‘Real World’ Markets and the Benefits of Capitalism

Y’know, sometimes it amazes me how otherwise-intelligent people can fail to see or understand some things that seem so obvious to me. The benefits of free-market capitalism is one of those things. Despite the evidence from the past couple hundred years, some people — even among our leaders in Washington, D.C., apparently — still seem to think that capitalism is bad and a government-controlled or “planned” economy (e.g., in a socialist or communist state) is good — both morally and practically superior.

Hear that sound? That’s the rocks rattling in my head as I shake it in disbelief. I’m not an expert on economic matters by any means, but even I can understand the basics and see the real-world proof of what works best for a society/nation and what doesn’t.

In How Capitalism Will Save Us, Steve Forbes and Elizabeth Ames relate how John Mackey, founder of Whole Foods markets (no pun intended), had a paradigm shift regarding business & profits:

Whole Foods circle logo“[Mackey] once thought that ‘business and capitalism were based on exploitation: exploitation of consumers, society and the environment.’ At one time an ardent believer in capitalism’s bad rap, Mackey admits, ‘I believed that “profit” was a necessary evil at best, and certainly not a desirable goal for society as a whole.’ However, when he founded Whole Foods, his view of the world began to evolve.

‘Becoming an entrepreneur completely changed my life. Everything I believed about business was proven to be wrong. The most important thing I learned about business in my first year is that business wasn’t based on exploitation or coercion at all. Instead I realized that business is based on voluntary cooperation. No one is forced to trade with a business; customers have competitive alternatives for their labor; investors have different alternatives and places to invest their capital. Investors, labor, management, suppliers — they all need to cooperate to create value for their customers. If they do, then any realized profit can be divided amongst the creators of the value through competitive market dynamics. In other words, business is not a zero sum game with a winner or loser. It is a win, win, win game — and I really like that.’

Mackey’s transformation was helped along by exposure to free-market thinkers: ‘I stumbled into reading Milton Friedman, Friedrich Hayek, Ludwig von Mises, Ayn Rand — I read all of them. I said to myself, “Wow, this all makes sense. This is how the world really works. This is incredible.”‘

All of this caused him to conclude: ‘Business, working through free markets, is possibly the greatest force for good on the planet today. When executed well, business increases prosperity, ends poverty, improves the quality of life, and promotes the health and longevity of the world population at an unprecedented rate…. How many people in our greater society comprehend [this]?’

… [F]ree-market principles are, for better or worse, the best description of how people go about their business each day and how markets actually function in the Real World.”

Mackey gets it. As a new business-owner, he ran up against reality and it taught him a few things. He became aware of the truth of how the business world works when not over-regulated or interfered with. It’s heartening to know that some people can see the light and change their ways. And Mackey seems to have taken those lessons to heart and put them into practice, ‘cuz Whole Foods is doing pretty well, these days.

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