The Blessings Of Capitalism

The Blessings of
Capitalism
by Eric M. Jackson, author of The PayPal Wars
www.ericmjackson.com
Adapted from the presentation “Christianity & Capitalism” made
at Grace Brethren Church in Long Beach, CA on July 5, 2009.

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What has Capitalism Produced?
(i.e. Where’s the Beef?)

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The World Economy is No Longer Stagnant
A.D. 1
A.D. 1000
A.D. 2000
(Source: Angus Maddison, "World Population, GDP and Per Capita GDP, 1-2003 AD," at the Groningen Growth and Development Centre. http://www.ggdc.net/)

(Source: J. Bradford DeLong, “Cornucopia: Increasing Wealth in the Twentieth Century,” Department of Economics, U.C. Berkeley, http://www.j-bradford-delong.net/TCEH/2000/TCEH_2.html)
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The U.S. Economy is the World’s Largest

(Source: U.S. Patent Office, http://www.uspto.gov/web/offices/ac/ido/oeip/taf/h_counts.htm)
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Knowledge has Exploded

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U.S. Economy Has Created Millions of Jobs
(Source: Bureau of Labor Statistics, February 6, 2009. Available at http://www.ritholtz.com/blog/2009/03/hh-est-survey-differences/)

Poverty and Income Distribution
Capitalism has produced an uneven distribution of wealth between the rich and poor.
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(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)

But income levels for the lowest quintile (which is not a static group of people) have risen over time.
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(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)

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(Source: U.S. Depts. of Commerce, HUD, and Energy. Data available at http://www.heritage.org/Research/Welfare/bg2064.cfm)

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Hunger hasn’t been eliminated, but 92.5% of poor U.S. households (and 98% of all households) reported they had "enough food to eat" during the past four months.
(Source:http://www.heritage.org/Research/Welfare/bg2064.cfm)

The Third World
“Zero Sum Game” – Is the Developed World’s wealth the cause of the Third World’s poverty?
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Peruvian economist Hernando de Soto says lack of formal property rights impedes capitalism, robs Third World citizens of $9.3 trillion of wealth.

In spite of this, Third World poverty has fallen in recent decades as world GDP and trade have risen.

(Source: Jay Richards, Money, Greed, and God, p. 92.)

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Free Economies = Meeting Basic Needs
Moderately/Mostly Free
Mostly Unfree
Repressed
Free
(Sources: Economic freedom scores, The Heritage Foundation, http://www.heritage.org/Index/Ranking.aspx. Food expenditure data, U.S. Dept. of Agriculture, http://www.ers.usda.gov/briefing/cpifoodandexpenditures/data/2004table97.htm.)

Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)

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The Environment
No economic system is pollution-free.
“Natural resources” change over time.
Some analyses suggest global environmental conditions are improving—e.g. Index of Leading Environmental Indicators.
Bottom Line: What is the cost-benefit?
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“Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800%…let’s stipulate that all of the warming was the result of our prosperity and that this warming is in fact indisputably bad (which is hardly obvious). That’s still an amazing bargain. Life expectancies in the United States increased from about 47 years to about 77 years. Literacy, medicine, leisure and even, in many respects, the environment have improved mightily over the course of the 20th century…” – columnist Jonah Goldberg
(Sources: Index of Leading Environmental Indicators, Pacific Research Institute, http://special.pacificresearch.org/pub/sab/enviro/2008/study.html. Jonah Goldberg, “Global Cooling Costs Too Much,” http://article.nationalreview.com/?q=MmJiZDEyYzkxYWE0OWYxMWY4Y2ZjYzI2YmNmOGExMDE=.)

Key Takeaways
Capitalism isn’t a perfect institution, but it has a formidable track record across the centuries:
Economic growth
Explosion of knowledge
Income inequality but rising living standards for the poor
Greater availability of food
Longer life spans
Potential for the third world
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