There are only a few basic ways in which society can be organized:
- Autocracy (dictatorships and absolute monarchies included)
- Open society (free markets, capitalism, or Classical liberal societies, depending on what one calls them)
But because there are some doubters who still wonder aloud how capitalism and free markets are good for society, here are five major ways in which an open society trumps the others:
|Why Open Societies and Free Markets Are Best||Further justification|
|Open societies are best for protecting the environment||
While this argument is sure to generate howls of protest from activist groups, the evidence is clear:
|Education is delivered best and most widely by open societies||
In an open society that operates on market principles, employers want educated, skilled workers. It's an extension of Solow's growth model
, which says that the main causes of growth are labor productivity, capital investment, and technological advancements. Employers, wanting to stay at least even with growth in the economy as a whole (and usually trying to do even better than that), have a strong incentive to find ways to get better-educated workers.
Other systems are either neutral or expressly hostile to the education of their populations. It goes nearly without saying that autocracies and theocracies can't remain in control of educated societies, and anarchy does nothing for education. Socialist systems, while often held aloft as examples of achievement in some educational categories, fail to deliver the goods in the long run. The reason education is in such great demand in open societies is that it helps the individual to compete in the labor market. As more individuals attain one level of education (a high school diploma, for instance), the market shows greater demand for the next-higher level of education (say, an associate's or bachelor's degree). Socialist systems stifle the internal labor market competition for education -- even going so far as to "track" some students early in their educational careers, prohibiting them from achieving higher levels of education.
|Open societies deliver labor-saving devices and safety practices better than any other system||
Similar to the case of environmental protections, open societies contain both the framework for providing safety measures and the incentives to do so. In this example, we see the difference between free markets and anarchical markets -- while some "capitalists" would argue that there should be absolutely no regulations on health and safety practices, they are of the anarcho-capitalist breed. They are of a different stock than most "capitalist" types, who recognize that some regulations are necessary, but simultaneously believe that those regulations are best kept to a minimum.
Again, however, free markets are the ones that can deliver the goods -- whether we consider toxic gas detection equipment that protects workers from dangerous conditions or basic labor-saving devices like microwave ovens and dishwashers that spare hundreds of millions of man-hours in wasted work every year. Command economies, theocracies, and autocracies just don't do the same job. The millions upon millions of man-hours that are saved due to cheap clothes washers and dryers contribute an incredible amount to letting the people of free societies choose what to do with their leisure time is just a solitary example of how those open societies outperform other systems in delivering social benefits.
|Free markets tend to keep nations out of war||Call it the Big Mac thesis, if you will, but it's generally true that markets and trade create a strong disincentive for two nations to engage in war. It's no absolute guarantee by any measure, but market societies have large built-in constituencies that are opposed to war on the grounds that the resources expended on warfare could be better used elsewhere in society. By contrast, nations that lack the comforts of prosperity often substitute comfort for a nationalistic pride in militarism.|
|Open societies allow the occasional genius to flourish||
This is perhaps the most important social benefit of all. True genius may be the sort of thing that happens entirely at random -- happening with the same frequency under any social structure. But open societies are the very best ones for allowing genius to flourish. Imagine a Benjamin Franklin forced to grow up in Soviet (or Tsarist) Russia, or a Thomas Edison raised in a Saudi madrass, or an Albert Einstein who never escaped Nazi Germany.
Then ask yourself: What would society have lost?
The mistake so widely made when people criticize "capitalism" is that they identify certain indiscretions and consider them indictments of the system as a whole. Unfortunately, that's like blaming exterminators and entomologists for the very existence of bugs. That some abuses occur under free-market systems is acknowledged; but abuses occur as well under every other system. That some people use market systems to enrich themselves at the expense of others is undeniable; but it's also true that under other systems, those abuses are often undertaken with the express consent of the state.
In the end, the real measure of the goodness of an open society is that it delivers the goods to more people more effectively than any other system, while being built around a structure that enhances the identification and remediation of abuses. No other system has ever come close.