jointly together, glad was he could slip from his labour, or slumber over his taske he cared not how, nay, the most honest among them would hardly take so much true paines in a weeke, as now for themselves they will doe in a day: neither cared they for the increase, presuming that howsoever the harvest prospered, the generall store must maintaine them, so that wee reaped not so much Corne from the labours of thirtie, as now three or foure doe provide for themselves. —John Smith, “General Historie of Virginia Vol 1: New England & the Summer Isles.”
What saved them? The establishment of a system of private property that each family unit tended individually, resulting in hard work, thrift, survival and then prosperity for all. It is true that in capitalist societies, some people have much more than others; but that is because of abundance: "Wherever there is great property, there is great inequality" —Adam Smith. Does that make us greedy? Hardly. Americans rank as the most generous in the world, in terms of both time and money. We are happy and eager to share our abundance and good fortune with others. In fact, a new academic study in Psychological Science found that more individualistic societies feature higher levels of altruistic generosity than more collectivist ones.
In America, you have the right to enjoy the fruits of your own labor but you must not expect to live off the sweat of another man’s brow. You are expected to work and to contribute to the economy. We believe in providing equal opportunity to all citizens, but that it is up to them to make something of themselves through their own efforts.
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[This is the first of an 8-part series. We’ll be posting one new update a week in December and throughout the next year.]