Money & The EconomyOpinion

Does Capitalism eventually lead to Fascism? Not in America!

Does Capitalism eventually lead to Fascism? In the US it doesn’t and it won’t.

Many people in the world believe that Capitalism will eventually lead to Fascism. Some claim that nearly everyone, except Americans, understand this. The reality is that American Capitalism, when practiced correctly, leads to more individual freedom, more individual responsibility, low rates of taxation and a limited role for government. These principles are opposite to the principles of Fascism.

People in other countries simply do not understand the value that Americans place on freedom. In every other country, the population is willing to sacrifice some freedom for the appearance of more security or safety. As our own Benjamin Franklin said, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”

Admittedly today, there are Americans who appear willing to challenge Franklin’s words. There is a deep division in the US today, mostly centered around the role of government. Historically, Americans favored a very limited role for government. Today there is a movement toward a larger role for government.

That means some Americans want the government to control key markets like the market for healthcare. The US is the only developed country in the world that does not have some kind of national health insurance. Recent surveys rank the US 15th for the quality of the healthcare system.

Rational, freedom-oriented Americans would reject that claim. Most Americans would say that if they were seriously ill or suffering from a serious injury, they would rather be in the US, where the most advanced protocols and the most advanced equipment are readily and easily available. In virtually every other country, that is not the case.

The reality is that the US leads the way for advancements in healthcare. Because of our capitalist system and the resulting profit motive, the US has already developed three vaccines for the worldwide Covid pandemic with at least three more about to be approved. The US led the world in producing lifesaving equipment including ventilators.

Some argue that Capitalism produces billionaires who eventually have too much power because of their wealth. Some want to limit the number of billionaires. In the US, it is exactly the opposite. We would like to see as many billionaires as possible. Why? Because to become a billionaire a person has to make a huge contribution to the welfare of the citizens like Jeff Bezos, or Bill Gates or Elon Musk did.

Capitalism is about freedom and free markets. Capitalism is about competition. Freedom and competition always lead to higher quality products, lower costs of production, faster innovation and more profitable companies.

But the current objection to Capitalism revolves around the distribution of income.

In Capitalism an individual is paid according to the value of the contribution that the individual makes. Very simply, the more valuable the contribution, the more income the individual earns. Because there are vast differences in contributions, an unequal distribution of income results. Some in the US believe that this large income inequality is not fair. Indeed measured by what economists call the GINI coefficient, the US has a high degree of income inequality.

To a freedom-oriented American this is normal and is how it should be. It is social justice. As the recently deceased American economist Walter Williams said, “ But let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you — and why?”

In the US system, an individual is free to figure out how to increase the value of their contribution. Unfortunately, the current administration believes that large income inequality is bad and must be corrected by taking income away from those who have earned large amounts and giving the income to people, who for whatever reason, did not earn it. While compassionate Americans allow some of this, the basic concept is just un-American.

The citizens of every other country in the world, simply do not understand the great American experiment in Capitalism and a truly Representative Democracy, where the people make major decisions and not some ruling class. Historians thought the experiment would fail in 1861 when a Civil War ripped the US.

We lived through that war and eventually became stronger while gaining an even deeper understanding of freedom. American Capitalism won’t lead to Fascism. In fact, once the US gets back to the basic principles that made us great, freedom will flourish and the capitalistic system will become even stronger.

The four basic principles allowed the US to go from the birth of a nation to the largest economy and the most prosperous country in the world in about 150 years. Other countries were hundreds and even thousands of years older.

Individual freedom, individual responsibility, low rates of taxation and a limited role for government work with Capitalism and Democracy to encourage more prosperity, more freedom and more control by the people rather than some government official.

If only citizens of the other countries in the world understood that.

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Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years.

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