The Corporate Law Group

The Excesses of Capitalism

We know many friends and colleagues who are celebrating the election of Emmanuel Macron as French President. But we were disturbed when Macron said that it was time to cure the, “excesses of capitalism”. We know what supporters heard. Do something about income inequality. Tax rich folks more. Justice for the poor. We get it. We actually all want the same thing. We just disagree about which path gets us there quickest. And which path drives into a Venezuelan ditch.

We have to ask to what, “excesses of capitalism” Macron refers? iPhones? Flat screen TVs? Electric cars? Capitalism has brought humankind out of poverty and disease. Don’t fool yourself. Nothing else has done that. Nothing else has come close. The miracles underway in China and Vietnam are due to free market driven reforms, not central planning.

Nobel Lauriat Angus Deaton called this the “Great Escape” in his book. Deaton likens his book to the eponymous movie. Many prisoners escaped but some stayed back afraid or skeptical that the plan would work. He points out that the escaped prisoners did not disadvantage the remaining prisoners in any way. In fact, after some succeeded in escaping it inspired the remaining prisoners to maybe try the same thing.

It is the same for the economy. It is not a zero sum game. For Mark Zuckerberg to make a billion dollars it took nothing away from you. How have capitalist excesses manifested in the US? AirBnB. Tesla. Google. Disney. Which of these excesses would we be OK doing away with?

And are we looking for the glorious ‘socialist restraint’ of Venezuela? As Remy Rems proclaims in his Reason video, “We have no toilet paper, but… it’s OK because we have no food.”

So-called, “capitalist excesses,” are the engine of our prosperity. And you don’t get that without market participants being allowed to succeed and fail. So hurl the baby out with the bathwater if you want. For us, we’ll keep our capitalist excesses, food, toilet paper, iPhones, and all.