The economist and professor Richard Ebeling shares in this video why capitalism properly understood, drives innovation, production, improvement in qualities and rises the standard of living. He clarifies the wrong assumptions about this condemned system, because in reality it produces wealth that we enjoy and take for granted, and it is crony capitalism that favors some at the expense of others.
Ebeling explains that capitalism refers to an economic system under which the means of production are privately owned by either individuals or corporate entities who in pursuit of their own interests, they freely compete and use profit to their benefit. In this system, government would act as a protector of people’s life, liberty and property.
It is capitalism that has given us the wealth, the prosperity, the opportunities, the liberty that each and everyone of us enjoy to various degrees”.
Ebeling discusses the Adam Smith’s concepts of division of labor, specialization and the Invisible Hand. Also, he presents the institutional framework of a free market; here the focal point is the entrepreneur, who anticipates the patterns of future consumer's demands and coordinates the scarce resources to the production process where his own profit is not guaranteed.
Each individual, to get what others have and they desire, must use what they possessed in ways that serve their fellow men”.
It is the traditions of crony capitalism, that has condemned the true capitalism. Crony capitalism is the use of political means to achieve economic ends through the use of government intervention, regulation or redistribution of income to acquire that which the individual is not able or willing to obtain through the free and voluntary exchange and transactions of the open, competitive and free marketplace.
Ebeling presents Mises’ Iron Triangle of crony political process, where bureaucrats, politicians and special interests groups obtains benefits at the expense of taxpayers. He mentions that to achieve the ideal of free market, we must choose liberty, freedom and voluntary consent in trades.
You can watch now: Samuel Gregg: What Is Crony Capitalism?
Economist, professor and author
Nuestra misión es la enseñanza y difusión de los principios éticos, jurídicos y económicos de una sociedad de personas libres y responsables.
Universidad Francisco Marroquín