Capitalism, the world's greatest economic success story

I came across a great article in Forbes Magazine, adapted from Steve Forbe's new book, How Capitalism Will Save Us. Included was a series of rebuttals to common claims made by the economic illiterate. Enjoy:

Is Capitalism Moral?

THE RAP: Capitalism is an amoral, dog-eat-dog system founded on greed and the survival of the fittest.

THE REALITY: Capitalism is the world's most humane economic system, promoting the democratic values of a free and open society: hard work, cooperation, generosity, charity, and devotion to the rule of law.

Isn't Capitalism Brutal?

THE RAP: The free market is brutal: Big players with too much power crush smaller competitors. People are laid off without warning or protection. Individuals are vulnerable to ups and downs in remote sectors of the economy that have little apparent connection to their daily existence, suffering untold disruption to their lives and businesses.

THE REALITY: Democratic capitalism can be disruptive and unpredictable. But the process of "creative destruction" is critical to a healthy economy and society. New products and industries render old ones obsolete. Some jobs may be destroyed. But other jobs--more of them--are created. In this way, individuals and resources go where they are most needed by people and businesses, and wealth-producing innovations are developed. Without creative destruction, the economy would stagnate. Living standards would be lower and unemployment would be far higher.

Aren't The Rich Getting Richer At Other People's Expense?

THE RAP: The rich are a privileged group that prospers at the expense of everyone else, exploiting employees and customers to stay on top, while getting special treatment and tax breaks? Meanwhile, the poor get poorer and the middle class struggles to keep from falling behind.

THE REALITY: Rich people make their fortunes by creating opportunity and wealth for others. They do this by launching businesses that create jobs, by investing in new ventures, or by spending money on other people's products and services. The rich are not a fixed aristocracy. Who is rich and who is poor is always changing. You can't have a prosperous or innovative economy unless people are allowed to become rich.

Don't Regulations Safeguard The Public Good?

THE RAP: Without regulations and statutes imposed by government as the referee of capitalism, greed and selfishness would run rampant in unfettered markets. Regulations safeguard the public good. They promote public safety and ethical business practices, preventing business from cheating and ensuring that citizens abide by the rules of the road.

THE REALITY: The rule of law is essential to the successful functioning of democratic capitalism. Certain regulations are necessary in an open economy. Yet others are a response to political pressure from self-interested constituencies. Politically motivated, overly meddlesome regulations and rules produce unintended consequences, hurting the very people they are trying to protect. They micromanage the economy and stifle innovation, favoring incumbents at the expense of innovative outsiders.