Thanks to capitalism — with a reasonably steady dollar, lower marginal tax rates, and more sensible regulation — we are now living in an epoch so prosperous, compared to yesteryear, that most take it for granted. Many presidential aspirants threaten to resurrect the leftist policies that delivered nothing but misery to workers. Weird.
It may not seem sporting to drag in facts but... let’s peek back and remember the misery from which unleashing the free market rescued us. On November 13, 1979 — 40 years, two generations, ago — the Dow Jones Industrial Average was at 814. This week it closed above 27,000.
Startling! What happened? Capitalism, once called Supply-Side economics and Reaganomics, continued by President Clinton, happened.
Turning the American stagflation around wasn’t pretty. But Reagan did it. Then, the U.S. economy took off like a rocket. A lot of other countries decided that they wanted to join the party and adopted his policies.
China’s Communist Party Chairman Deng Xiaoping famously said “Poverty is not socialism.” And “To be rich is glorious.” Almost a billion enterprising Chinese quickly took the cue. They used newly freed markets to pull themselves and their families out of abject poverty.
All in all, the world’s stock of wealth soared from $11T to $83T. This was, and is, huge. The left’s oft repeated promise of world starvation — that generation’s climate change — never materialized. Let's not go back to the brink of world famine.
George Gilder, whose 80th birthday we celebrated last month, wrote the “bible” of Reaganomics, "Wealth and Poverty." He became the most quoted living author by President Reagan. It sold over a million copies worldwide. Full disclosure, George was kind enough to furnish the foreword to a recently released book that I co-authored, "The Capitalist Manifesto," writing, “Capitalism is not the tawdry thing that socialists label and libel it. Capitalism draws on the highest and best human qualities.”
Communists persistently claim that capitalism is great for generating wealth but lousy at equitably distributing it to us worker bees. The communists are just factually dead wrong. As public intellectual Tim Worstall observed at Forbes.com a few years ago, “The average American today is 90 Times Richer than the Average Historical Human Being.” Worstall wrote, “By any historical, and by standards of all too large a part of the world today, all Americans are simply hugely, gargantuanly, richer than any but the fewest, most privileged, of our forefathers."
Contrast that stunning fact with the outcomes of socialism.
As economist Kristian Niemietz observed in Quilette, reviewing Aaron Bastini’s "Fully Automated Luxury Communism," “Thus, the fact that socialism has already been tried more than two dozen times, and failed every time without exception, should be somewhat relevant to this book. But on that issue, Bastani has next to nothing to say.”
OK, Capitalism has imperfections (although, with hard work it could be nearly perfectible). Let us paraphrase Winston Churchill’s observation about democracy: Many economic systems have been tried, and will be tried in this world of sin and woe. No one pretends that capitalism is perfect or all-wise. Indeed it has been said that capitalism is the worst economic system except for all those other forms that have been tried from time to time.…
That said, for the worst?
The principals of the Supply Side revolution had to endure massive ridicule. It was called “Voodoo Economics” from the Republican establishment, “Trickle Down” from left-leaning Democrats. It took guts to avert the descent into economic Hell.
To be fair, many Democrats of the day, Chairman Dan Rostenkowski, Sen. Bill Bradley, and Rep. Dick Gephardt among them, joined in. They were full participants in restoring capitalism and bringing about prosperity.
Today’s leading Democrats, by contrast, seem hell-bent on undoing our prosperity. The prosperity brought about by the Supply Side’s victory in the '80s is now much taken for granted. Big mistake.
In this season of gratitude some epic champions of capitalism, now senior statesmen, such as Robert Mundell, Arthur Laffer, Steve Forbes, Lewis Lehrman and, yes, George Gilder with the political quarterbacking of the late Jack Kemp, deserve our gratitude.
These intellectual samurai of the Supply Side paved the way for great progress toward a golden age of peace, prosperity, and human dignity. We’re not there yet. That said, the long march to the golden age, with the leadership now passing to the Millennials, is now within reach of its goal.
Gratitude is due to those who fought for our prosperity. Yet it is of greater importance that we heed the warning of Santayana, “Those who cannot remember the past are condemned to repeat it.”
A future of equitable prosperity lies with true free market capitalism. Not socialism. Just look at history.
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $83T. He served as a deputy general counsel in the Reagan White House, has worked closely with the Congress and two cabinet agencies, and has published over a million words on politics and policy in the mainstream media, as a distinguished professional blogger, and as the author of the internationally award-winning cult classic book "The Websters' Dictionary: How to Use the Web to Transform the World." He has served as senior advisor, economics, to APIA as an advocate of the gold standard, senior counselor to the Chamber of Digital Commerce and serves as general counsel to Frax.finance, a stablecoin venture. To read more of his reports — Click Here Now.
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