[Smart Economics] Why Is Capitalism Superior?

Capitalism Is a Principle of the World for a Better Life

The saying “a frog in a well” is familiar to everyone. It refers to someone who knows nothing of the wider world and, being confined to the well, thinks that is all there is. There is a story inspired by that frog in the well. Wanting to escape, the frog kept treading and jumping in the milk that had collected inside the well, and eventually the milk coagulated into butter. The frog stood on it and finally escaped. Why did the frog so desperately want to get out? Perhaps because it longed for freedom. How stifling that well must have been. A world without freedom is like that frog trapped in the well—a prison-like world.

Expanding Individual Freedom Enriches Life

Human civilization has gradually expanded individual freedom. The system that has done this is capitalism. As capitalism has developed, the range of freedom individuals can enjoy has widened even further. In a capitalist society, people are not confined in a well or oppressed. They are allowed to come out of the well and live freely to their hearts’ content. What happened to the frog after it escaped? It likely thrived in a free world, making the most of its abilities. And remembering the suffering it endured inside the well, it probably helped other frogs trapped there escape as well—just as people seek freedom by defecting to or immigrating to countries where capitalism is more developed. That is why capitalism, which guarantees freedom, is in itself just.

All flowers have fragrance, but the scent of roses in particular is said to contain compounds that stimulate human hormones. That is why the smell of roses lifts people’s mood, and why roses are so often given during marriage proposals. If roses have one drawback, it is that they have many thorns. For this reason, flower shops usually remove the thorns when preparing roses for sale.

But botanists say that thorns are essential for the survival of roses. Roses have thorns because of insects: the thorns along the stem prevent harmful bugs from crawling up and damaging the flower. If, without understanding this, one removes all the thorns from a rose, pests will crawl up and harm the bloom.

Capitalism, too, can be compared to a rose. Capitalism makes our lives freer and more prosperous. Economically, it creates jobs and brings material prosperity. In other words, it is just in itself because it expands freedom, and it is splendid like a rose in that it is a system more favorable to economic development.

But nothing in the world is perfect, so people may feel dissatisfied with capitalism. In capitalism, which is by nature more transparent and open, people can see income gaps widening between themselves and others, and they can easily voice their complaints. They may feel relatively poor and unhappy.

Because of these emotional factors—these thorns that torment them—people often become absorbed in breaking off the rose called capitalism or stripping away all its thorns. In doing so, they make it impossible for the flower to bloom.

But rather than pointing only to the immediate problems before our eyes and hastily concluding that capitalism is wrong, would it not be wiser to be more patient and make greater efforts so that, beyond those problems, capitalism can become a fully blossomed and just system? In other words, we must guarantee individual freedom through capitalism, respect people’s choices so they can exercise their abilities, and enable true justice to be realized. Only then will we see a rose in full bloom.

No Better Way of Life Than Capitalism Has Yet Been Experienced

Capitalism refers to the free democratic market economy system. The market drives out darkness like sunlight. It removes mold-like problems and hardships from every dark corner. Yet people are not grateful for sunlight. Like air, they take it as something always there, and so they live forgetting the value of the market. The brightness of the market economy can prove its value only when contrasted with a society without light. In a society that forgets the value of that light, darkness gradually closes in. People then live groaning in that darkness.

Capitalism is the core principle of the way of life through which humanity has built civilization and evolved. We cannot be certain that capitalism is the best possible system, but considering that humanity has not yet experienced a way better than capitalism, it is self-evident that there is no system superior to it.

And yet anti-capitalists and politicians who champion populism criticize capitalism as a system that increases income inequality, unemployment, and environmental pollution, and one that benefits only the rich or large conglomerates. But much of this criticism stems from misunderstandings born of a failure to properly understand the way we live. These are also issues that, from the standpoint of tolerance, ought to be understood and accepted. Only then can they be prevented from becoming more serious and be resolved efficiently. In fact, countries that viewed such problems only negatively and tried to solve them forcibly through government intervention often produced side effects such as violence and plunder, dishonesty and corruption, human rights abuses, and repression.

By contrast, under a capitalist system, such problems occur less frequently and have been resolved in the most natural and effective way according to the principles of the market economy. Therefore, attempts to replace capitalism with another system or combine it with one are undesirable. As has been the case until now, the best course is to allow capitalism itself to continue evolving.

△ Please remember

The market drives out darkness like sunlight. It removes mold-like problems and hardships from every dark corner. Yet people are not grateful for sunlight. Like air, they take it as something always there, and so they live forgetting the value of the market. The brightness of the market economy can prove its value only when contrasted with a society without light. In a society that forgets the value of that light, darkness gradually closes in. People then live groaning in that darkness.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

---

Original title: [스마트 경제 읽기] 자본주의 체제가 왜 우월할까

Author: Sung-no Choi

Date: 2021-03-08

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=5&idx=23551