The Nobel Prize-winning economist charts two possible futures for American capitalism.
"What is the future of capitalism?—by which I mean the future of competitive capitalism—free enterprise capitalism. In a certain sense, every major society is capitalist. Russia has a great deal of capital, but it is under the control of governmental officials who are supposedly acting as agents of the State. That turns capitalism (state capitalism) into a wholly different system from a system under which capital is controlled by individuals in their private capacity as owners and operators of industry. What I want to take up here is the future of private enterprise—of competitive capitalism.
"The future of private enterprise capitalism is also the future of a free society. There is no possibility of having a politically free society unless the major part of its economic resources are operated under a capitalistic private enterprise system."
Here's a couple more excerpts:
- When you start on the road to do good with other people's money, it is easy at first. You've got a lot of people to pay taxes and a small number of people for whom you are trying to do good. But the later stages become harder and harder. As the number of people on the receiving end grows, you end up taxing 50 percent of the people to help 50 percent of the people—or really, 100 percent of the people to distribute benefits to 100 percent!
- Adam Smith, in 1776, wrote The Wealth of Nations. It was an attack on the government controls of his time—on mercantilism, on tariffs, on restrictions, on governmental monopoly. But those are exactly the results which the present-day reformers are seeking to achieve.
The two greatest enemies of free enterprise in the United States, in my opinion, have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country. They are enemies for opposite reasons.
Every one of my fellow intellectuals believes in freedom for himself. He wants free speech. He wants free research. I ask him, "Isn't it a terrible waste that a dozen people are studying the same problem? Oughtn't we to have a central planning committee to decide what research projects various individuals undertake?" He'll look at me as if I'm crazy, and he'll say, "What do you mean? Don't you understand about the value of academic freedom and freedom of research? " But when it comes to business he says, "Oh, that's wasteful competition. That's duplication over there! We must have a central planning board to make those things intelligent, sensible!"
So every intellectual is in favor of freedom for himself and against freedom for anybody else. The businessman and the business enterprises are very different. Every businessman and every business enterprise is in favor of freedom for everybody else, but when it comes to himself, that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that subsidy. Businessmen are in favor of freedom for everybody else but not themselves. There are many notable exceptions.
