Capital Idea

...He wisely refrains from the temptation to concoct a response of academic proportions, and uses simple language and real-world examples such as taxes, health care, and the environment...

...The more responsible strategy would be to have “national competition in health insurance...

...It will fortify its supporters, and challenge critics to put their beliefs to the test...

...A high price for energy reduces demand by punishing waste,” writes Donlan, while a “low price does little to make people want to use energy frugally...

...Well, yes and no...

...Donlan is the editorial page editor at Barron’s National Business and Financial Weekly and for 15 years has written one of the most thoughtprovoking columns on economics and politics that you’ll ever fi nd...

...Real free trade leads to new economic opportunities, more domestic and international jobs, and more freedom of choice...

...Commerce is the constant conversion of things into money, and money into things...

...To his credit, he succeeds both in promoting capitalism and debunking its many myths and detractors...

...Donlan will criticize Democrats and Republicans who have strayed away from the principles of small government and free market ideology...

...Thomas Donlan’s is a spirited defense of all that is good about capitalism...

...Donlan examines aspects of some 200 years of economic progress in a mere 12 pages, including the dawn of British wealth in mining and milling, the manufacturing of cost-effective iron and steel, the birth of money and fi nance during the Industrial Revolution, technological progress, and Thomas Edison’s second greatest invention after the light bulb, “the system for generating, distributing, and selling electricity...

...George Bernard Shaw once noted, “With the exception of capitalism, there is nothing so revolting as revolution...

...Most individuals know why they believe in capitalism, but very few produce supporting arguments in favor of it...

...There are anti-globalization activists who believe in conspiracy theories of a small cabal of capitalists controlling the levers of the global marketplace...

...At the same time, Donlan decries the Robin Hood principle since it is “unjust to tax a dollar of income differently depending on who earned it...

...But he or she is not alone—especially in the midst of the current fi nancial crisis...

...On health care, Donlan rejects universality and supports a market-based model that supports choice and price competition...

...As Donlan points out, “nothing in capitalism demands that we waste resources and labor,” and capitalists by nature support market-driven strategies to determine the “lowest possible cost” of an item...

...While lower prices might make us feel better in the short run, they increase the temptation for people to overuse energy sources and waste this valuable resource...

...It seems to be pretty wide-ranging...

...Donlan takes on capitalism’s critics at their core values: the issues that matter most to them, and the issues they perceive that capitalism has destroyed...

...At the same time, there are few economic ideas or concepts that have historically had the ability to generate such raw emotion...

...One of the more impressive chapters in this impressive volume deals with the essential elements of capitalism: investment and invention...

...The list of doubters includes economists, small business owners, large corporations, and a surprising number of so-called conservative thinkers...

...BY MICHAEL TAUBE Capitalism has played a crucial role toward greater infl uence and respect for private ownership, trade liberalization, and free market economics...

...For those who cannot afford it, government welfare departments could subsidize premiums directly or put cash in the hands of those capable of making their own choices...

...His writing is straightforward, articulate, and not blinded by partisan loyalty...

...While the Patrick Buchanan School of Protectionism certainly has its base, today’s capitalists would more likely support open trade borders and the free exchange of goods...

...In A World of Wealth Donlan sets out to prove that “free markets are effective” and “capitalism provides superior solutions to most of our looming problems...

...To keep costs low, they could work with groups assembled by churches, social clubs, neighborhood organizations, credit unions, banks, professional group assemblers, and, yes, even employers...

...Karl Marx declared that his “object in life is to dethrone God and destroy capitalism” and Upton Sinclair wrote that “fascism is capitalism plus murder...

...There are business leaders who will only cheer for capitalism when it works in their favor...

...Capitalists should be naturally offended by universal health care, which is neither effi cient nor free, and is ineffi cient and unaffordable since it will “limit available drugs and treatments or force patients to wait for them...

...What’s the beef...

...He’s a conservative by modern defi nition, and his appreciation for classical liberalism always shines through...

...Hence, “lower tax rates produced higher tax takes” and, by 2007, “higher economic growth and lower tax avoidance covered the loss of revenue from lower rates...

...And few people are in a better position to discuss the benefi ts of capitalism than Thomas G. Donlan...

...For example, when it comes to buying and selling energy, the capitalist should always favor higher prices rather than cheaper rates...

...Capitalism has proven that the invention of new products, combined with investment opportunities and strategies, has made our society stronger...

...Donlan correctly notes that there is a long history of American protectionism— including the protective tariffs introduced by Alexander Hamilton, and North-South struggles over trade and tariffs in the 1820s—but Americans who view free trade as a “painful form of foreign aid” are missing the real benefi ts: expanded creativity and effi ciency, economies of scale, technological spillover, and import competition...

...And by way of disclosure I’ve written a couple of columns in Barron’s under his stewardship...

...At least as well as they can now—and probably far better...

...There are individuals who don’t trust an economic concept they perceive only helps Big Government, Big Oil, and Big Tobacco...

...It’s quite logical, really...

...We already know this...

...What about free trade...

...In Donlan’s view, this capitalist “strategy” has changed the face of Europe, North America, and Japan, and is starting to have economic effects in China and India...

...In a society like ours, if we are going to defend the ideas that matter to us—capitalism, democracy, liberty, free speech, free markets—it’s important that we grasp what they mean, what they do, and how they benefi t us...

...Today, you can still fi nd the occasional radical standing on a soapbox at Speakers’ Corner blasting away at capitalism...

...Can everybody afford such a system...

...While there may have been initial concern about prosperity and population growth, it has turned out that “prosperity converts people into consumers, increasing the market for goods, and enough prosperity creates security and reduces people’s desire for large families...

...Donlan describes the benefi ts of George W. Bush’s reduction of top marginal tax rates: This strategy enabled high-income earners to acquire more money and shoulder a greater percentage of the tax burden...

...As he envisions it: Imagine hundreds of companies competing for business on the basis of price and service, as if they were selling homeowners’ insurance or investments...

...Michael Taube is a former speechwriter for Canadian prime minister Stephen Harper...

...The capitalist take on taxes is clear and simple: Keep them low and equal...

...He also explores capitalism’s creative component, “that neither material things nor money are enough to create wealth...

...So Donlan supports the notion of a simpler tax system—and a fl at-rate tax based on either income or consumption—to create fairness rather than the “progressive” system currently in place...

...My guess is that there will be a handful of people who will whip through these chapters, skim reviews like this one, and say, “Why should I read the whole thing...

...With so much misinformation about capitalism available for public consumption, it’s important to dispel the wide-ranging myths and reemphasize the virtues...

...With a higher cost for energy at a market-driven price level, an energy shortage is far less likely...