Saturday, August 23, 2008

The Erosion of the Capitalist Ideal

The rapid growth of the Chinese economy leaves most Americans feeling a little envious. With the U.S. economy limping along under the weight of the housing bubble and the deleveraging of global financial institutions, one cannot help but marvel at the economic growth that has propelled the Chinese economy to new heights while enriching the nation and its people. The policies of the Chinese government have often elicited disapproval from political leaders in the U.S., but their version of capitalism has enabled rapid growth by squashing the dissent that can delay or derail that which is in the best interest of the majority. Concurrently, the United States has grown complacent in its role as economic superpower, diverting its collective focus from growth and innovation to litigation, regulation, and special interest handouts.

Comparing China and the United States leads to a tale of two distinct philosophies. While embracing tenants of capitalism, China maintains significant government control and ownership of key industries leading to centrally planned growth driven by the strategic planning of party leaders. Chinese leaders manage economic growth and investment in a strategic manner that attempts to sustain economic growth and the development of infant industries while encouraging foreign investment and cooperation. The United States, on the other hand, has drifted slowly from the ideal capitalist economy towards a bastardization of French socialism. Government bailouts, a paternalistic tax code, nationalized industries, and political support for a welfare state have gained prominence in the public psyche. The ability of the Chinese, for better or worse, to quash dissent and act as a coordinated whole has led to dramatic growth while the United States dissolves into competing factions that quest to secure their scrap of the next government handout.

The U.S. economy will continue to flail and hemorrhage until the U.S. citizenry rebukes efforts, spearheaded primarily by prominent Democrats, to create a welfare state financed by a dangerous scheme of income redistribution. When the government well finally runs dry, the predatory scavengers that picked clean the bones of the U.S. economy will be left in complete befuddlement as they ponder how taxes on the “wealthy” could fail to provide for their every need and fancy. Just as the rapid economic development of the Chinese has demonstrated, the capitalist ideal promotes the greatest economic benefit for society, but does not ensure equal distribution of the economic gains. The U.S. economy and populace will continue to suffer until its political leaders realize that interfering with the natural allocation of capital and income leads to suboptimal outcomes for all.