Capitalism Doesn’t Work, Mr. Gates?

Discussion in 'Wall St. News' started by rubibond007, Feb 22, 2008.

  1. By Larry Kudlow

    Bill Gates, bloviating at the World Economic Forum in Davos, Switzerland, is issuing a clarion call for a “kinder capitalism” to aid the world’s poor. Mr. Gates says he has grown impatient with the shortcomings of capitalism. He thinks it’s failing much of the world. This, of course, from a guy who’s worth around $35 billion (give or take a billion).

    Don’t you just love it?

    A guy without a college degree who invented a new technology process in his garage that literally changed the entire world, a guy who took advantage of all the great opportunities that a free and capitalist society has to offer and got filthy rich in the process, is now trashing capitalism and telling us it doesn’t work. What chutzpah.

    For all his do-good preaching, Mr. Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people out of poverty and into the middle class over the last decade. Think China. Think India. Think Eastern Europe. (Maybe even think France under Sarkozy.) Mr. Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period.

    The latest stats out of China are revealing. Here’s a country that was a basket case not so long ago and today is the world’s fourth largest economy — hot on the heels of Germany, the third largest economy. China just reported 11.2 percent fourth-quarter GDP, its fastest growth rate in thirteen years. Total output for China is now 24.7 trillion yuan, or $3.42 trillion at current exchange rates.

    At $14 trillion, the U.S. economy is still four times the size of China’s. But we’ve had free-market capitalism for more than three-hundred years. China’s only had it for about fifteen. China is still an undemocratic, authoritarian, and repressive society that lacks the benefits of political freedom. But it was the late Milton Friedman who argued that the onset of free-market capitalism was the precursor to full-fledged democratic capitalism. China’s on the right track.

    Mr. Gates says he has witnessed steep income and cultural inequities in his travels around the world, in particular to Africa. But for this he should blame the absence of capitalist principles, not capitalism itself. Even the most compassionate corporate executives are not going to bring prosperity to impoverished countries with statist economies. Until Africa’s nations undertake the market-oriented reforms that have boosted China and the other Asian Tigers — like South Korea and Taiwan — they will continue to rank at the bottom of the world prosperity scale.

    The Heritage Foundation/Wall Street Journal 2008 Index of Economic Freedom reveals how free-market economics is spreading like wildfire while state-run socialism is on the decline. And it’s no wonder why. The free-market countries are prospering mightily while the least-free economies are mired in poverty. We’re talking North Korea, Cuba, Zimbabwe, and Iran. Also noteworthy is Venezuela. As the neo-socialist Hugo Chavez attempts to adopt Fidel Castro’s failed economic model, he’s sinking his nation toward Cuba-type poverty.

    Economist Mark Perry, on his Carpe Diem blog site, reports that both the U.S. share of world GDP and its global stock market capitalization are shrinking. But this isn’t a bad thing at all. It doesn’t mean that America is heading downwards. On the contrary, it means that newly freed economies are heading up.

    The reality here is that the rising tide of global capitalism is lifting all boats that employ it. Capitalism works. It’s a good thing. It’s the key to unlocking a nation’s prosperity. In fact, free-market capitalism is the greatest anti-poverty program ever devised by man.

    Another billionaire, George Soros, the Davos partygoer who finances near every left-wing political-action group on both sides of the Atlantic pond, recently wrote in the Financial Times that the era of capitalism is coming to an end. Soros, of course, has been predicting this for at least twenty years — through the greatest world boom in history. And how was it that Soros made his money? Trading currencies in the technologically advanced world financial markets, the very same markets that were spawned by 20th century free-market capitalism.

    So I just have to smile when billionaires like Bill Gates and George Soros turn cold shoulders to the blessings capitalism bestows. Or when their buddy, Warren Buffett, broadcasts the importance of hiking tax rates on successful earners and investors.

    Look fellas, the command-and-control, state-run economics experiment was tried. It was called the Soviet Union. If you hadn’t noticed, it was a miserable failure.
  2. What an idiot. Gates didn't say that. He said that Capitalism should have a social side. More butter than guns I guess. He is maybe sending a message to his employees about elections.

  3. Ah yes Mr. Kudlow, advocate of laissez faire capitalism but when things go to hell its time to get government to bail out the system. Privatize the profits but socialize the losses.

    I notice that real wages were up a whole 1% since 2001. No doubt a goldilocks economy we have here.
  4. loik


    Stop bailing people out!
  5. Jeromek1


    Who better than him to give his opinion about capitalism? he has some experience..... doesn,t he?
  6. Excellent Commentary All

    I was trained as an economist...with an emphasis in prices...
    primarily commodities......

    I have been trading since 1978...and have lived in several countries...

    Capitalism should be increased not decreased....and socialism should be limited....neither should exist in their present form..

    Picture your government with the following...

    E Government

    E Education

    Enhanced electronic stock markets representing all companies world wide...broadbased stock ownership...

    Non oil energy...Non agricultural product energy...

    Limited legal largesse

    Medicine not as a business

    Taxes.....consumption tax only....the same for each country...

    One currency....worldwide....

    In the name of efficiency and fairness, the above should be implemented by every country....

    Capitalism creates the highest available valuations ....whereas socialism creates lower valuations....thus less to spread around...on the very same assets....
  7. toc


    If Capitalism does not work then what does?

    Nomad living? :D
  8. I believe as a result of capitalism there is more money given to various charities every year. Sure don't hear about much of that in non-capitalist countries. Bill Gates and Warren Buffet both seem to think everyone should give away their wealth, just like they did. Oh, wait they put it all in charitable trusts that avoid the taxes they both claim the rich should be paying more of and neither seems to be living a lesser lifestyle than beofre, so just maybe they really didn't think it was to good to practice what they preach. They both could give away all their wealth to this point in time and still come out with income to live the rich life every year there after. All as a result of capitalism! As always there a re those that have to find the wrong things. Capitalism has faults, but I'll take it everyday over Socialism, Communism, Dictatorships, Etc.
  9. More propaganda for the Democraps.. blah blah blah
  10. In the modern age governments have evolved towards something of a hybrid between socialism and capitalism.
    When people start making noise about which we've become or ought to be its always code for where and how the tax burden should fall. Kudlows just another sycophant like Limbaugh or O'Reilly who if they beat the owners drum enough it'll make them rich too. You don't get rich being a populist -- you may make some money but you don't get rich, not on the same scale. The only businesses those demimondes ever raised from infancy are their mouthes.
    #10     Feb 22, 2008