Thoughts on a free market economy…..

“Wealth Creation”

By Phyllis Hunsinger

October 1, 2013

The poor in the United States often own flat-screen TV’s, cell phones, automobiles, and other possessions deemed luxury items by the poor in other countries. Why is that? Why do the poor in the U.S. have a much higher standard of living than the poor in other countries?

Capitalism is the only system that can create wealth for the masses. This is true because capitalism is the only system based on private property rights, voluntary exchange, limited government, and rule of law.

Why do the poor benefit from capitalism and a free market economy? There is an incentive to make things the poor can afford in order to increase profit. There is also an incentive to hire more people, i.e. human capital, in order to increase profit. All producers have to seek out what other people want. Some are better at it than others. The basis for a free market economy is voluntary exchange, which means that businesses must provide goods and services that consumers want at an affordable price in order to stay in business. As a result businesses continue to be innovative in order to remain competitive.

Gary Wolfram wrote in “The Capitalist Manifesto,” “The reason people in sub-Saharan Africa and rural India live like refugees is not that they don’t work as hard as we do, or are not as smart as we are, but that they live in an economic system that doesn’t allow them to be productive.”

Mr. Wolfram concluded, “The market system delivers untold wealth to millions of persons. Societies that do not have market economies have been forced to concede that only free markets are capable of producing on a scale that affords even the poorest person a standard of living well above what would have been unthinkable just a few hundred years ago.”, Phyllis Hunsinger, © 2013, All Rights Reserved


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1 Comment on "Thoughts on a free market economy….."

  • Barbara Ann Smith says

    Phyllis, You are right on! Great Job!

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