Myths, Lies and Capitalism | 5 Minute Video

Does free enterprise hurt the poor? Is it unfair and driven by greed? Did it cause the Great Recession? In five minutes, Arthur Brooks answers these questions and more about capitalism.

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Script:

Here are five myths about free enterprise.

Myth Number One. Free enterprise hurts the poor.

Since 1970, the percentage of the world's population living on the equivalent of less than a dollar a day has fallen by more than 80 percent.

This was not the result of foreign aid or U.N. development projects. It was the spread of free enterprise that achieved this miracle. In China alone, free trade and foreign investment -- investment, not aid -- lifted 400 million Chinese out of abject poverty in just the 20 years between 1981 and 2001.

There has never been a force for helping the poor that has come close to free enterprise.

Myth Number Two. Free enterprise is driven by greed.

Entrepreneurs are driven by a fierce desire to control their own destiny. They strive for something I call "earned success."

For some people, earned success means business success; for others, it means raising good kids, building a nonprofit, or making beautiful art -- whatever allows people to create value in their lives and in the lives of others.

Only free enterprise gives them the personal freedom to do that.

Myth Number Three. Free enterprise breeds envy.

Since 1973, the General Social Survey has asked Americans whether they believe good luck or hard work is more important in getting ahead. For 40 years, between 60 and 70 percent of Americans have chosen "hard work." In a recent poll, the Pew Research Center found that 88 percent of Americans said they admired people who get rich by working hard.

This view is unique to the United States. According the World Values Survey, Americans are more likely than those of other nations to attribute success to hard work. Americans are twice as likely to do so than the French.

In a society that rewards initiative and offers opportunity, free enterprise fosters aspiration and ambition. It is in societies that have much less economic freedom and far fewer entrepreneurs and therefore economic stagnation that you find envy, resentment, and often unrest. This is the case in Europe, where people demand more and more government benefits instead of demanding to keep more of what they earn.

Myth Number Four. Free enterprise caused the Great Recession.

It wasn't free enterprise that was at fault; it was the lack of free enterprise. Statism and its co-dependent spouse -- corporate cronyism -- melted down our economy.

As my American Enterprise Institute colleague Peter Wallison has documented, two decades of misguided government policy created the conditions that led to the housing bubble. When housing prices collapsed, so did the whole financial system. And who showed up first in the bailout line? Large corporations, including car companies, big banks, and the government-backed mortgage giants Fannie Mae and Freddie Mac.

This isn't the free market at work -- not even close. It's a toxic mix of big government and its corporate clients. The solution is more free enterprise: where entrepreneurs put their money on the line and earn a profit or suffer a loss.

[nikolavgeorgiev]

1.   You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2.   What one person receives without working for, another person must work for without receiving.
3.   The government cannot give to anybody anything that the government does not first take from somebody else.
4.   When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation.
5.   You cannot multiply wealth by dividing it.

[adolfarrakahane]

 "The inherent vice of capitalism is the unequal sharing of blessings, the inherent virtue of socialism is the equal sharing of misery."~Winston Churchill.

[davetheisen]

What's more selfish and greedy? "I want the money I earn to be proportionate to the work I put in, and the harder I work the more money I will earn" or "I want more money from the government for doing nothing"

[davidtimothy]

You missed a fact; Greed will exists with or without capitalism, and so will laziness, but under capitalism If your greedy You HAVE to innovate and improve other's lives to satisfy that greed.

[chriswilson]

Government is to blame for at least 90% of any countries problems. Seriously true capitalism works the best out of any system, but once government gets involved it starts corrupting it like cancer. If it's not a free market then it isn't worth bothering.

[bryanjacobs]

Without profit as an incentive, people don't work as hard. That's why government buildings and projects take forever and are poorly kept, while business ventures are well made and well kept. The government doesn't have the threat of going out of business to incentivize them to do things well like the private sector does.

[Moshealthtips]

wealth redistribution is a slippery slope

[spicyfrank]

I'm happy there are channels like this that calmly and intelligently outline issues like this.

[felixmarvelo]

"This is the case in Europe, where people demand more government benefits rather than demanding to keep more of what they earn."

Wow. I never thought of it like that before. That makes a lot of sense, actually. Of course, there has to be SOME government benefits, but this video has given me a lot to think about. Thanks, uploader.

[Aristocles]

Thing about safety nets: you don't want to have to use them. If lots of people are falling from the trapeze onto the net, the question is why are they falling? You won't improve the act by strengthening the net, you improve it by preventing them from needing the net to begin with.

[jacobhamblin]

I love these videos, but it really seems to me they don't have much of an affect. The people who actually believe these kind of things will just pass this video of as corporate propaganda, and proceed to call for more and more socialist policies.

[Extreme_Gardening]

Why just accept that greed is bad? What is wrong with greed? Greed is just a desire for more than basic survival, this is an incredibly great thing for a person. Yes, capitalism is built on greed and that's what's great about it.

[BrickfilmMan]

Great job debunking some of the misconceptions of capitalism! You're right, fairness is rewarding merit. Those who work harder would obviously get more rewards.

[guitarhack]

I grew up in a ****hole of an area.  I was abused, beat up, shot at etc. etc...I worked very hard, took chances, bounced back from multiple failures and now I'm so called rich. Should I feel bad over it?  I give to the poor, take super care of my workers, pay them very well - life is good.  Capitalism is morally superior to any other economic system.  And God is Great!  I just had to throw that in there too...

[HeavyK.]

Would you rather?
1) Lift everyone out of abject poverty and allow a few to create unimaginable wealth.
OR
2) Make everyone equally poor.

[fathertime]

The "social safety net" used to mean "war widows". Now it means, "enabling people to make bad decisions for an entire lifetime". Before the 1930s the social safety net was mainly mutual-aid societies. That solution is much better than gov't charity.

[rainbowodysseybyjonlion]

I was a hardcore communist in high school. I read the communist manifesto, and parts of Das Kapital (the unofficial sequal). I thought far leftism was the way to go. Until i visited my relatives in Poland at around 2006. They told me all about the communist government policies. They wouldnt allow people to start their own business, with anything. They wouldnt allow people to organize groups in their own school. Or to go to church on certain days. It was horrible. Anytime the left gets full control, all of society turns to shit. Just ask someone from a communist country.

[nothosaur]

Excellent video. Economist Thomas DiLorenzo traced the history of merchantilism (which this video calls "crony corporatism") over the centuries back to the struggles between Hamilton and Jefferson, Clay and Calhoun, the Whig Party, etc. "Hamilton's Curse" is a great book he wrote on this topic. The original tea party of Boston was partly a potest against unfree enterprise represented by the the British East India Tea Company. The government would subsidize businesses and absorb their losses for them, creating monopolies and discouraging free competetion

[harrygw-lp]

My Grandad was born in abject poverty. His parents were so poor he had to go to a children’s home. He worked in school got an amazing job and owns to properties. The one he lives has one of most amazing gardens I’ve ever seen!!!!

[SarlCaganGuy]

OH MY GOD. I cannot agree more with this video!