CENTRAL VIEW for Monday, May 14, 2001

The Case for Freedom and Capitalism

Although Wonder Wife and this observer just published an action-suspense novel with the word “conspiracy” in the title, neither of us believe small groups of people can “conspire” successfully to effect world events. No. Instead, we think large groups of people can and do act in concert to change the course of human history.

The small-group conspiracies found in Ian Fleming’s James Bond novels are too simplistic a way to explain how the world works. Although fun to read and fun to watch when brought to the silver screen, the world really doesn’t work that way.

Mass movements, however, are another matter. The 20th Century saw the rise and the fall (we hope) of totalitarianism of both the Left and the Right. From the Left, Marxist-Leninist dictators such as Stalin, Mao and Pol Pot brought about the deaths of over 150 million human beings. From the Right, the Nazis, Imperial Japan and a host of dictators throughout the Spanish-speaking world accounted for the deaths of about 50 million inhabitants of Planet Earth.

Although the Left has been far more deadly, leftist and rightist totalitarianism are merely two sides of the same coin. Both sides get their start and draw their power from a population base that suffers from a lack of individual freedom and economic opportunity.

Just look at the world today. Where you see healthy, happy, prosperous people (I’m talking about the masses, not just the elites) you see both individual freedom and capitalism working in concert.

For the most part, this wealth-producing concert of freedom and capitalism occurs north of the equator and among the western Democracies. Why this is so is explained by the Peruvian economist Hernando de Soto in his book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.

De Soto reveals the accumulated assets of Egypt’s poor are 55 times more than the total of all of the investments ever made by foreign powers in Egypt, to include the Suez Canal and the Aswan Dam. But individuals do not own these assets. In fact, the poor people in the poor countries spend a lot of counterproductive time trying to hide or disown whatever assets they have based on their justifiable fear of government confiscation. Meanwhile, their totalitarian governments spend most of their time figuring out ways to confiscate the assets of the poor.

By contrast, the western democracies have a tradition of private property ownership and a system of standardized laws that produce the ability to create liquid or marketable capital from these owned assets. Unfortunately, this happy blend of Democratic freedom and capitalism is under attack from within and without.

The American taxpayer and Congress should heed the findings of Hernando de Soto. A system of taxation perceived to be unfair, oppressive and confiscatory leads to the hiding of taxable assets and the disappearance of assets leads to a reduction in capital available for investment in job- and wealth-producing enterprises.

For example, the Reagan tax cuts of the early 1980s set off 100 months of a boom economy. But the so-called Tax Reform Act of 1986 (Designed, in part, to keep the Donald Trumps of the world from having IRAs) eventually led to the recession that marred the last two years of the first Bush Administration and then made possible the “It’s the economy, stupid,” election of a Bill Clinton.

Meanwhile, the socialist Left disregards these historical verities. Witness the recent marches and riots against Capitalism, the attempts to disrupt the World Trade Conferences and the push for Globalism which is designed to take from the prosperous countries where freedom and capitalism are in flower and redistribute their wealth to those countries where totalitarianism and poverty reign.

Hernando de Soto lives in the third world. He has first-hand knowledge of why freedom and capitalism are the world’s best hope. We would be well advised to heed his findings.

William Hamilton, a nationally syndicated columnist, is the co-author of The Grand Conspiracy by William Penn.

©2001. William Hamilton.

See www.thegrandconspiracy.com for information about the novel mentioned above.

Dr. Hamilton can be contacted at:

Email: william@central-view.com