IT'S NO ACCIDENT
that the infant mortality rate inIran
is more than six times worse than in the U.S.
Nor is it random that income at the poverty level in America is still significantly higher than the average wage in China, where the per-capita GDP is a mere $4,400, compared with $37,600 in the U.S.
And there's a reason why people typically live 10% longer in America than in communist North Korea, where the average male dies at 68, an age we in the States now consider the prime of life, not the end of it.
How are such immense differences explained? Is the water in Washington, D.C., so different than that of Pyongyang? Does the sun never shine in Beijing? Are Americans born with magic powers that Iranians don't possess? Of course not.
The reason is capitalism.> And indeed, when pressed, even the diehard socialists would have to agree that capitalism works. From vaccines to video games, the quality of life and abundance of wealth created by a competitive, free-market economy simply can't be denied.
See the chart below.
|Got It Made in the U.S.A.|
APPLET PLACEHOLDER: archive= height=300 width=450
|Source: CIA Factbook 2003|
But what most people don't realize, or most likely just don't care to admit, is that unbridled, laissez-faire capitalism isn't just efficient, it's right. Capitalism is the only social system in history based exclusively on the concept of individual rights, which our country's framers put forth as "life, liberty and the pursuit of happiness." Capitalism isn't just convenient it's just.>
Under capitalism, each person's life is his or her own, not the property of the state, the public nor the "common good." As capitalists, we are neither slaves nor masters, but traders whose relationships are voluntary and to mutual benefit. And while we are free to pursue happiness, we aren't guaranteed to find it nor permitted to sacrifice other individual's rights in order to obtain it.
These days, a capitalist is routinely thought of as a crook a dangerous, conniving hustler who'd do almost anything for a dollar. Capitalism is something that needs to be tamed or controlled, a notion reinforced by publicity-hungry regulators (read: Eliot Spitzer) who exploit the public's bloodlust for revenge over stock-market declines. It's a mischaracterization born from the Enron and WorldCom scandals, two isolated incidents that became a trend piece in the New York Times, thus a scapegoat for a sagging stock market and ultimately a condemnation of an entire way of life.
Yet nothing could be further from the truth. After all, the executive who cooks a company's books and defrauds investors isn't a capitalist, but a thief. Although its critics would have you believe otherwise, capitalism isn't a license for anarchy, criminality or simply doing whatever you please.
So why don't I skip the philosophy lesson and just stick to stock tips? Well, because a successful trader is one who isn't only confident in his ability but in the moral foundation by which he conducts his affairs. Despite grandstanding regulators and scandal-hungry media, the truth is that a capitalist isn't a crook, but a profoundly moral and just element of society. I'm comfortable saying that. Are you? Alas, few are.
Maybe that's why I'm looking abroad these days. I believe countries in Latin America and Eastern Europe, for example, where capitalism is a more recent development, have the biggest potential for dramatic change from it's beneficial effects. Because while the U.S. is the birthplace of free-market capitalism, we most certainly don't have a monopoly on its adoption.
Open your ears people, because something frightening is happening here. Most Americans are able to appreciate capitalism's practicality, but few, most notably our elected and upcoming crop of political leaders, are able to enunciate its profound morality as a system that protects the largest minority group in existence the individual. If that doesn't worry you, then it should.
Jonathan Hoenig is portfolio manager at Capitalistpig Asset Management, a Chicago-based hedge fund.>