Would a Government build this?

Capitalism – an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. (Oxford Dictionary)

Capitalism is an integral part of what our country is and who we are as Americans. It is why we (the US) lead the world in so many areas like medicine, technology, drug research, professional sports, and entertainment. Individuals and companies of all sizes are free to innovate and compete to bring life to their ideas.

Talent and ingenuity have always existed in abundance in American culture. They have been a big part of the independent and self-sufficient tradition of American life going all the way back to the pilgrims. Along the way, some of these great ideas and inventions grew to the point of becoming indispensable essentials, embedded in our daily lives. Some also became the necessary stepping-stones upon which more advanced ideas were able to be realized. The considerable investment and competitive spirit needed to refine and mature these ideas into affordable and usable products and services didn’t just materialize randomly. Capitalism was (and is) the engine that provided the means for this investment. The motivating force of profit keeps it going.

America’s history is full of smart and resourceful entrepreneurs. Their inventions and discoveries are singularly impressive feats of ingenuity. But without the enormous potential of private investment available to these geniuses, and the freedom to use it as they wished, many of their great ideas would have remained unrealized dreams. An idea can only go so far before some entity – a private investor, the government, or the inventor – must provide money and resources to continue the evolution of the product or service.

In a capitalist society, the private investor and/or inventor can earn unlimited profit from an invention and choose to re-invest some or all of that profit to perfect the product and market its use. In a socialist society, it is the government that chooses the innovative ideas and provides the monetary investment for further development. The principle argument of the socialist model is that no individual or corporation should benefit disproportionately, relative to the society as a whole, in bringing a new idea/invention to fruition. Any resulting profit should be fed back to the government to be utilized for the benefit of all.

However, what must be questioned is if the government, in its infinite wisdom, would make the same “calls” on investment priorities as individual inventors and corporations would. We don’t think so – not by a long shot. There is no mystery to how the federal government prioritizes its spending. Nearly 90% of all federal money today is “invested” in only 5 areas – Social Security, Medicare, Medicaid, Defense, and national debt interest (in that order). That priority list has been the same for both Republican and Democrat administrations over the last 30+ years. Every Democrat candidate for President, socialist or otherwise, has pledged to increase taxes on the “wealthy” and then spend that extra money to expand the first three programs in that list.

Look at the list below of American entrepreneurs paired with their pivotal ideas. These individuals personally made the decisions about the extent of investment in their projects and the manner in which any profit they earned would be used. They were absolutely free from the constraints, bureaucracy, and politics that attaches to government spending. Do you think if the federal government (instead of the entrepreneur) was prioritizing the funding for these ideas, they would have blossomed into the enterprises they are now? If not, would we be better off today?

This is only a short list of well-known examples:

• Thomas Edison – the light bulb, phonograph, and many other electric power innovations
• Henry Ford – the assembly line for car manufacturing
• George Eastman – photographic film in rolls; founder of the Eastman/Kodak company
• Walt Disney – Family entertainment
• Coco Channel – perfume
• Oprah Winfrey – Entertainment
• Bill Gates – (Microsoft) windows-based point & click personal computing
• Martha Stewart – Merchandising, publishing, broadcasting
• Steve Jobs – (Apple) iPhone, iPod, iPad, iMac, etc.
• Mark Zuckerberg – (Facebook) social media sharing
• Jeff Bezos – (Amazon) online shopping

It can be argued that some of these things would have been just as important to the government as they were to their inventors, and therefore would receive ample governmental support. Edison’s light bulb and electric power distribution concepts would clearly fall into that category. But what about the example of Walt Disney, and all the private investment that has been lavished upon the Disney juggernaut over the years? One can scarcely imagine any scenario where the federal government would devote anything even close to the gargantuan amount of money poured into the Disney universe since the 1920’s. A lowly cartoonist builds his vision of a Magic Kingdom accessible to all Americans and others. Would the federal government have picked this idea as being important to the people’s interests? Would they have thought it worth the risk of investing billions of tax dollars? We doubt it.

Would we really all be better off without what Disney has become? Even for those who have never been to any Disney park or seen any Disney movie, the technological and entertainment off-spring from the Disney investment now permeate and enrich many parts of all our daily lives. We simply take this for granted¹. Capitalism made Disney what it is today. It is a prime example of American grandeur that would never have been created in a socialist-style economy.

The fear of many socialists is that corporations or individuals horde so much profit in a capitalist framework that income inequality destructively increases. Societal behavior is thus influenced in a way counter to the desires of government leaders. Socialists loathe the thought that a relatively few wealthy capitalists could wield unstoppable control over all industry. To guard against this extreme scenario, “anti-trust” laws were put in place over 100 years ago in the U.S. that provide a check on any corporation or individual who tries to stifle the competition and gain sole control of an industry. These laws have allowed capitalism to thrive in the U.S. while at the same time preventing it from spinning out of control.

Currently, the only force powerful enough to stifle capitalism in this country is our own bloated federal government. Past administrations have attempted to reign in capitalism in favor of socialist style economics, but these efforts were themselves smothered by checks and balances built into our Constitution and by the will of American voters.

This election season we have not one, but a slate of candidates who want to curtail capitalism to some degree or eliminate it all together. This isn’t the first time such candidates have emerged, nor will it be the last. Once again, Bernie Sanders is the standard-bearer of the socialist philosophy. Sanders feeds off a segment of the population that dwells only on the negative aspects of capitalism (Sanders constantly uses the term “greedy”). The capitalist concept of a revolving system of economic “winners and losers” is revolting to Sanders and his ilk. Chiefly, they can’t live with the fact that there will be some losers. Their go-to solution is to penalize and handcuff the “winners” with an oppressive set of taxes. At the same time, Sanders inspires his supporters with a fantastical vision of how an idealized socialist society would work. Tax money would be re-distributed to the “losers” and/or used for investment only in innovative ideas deemed worthy by the government for everyone’s benefit. Within this system, no taxpayer money would be lost to waste, fraud and abuse. To complete the fantasy, all the existing affluent people and corporations in the country would happily comply and not even consider relocating their wealth and companies outside the U.S.

History is replete with catastrophic failed attempts to implement a utopian socialist society². The whole socialist concept runs completely counter to the inherent desire in many Americans to freely evolve and improve themselves. A government that reserves for itself most (or all) of the means to innovate, depresses the entrepreneurial spark as well as the spirit of independence in its citizens. While there appears to be a significant following behind Bernie Sanders and his socialist theme, we strongly believe there is a far larger silent majority that views socialism as anathema and will roundly reject it on election day.

¹Examples:

• “Switch-back” lines for crowd control – now used in many banks, airports, national parks, and other entertainment venues.
• Animation – Disney pioneered animation, creating the tools and techniques for this form of entertainment that now stretches far beyond just the Disney brand into education, news, business communication, among others.
• Shopping Malls – “Mainstreet USA” in Disneyland is generally recognized as the concept for the world’s first indoor shopping mall. While its value in Disneyland is mainly entertainment, the idea blossomed into the mainstream shopping malls we are familiar with today.

²The most spectacular failure of socialism in our lifetime was the Soviet Union. More recently, Cuba and Venezuela are living examples of populations being stagnated, oppressed and even starved by their socialist governments.