The-Morality-of-Capitalism-PDF

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These young people are returning because of new opportunitiesmade possible by expansion of economic freedom in theirhomeland. They are examples of “can-do” knowledge-basedentrepreneurs who are creating wealth and human bettermentnot only for their native country, but also for the United Statesand all other countries around the world. These people’s storiesdemonstrate how bad government policies can be changed tocreate new economic opportunities that can dramatically reversea country’s brain drain.We Have Nothing to FearAn essential part of the process of change, growth, and economicbetterment is to allow yesterday’s jobs to follow the pathof yesterday’s technology. Preventing domestic companies fromoutsourcing will not stop their foreign competitors from doing so.Through outsourcing, foreign competitors will be able to lowertheir costs, use the savings to lower prices and upgrade technology,and thus gain a big advantage in the market.One of the best-known examples of outsourcing was the NewEngland textile industry’s move to the South after World War IIin response to lower wages in the Southern states. (As was to beexpected, this raised wages in the South, and the industry eventuallyhad to move on to lower-cost sources in Asia.)But the jobs did not vanish in New England. The textile businesswas replaced by high-tech industries: electronic informationand biotechnology. This resulted in huge net gains to NewEngland even though it lost what had once been an importantindustry. In 1965 Warren Buffett gained control of Berkshire-Hathaway, one of those fading textile makers in Massachusetts.He used the company’s large but declining cash flow as a launchpad for reinvesting the money in a host of undervalued businessventures. They became famously successful, and 40 years laterBuffett’s company has a market capitalization of $113 billion.The same transition is occurring today with K-Mart and SearsRoebuck. Nothing is forever: as old businesses decline, theirresources are diverted to new ones.The National Bureau of Economic Research has just reported111
a new study of domestic and foreign investment by U.S. multinationalcorporations. The study demonstrated that for every dollarinvested in a foreign country, they invest three and a half dollarsin the United States. This proves that there is a complementaryrelationship between foreign and domestic investment: when oneincreases, the other increases as well. McKinsey and Companyestimates that for every dollar U.S. companies outsource to India,$1.14 accrues to the benefit of the United States. About half ofthis benefit is returned to investors and customers and most ofthe remainder is spent on new jobs that have been created. Bycontrast, in Germany every Euro invested abroad only generatesan 80 percent benefit to the domestic economy, mainly becausethe reemployment rate of displaced German workers is so muchlower due to the vast number of government regulations.I believe that as long as the United States remains number oneon the world innovation index, we have nothing to fear from outsourcingand much to fear if our politicians succeed in opposingit. According to the Institute for International Economics, morethan one hundred and fifteen thousand higher-paying computersoftware jobs were created in 1999–2003, while seventy thousandjobs were eliminated due to outsourcing. Similarly in the servicesector twelve million new jobs were being created while ten millionold jobs were being replaced. This phenomenon of rapidtechnological change and the replacement of old jobs with newones is what economic development is all about.By outsourcing to foreign countries, American businessessave money that enables them to invest in new technologies andnew jobs in order to remain competitive in the world market.Unfortunately, we cannot enjoy the benefits without incurringthe pain of transition. Change is certainly painful. It is painful forthose who lose their jobs and must seek new careers. It is painfulfor those who risk investment in new technologies and lose. Butthe benefits captured by winners generate great new wealth forthe economy as a whole. These benefits, in turn, are consolidatedacross the market through the discovery process and competitivelearning experience.Globalization is not new. It is a modern word describingan ancient human movement, a word for mankind’s search for112
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The Morality of CapitalismWhat Your
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ContentsIntroduction: The Morality
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Introduction: The Morality of Capit
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China, Morocco, the United States,
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in a friendly sense.” 9 The word
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Marx saw the “bourgeoisie” as i
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usinesses rising and falling more r
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and one an economist, and an interv
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Section IThe Virtues ofEntrepreneur
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is why I was mentioning the sophomo
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our society are motivated by purpos
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promote microfinance in poor countr
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ownership of wealth, was highly str
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in the world for a couple of hundre
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without a strong business sector th
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lightning rod and Watt’s steam en
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Competition and CooperationBy David
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advocates of “back to nature”
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that the associations within civil
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For-Profit Medicine and the Compass
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Profit and CompassionThat’s too s
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The Paradox of MoralityBy Mao Yushi
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after assessing the situation, sett
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efrigerators and color TVs, are onl
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epair trade are crowded out by the
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person, followed the principle of e
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if in return for A taking the bigge
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The Moral Logic of Equality and Ine
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equality in exchange is economicall
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eliminate or to establish inequalit
Page 66 and 67: earned by the poorest 10% of the po
Page 68 and 69: Adam Smith and the Myth of GreedBy
Page 70 and 71: them to lobby the state to create c
Page 72 and 73: strangers, but when we haggle for t
Page 74 and 75: Ayn Rand and Capitalism: The Moral
Page 76 and 77: the welfare state, which redistribu
Page 78 and 79: Welfarism: The Unchosen ObligationT
Page 80 and 81: Egalitarianism: “Fair” Distribu
Page 82 and 83: A worker is hired because of the an
Page 84 and 85: To live by reason we must accept in
Page 86 and 87: Economic outcomes in the market—t
Page 88: is a social asset is incompatible w
Page 92 and 93: The Market Economy and the Distribu
Page 94 and 95: no unfavorable, economic results. O
Page 96 and 97: owner, actual or potential, reflect
Page 98 and 99: losses prompted by the chance of, o
Page 100 and 101: We are not saying, of course, that
Page 102 and 103: well-being reflects a potentially c
Page 104: discrepancies. The difference was c
Page 108 and 109: Global Capitalism and JusticeBy Jun
Page 110 and 111: preferences, and infrastructure. It
Page 112 and 113: Human Betterment through Globalizat
Page 114 and 115: any particular sophistication. Afte
Page 118 and 119: etterment through exchange and the
Page 120 and 121: of diverse cultures. In this manner
Page 122 and 123: primitive magical-religious communi
Page 124 and 125: to censure, repression, and margina
Page 126 and 127: That is why the best defense of our
Page 128 and 129: A Little Further Reading for Fun an
Page 130 and 131: Dr. Tom G. Palmer is executive vice
Page 132 and 133: 14 Karl Marx and Friedrich Engels,
Page 134 and 135: Index of Proper Names(Chinese names
Page 139 and 140: The Pierre F. and Enid Goodrich Fou
Page 141 and 142: Students For LibertyA Free Academy,
Page 143 and 144: Additional Resources for LibertyThe
Page 145: “We need to change the narrative
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