What if you could be the wealthiest person in the world 100 years ago? Say John D. Rockefeller or Andrew Carnegie.
I don’t know about you, but my answer would still be NO!
Today, middle class Americans are way better off than the wealthiest a century ago. A hundred years ago, you couldn’t live in a climate-controlled house, drive a modern car, travel by airplane, watch a flat screen TV or carry a smartphone in your pocket.
Nor would you have access to quality healthcare. A hundred years ago, there were no antibiotics, no heart stents, no chemotherapy and no Advil (to say nothing of Xanax, Prozac and Vicodin).
The most commonly used single measure of our national wealth is Gross Domestic Product (GDP). However, despite the impact on your life of the items listed above, they are not included in GDP. Robert Kennedy asserted that GDP “does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures everything, in short, except that which makes life worthwhile…”
We should distinguish between our wealth and our social welfare. The quality of our lives is certainly affected by our net worth (our wealth). However, it can be said that the social welfare of our society has a greater effect on our lives than our net worth. Hence, advances in medicine, transportation, telecommunications and household infrastructure have a greater effect on our well-being.
And, those advances are the product of the free enterprise system.
Of late, capitalism is under attack. That outcomes are uneven troubles many here in the U.S. and the world over. People are marching in the streets… Wall Street’s excesses are scrutinized… Higher minimum wages are demanded…
Our anxieties are heightened by a political season in which it is de rigueur to instill fear in the public. That’s how you get elected.
But, I am more aligned with the so-called Oracle of Omaha, Warren Buffet. While acknowledging that income inequality is deep-rooted and needs to be addressed, he is eternally optimistic about our economic prospects. “For 240 years, it’s been a terrible mistake to bet against America, and now is no time to start,” he avers.
The roots of our income inequality are rooted in globalization and rapid technology change. Individuals who are well educated and innovative are more likely to earn the rewards of the 21st Century, he tells us.
Our response to our current challenges should not be to pull up the bridge over the moat – to close our borders and raise tariffs, for example. Rather, we should focus on providing equal opportunity, improving education (particularly in poor neighborhoods) and strengthening our social safety net.
And, the only economic system that can generate the wealth do so is capitalism.
WHO WILL LEAD?