The Market Will Set You Free | 5 Minute Video

It’s time for free-market capitalism to reclaim its legacy as a creator of prosperity — not just for citizens of the Western world, but for people everywhere. It’s not capitalism that has to justify itself; it’s everything else. Why? Because everything else has resulted only in poverty. Does that surprise you? Are you skeptical? Andy Puzder, author of “The Capitalist Comeback,” has the charts and data to prove it.

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Script:

Take a close look at this…Jonathan Haidt, the noted New York University psychologist, calls it "the most important graph in the world."  

Why does he say that?

Because he knows this graph reveals a simple, inescapable fact: there is no substitute for free market capitalism as a promoter of human prosperity.

Let it be noted that Haidt is no one’s idea of a conservative. But when hard evidence stares him in the face, he’s not going to look away.

The graph is based on the research conducted by the late British economist, Angus Maddison. The numbers along the X-axis are years—two thousand of them. The numbers on the Y-axis are dollars—all of them, divided by the number of people on the planet. It’s what’s called GDP per capita, which is the world’s economic output divided by its population. GDP is considered the best measurement of a country's standard of living. And, in this case, the world’s standard of living.

Often when I show this graph to students, I get this comment: “That’s not capitalism; it’s just the impact of the Industrial Revolution.” 

So I show them another chart by the Maddison Project. This one breaks the GDP hockey stick into regions. As you can see, there are a number of hockey sticks. But note that they don’t rise at the same time. The United States surged first.

Why?

Well, in a very fortuitous coincidence, the year 1776 witnessed both the signing of our Declaration of Independence and the publication of a book called The Wealth of Nations by the Scottish economist and philosopher, Adam Smith. In his book, Smith explained how to create a modern free market capitalist economy and the benefits of doing so.  

America’s wise founders took Smith’s principles to heart, and within a mere 100 years—the blink of an eye historically—capitalism turned the United States from thirteen backwoods colonies into the world’s largest economy. And it has held that position ever since. 

Western Europe shot up as well, but later. It rose steadily during the Industrial Revolution and then experienced a sharp rise after World War II when, between the end of the war and the mid-1960s, it fully embraced the free market.

Japan, too, shot up after World War II—surpassing Western Europe for the first time after the US helped the Japanese transition to a democracy and a free market capitalist economy.

Eastern Europe took off after it was released from the Soviet Union and socialism in 1991.

China did likewise after the Chinese moved away from strict socialism and implemented some limited free market policies. One can only imagine where China would be now if its leaders had fully unleashed the forces of the free market.

Yes—during this period of economic expansion, the wealthy got wealthier. That always happens when new wealth is created. But the middle class and the poor also greatly benefited.

Here’s another telling chart. This one is from the World Bank. In 1820, 94% of people lived in extreme poverty. Thanks to capitalism, by 2015 that number had declined to 9.6%—single digits for the first time in human history. Now, it’s still too many, but if we are going to reduce the number even more, we need to understand what caused the decline: free market capitalism.

If we combine the Angus Maddison hockey stick chart and the World Bank data on extreme poverty, what we get is something quite amazing: unprecedented global prosperity and an unprecedented decline in poverty across the globe over the past 200 years. That’s capitalism in a nutshell.

[jayone]

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. - Winston Churchill

[joshuawells]

"The inherent vice of Capitalism is the unequal sharing of blessings; the inherent virtue of Socialism is the equal sharing of miseries." - Sir Winston Churchill
"The problem with Socialism is that eventually you run out of other people's money"-Lady Margaret Thatcher

I know that they were great leaders from across the pond, but there is a lot we can learn from Churchill and Thatcher.

[jacksonpayne]

Everything in this video is correct. I'm currently taking an economics class at a pretty liberal university and even the professor acknowledged that capitalism is the best tool to combatting human suffering and poverty

[marktylerson]

Capitalism: My money is my money because I've earned it.


Socialism: Your money is my money I don't know. It just is.

[roctechproductions]

"The Truth will set you Free"

[KantiDono]

GDP per Capita isn't a perfect measure of individual prosperity, just the best one we've invented so far.

Just like Free Market Capitalism isn't a perfect system, just the best one we've invented so far.

[jasonh]

Under Socialism having a full belly and a place to live depends on other people’s goodwill and benevolence

Under capitalism a full belly and a place to live depends on you. Even better thank that - you choose the food and house

[yasuhohirose]

the freer the market, the freer the people

[scottgroves]

If you get banned from all banks, with the free market you can build your own bank

[gorilanator]

I live in Argentina and we still hadn't learnt anything...

[IshfaaqPeerally]

"Capitalism is the greatest thing that ever happened to mankind"

- Jamie Dimon

[ShnoogleMan]

Markets and capitalism are not synonymous, and free markets and socialism are not antithetical.
Capitalism means private ownership of industries.
Socialism means worker ownership of industries.
Markets refer to a system in which people are able to buy and sell things.

[PhucMi]

Capitalism is a good system for economic productivity but it doesnt mean we cant have a social safety net with universal healthcare for people in unfortunate circumstances. These social services are compatible with capitalism since even South Korea has universal healthcare despite being very capitalist.

[nickdimopoulos]

3:11
"In 1820 everyone was poor
Until capitalism kicked down the door"

[ArnoSnyman]

I wish our South African government can see this. They believe implementing extreme socialist policies will uplift the poor. Impossible if only 11% of us pay income tax (getting smaller due to over taxation and emegration), 27% are unemployed (which increase by the day) and a growth rate of less than 1%.

[Rven_II]

"The market will set you free"...until you break a knee and get bankrupt because no insurance for you and non-cense medical prices...got to love that

[silasbland]

"Capitalism has been called a system of greed—yet it is the system that raised the standard of living of its poorest citizens to heights no collectivist system has ever begun to equal, and no tribal gang can conceive of." - Ayn Rand

[laserloui]

The sad thing is that we don't have a free market for quite some time now. Government has become an active player instead of being the referee. Government has gotten so big and powerful with so much influence over the free market that money and special / corporate interests dominate politics in order to not have a level playing field in certain industries. Government is the reason for all major problems today and for why the free market is no longer free. And instead of realizing this and reducing, limiting government to address this issue people are screaming for MORE government. Sad times indeed.

[watchdealer]

Zimbabwe and Botswana border each other. Both countries have near-identical demographics. Zimbabwe went from the bread basket of Africa to one of the world's poorest nations while Botswana's free market policies allowed it to prosper as one of Africa's richest nations.

[Matthew_Klepadlo]

Have you ever had any impossible dreams?
They’re no longer impossible in the free market.