This opinion column in MarketWatch is by Jason O’Mahony described at the end of his opinion article as living in Dublin, Ireland, working in the construction industry. He’s a liberal, pro-EU activist and former candidate. He blogs at www.jasonomahony.ie about politics and things that make him laugh.
He makes several really interesting points that I think are useful reading for people in any point between the left and the right of the political spectrum. I have encapsulated his thoughts here.
Whatever your political beliefs, I highly recommend that you follow the link at the bottom and read his entire column which I found to be very thought-provoking.
Whatever your political beliefs, I highly recommend that you follow the link at the bottom and read his entire column which I found to be very thought-provoking.
1. At this stage of human development in the West we can eliminate poverty.
2. However, whereas we could fund a right to health care, we can’t fund the right to an iPad...
3. Capitalism, for all its flaws, has still proven to be the most effective way of encouraging innovation and wealth creation.
4. If we are to fund a society that prevents its people from falling into poverty, wealth production requires that the overwhelming majority of the adult populace contribute.
5. Capitalism will only survive with the consent of the great majority...Such a deal has to recognize, however, that while job creation, alongside stable families, is the greatest contributor to wealth creation and poverty reduction, it is at its most effective when linked to the pursuit of profit.
6. The creation of a permanent economic aristocracy of the megawealthy has the potential to be a threat to capitalism itself, in that by sucking the wealth away from the rest of society it calls into question the ability of capitalism to provide an acceptable living standard to the great majority, which could lead to dissatisfaction and eventual revolution. In short, capitalism needs millionaires to survive, to act as an incentive to others to innovate. But does it actually need billionaires?
7. This doesn't mean that we should follow the confiscation policies of the hard left. They advocate a short-term solution that, if followed, will actually strangle the wealth-creating capacity of the West. The problem with the hard left, especially in Europe, is that it believes that wealth is a naturally occurring phenomena, whereas capitalists believe, rightly, that wealth is created by the ingenuity of man, and requires that man be free to create and benefit from the fruits of his creation.
8. The key must be to balance the freedom to strive and create and benefit from that effort with a proportion of that wealth going back into society through redistribution. How does one do that without stifling effort through punitive taxation? Estate taxes have proven an effective means, not interfering with the wealth-creation effort during the life of the creator. This does have to be balanced with the maintaining of economically viable entities after their creator’s passing and the very human desire to pass on wealth to family.
9. Finally, a new economic model must recognize that globalization is a fact.
"Many on the political right will look aghast at such ideas as socialist or 'big government.' They should look to history. From the Industrial Revolution onward, it has been progressive politicians of the center and left who have adjusted capitalism to save it from revolution. Mill owners said an eight-hour day wasn't economically viable. Plutocrats said banning child workers or slavery would destroy the free-enterprise system, and that the welfare state would end capitalism.
But is it a coincidence that the period of intervention in the free-market system, not to control it but to regulate it, has been the period of its greatest triumph? During the U.S.’s golden age of the 1950s, oft harked back to by conservatives, the top marginal income tax rate was an eye-watering 91% under that well-known arch-pinko Dwight Eisenhower. From the creation of National Insurance in 1911 in the U.K. to FDR’s New Deal to Clement Attlee’s welfare state in 1945 to Johnson’s Medicare and Medicaid in 1965 to Obama’s saving of General Motors, the center-left across the West has taken just enough cream from the top to fund the social stability that is vital for the free-enterprise system to prosper in.
In short, is it the progressive and thoughtful centrists who will once again save capitalism?"
