Consider the following example of how capitalism is supposed to work from Rabbi Daniel Lapin’s book, Thou Shalt Prosper:
James Jerome Hill was born in log cabin in Ontario, Canada in 1838. His father died while the boy was young, and he supported his mother by working in a grocery for $4 a month. Through great energy and hard work, Hill came to build a railroad across the Northwest. His concept was to build the line slowly and first develop the economy of the area before continuing on further. To attract European immigrants, Hill offered to bring them to the Northwest for a mere $10 each if they would farm near his railroad. He organized farming instruction classes that taught the newly arrived farmers all about local conditions and such techniques as diversifying crops. He imported 7,000 head of cattle from England and handed them over free of charge to settlers near his rail line.
Hill told the immigrants who worked near his railroad that he and they were all in the same boat together. He explained to them that they would all prosper together or all be poor together. To make sure that they prospered, he also set up experimental farms to test new seed, livestock and equipment. He sponsored contests and awarded rich prizes to those farmers who most successfully produced meat and wheat in bounty.
Was he doing this out of selfless altruism? No…he did these things to build up the future customers who would ship goods on his railroad. By helping them prosper he prospered as well. But for sure…those pioneers who received $10 passage from overcrowded tenements to a land of opportunity, and farmers who received gifts of 7,000 English cows and bulls and all the others who build new lives along Hill’s railroad felt only gratitude toward this man. Though not without faults, Hill was a generous, Christian man who genuinely governed the principles of capitalism and helped to elevate many around him to prosperity.
So in addition to this example, what has capitalism really done you might ask? For one thing life expectancy in the past 150 years has more than doubled, from fewer than 30 years in 1870 to 72 years in 2015. Meanwhile billions of people have risen out of poverty…150 years ago more than 75% of the world’s population lived in extreme poverty, consuming less than $1 a day, in 1985 money. This year the World Bank expects extreme poverty to fall below 10% for the first time in history.
Economist Milton Freidman says it this way, “The only cases where the masses have escaped poverty is where they have embraced capitalism and largely free trade. Where are the masses the worst off? Where capitalism is not practiced! The record of history is crystal clear. There is no alternative way to lift people out of poverty. It is the productive activities that are released by a capitalistic, free enterprise system.”