In 1965, Barack Obama Sr. published an article in the East Africa Journal in which he considered the possibility of 100 percent tax rates.
The anti-colonial view is that capitalist wealth is stolen goods, and hence Barack Obama Sr. has no compunction about proposing that state power be used to confiscate it.
The premise of the progressive argument is that wealth and profits in today’s economy are being appropriated by greedy, selfish people who are taking more than their “fair share.” This is a new type of attack on capitalism.
in place of Mandeville’s terms “greed” and “selfishness,” Smith used a more precise term: self-interest. For Smith, self-interest is not good, but neither is it bad. What’s significant about self-interest, however, is that it works. Self-interest, mobilized in the right way, produces mass prosperity. But not by itself. Here is where Smith introduced his famous concept of the “invisible hand.” Individuals may be thoroughly self-interested, but through the “invisible hand” of competition, they are motivated to improve quality and drive down prices and thus to promote the material welfare of the community. Smith notes that by activating self-interest through the mechanism of competition, the entrepreneur promotes the prosperity of society “more effectually than when he really intends to promote it.”
Greed and self-interest, Smith recognized, do not arise out of capitalism. They arise out of human nature. Capitalism, Smith writes, arises out the human “propensity to truck, barter and exchange.” Workers, no less than employers and investors, are motivated by greed and self-interest. These are universal tendencies. Karl Marx famously disputed this, insisting that greed and self-interest were the products of societies that had private property. Marx held that in a communist society there would be no private property and therefore neither greed nor self-interest. In such a society, Marx rhapsodized, people would be motivated to work not for their own good but for the public good. Marx probably recognized how foolish this sounded, so he offered a vision in which the work itself would be light and sporadic. In his imagined society, people could do physical labor in the morning, fish in the afternoon, and do criticism in the evening.
There is a place where Communism works beautifully—in the family. The family, after all, is based on the Communist principle, “From each according to his ability, to each according to his need.”
While self-interest may be the motive for capitalism, empathy is the operative virtue that is required for success under the capitalist system.
Except for the clergy and doctors, I don’t know of any field that draws out human empathy as much as entrepreneurship.
In his book The Passions and the Interests, Albert Hirschman shows how capitalism, far from being a system of theft and looting, arose historically as an alternative to theft and looting. In fact, capitalism was built on a human proclivity entirely different from the desire to rob and pillage.
they sought to curb or check the desire for conquest by opposing to it an equally powerful desire: the desire to accumulate. In their view, the “passion” for predatory conquest could be mitigated, and ultimately eliminated, by the “interest” in capitalist accumulation.
Similarly capitalism channels greed in such a way that it is placed at the service of the wants and needs of others. Under capitalism, helping others is the best way of helping yourself. Capitalism provides a virtue to prosperity.
Marx is largely discredited today, because Communism proved a failure, and Marx’s prophecies proved dead wrong. Still, Marx’s core argument about the injustice of capitalist distribution remains hugely influential, because it seems to reflect common sense.
Essentially, from Marx’s point of view, the capitalists are thieves, stealing from the worker the true value of what the worker has contributed. Marx is the original apostle of Obama’s doctrine of “fair share.”
the reason they have become the central political question of our time is that economic inequality in America seems so much greater.
Marx is wrong that a business venture is simply capital plus labor. He fails to count the added value of the entrepreneur. What the entrepreneur brings to the project is, first, the idea.
A second, equally valuable, contribution of the entrepreneur is the organization of the business.
A third entrepreneurial contribution is risk.
the morality of capitalism, just like the morality of democracy, is rooted in consent.
mutual consent is what gives capitalism and trade their legitimacy.
poor people in America have a standard of living that is higher than 75 percent of the world’s population.
Our poor people have automobiles, TV sets, microwave ovens, central heat, and cell phones. I know a fellow who has been trying for years without success to emigrate to America. When I asked him finally why he was so eager to move, he replied, “I really want to live in a country where the poor people are fat.”
A hundred years ago, the life expectancy of the average American was around forty-nine years.
there is a deeper factual point that often goes unrecognized in the anti-colonial literature. In that literature we read innumerable claims to the effect that “the Europeans stole rubber from Malaya, and cocoa from West Africa, and tea from India.” But as economic historian P. T. Bauer points out, before British rule, there were no rubber trees in Malaya, nor cocoa trees in West Africa, nor tea in India. The British brought the rubber tree to Malaya from South America. They brought tea to India from China.2 And they taught the Africans to grow cocoa. In these cases, far from “stealing” native resources, the British deserve credit for introducing profitable crops that benefited the native economies as well as British global trade.
Today’s progressivism is less indebted to Marx than it is to Lenin. Lenin “rescued” Marx by arguing that colonialism represented the final crisis of capitalism. In Lenin’s view, the Communist revolution had not occurred in Europe because European leaders found a temporary solution to their domestic problems. They ameliorated internal class conflict by conquering other countries and exploiting the workers there. Lenin called on people in the colonies to drive out the colonizers. This, he concluded, was good not only for the self-determination of the colonies but also to accelerate the crisis and collapse of European capitalism.