During the Cold War, people came to equate the three ideas
of democracy, capitalism and free enterprise.
This made sense at some level,
since the whole world seemed inescapably divided into authoritarian,
totalitarian, socialist and communist nations on the one hand and democratic,
capitalistic and free enterprise nations on the other.
In the decades since the Berlin Wall fell, as CNN's Fareed
Zakaria has pointed out, there has been a growing divide between the nations emphasizing
democracy and those focused on capitalism.
The differences between these two
groups are both interesting and significant to world events.
But an even more nuanced and impactful division is the
difference between capitalism and free enterprise.
I wrote about this in my
book FreedomShift, but it is a point
of great magnitude in our current society and bears repeating.
Unfortunately, very few people have considered the
differences.
Most still equate capitalism and free enterprise, even in the
post-Cold War era.
This is a weighty mistake with a high potential for negative
ramifications in the 21st Century.
A simple defining of terms points out the crucial importance
of the distinction between these two brands of economics.
To summarize:
capitalism gives special government-supported benefits to capital and those
with capital (wealthy individuals, families and business entities).
This is the
opposite of socialism, which promotes special government-supported benefits to
those without capital--the proletariat, as Karl Marx put it.
In contrast to both capitalism and socialism, free
enterprise establishes good laws and government policies that treat the rich,
middle and poor the same.
Some people may believe that this is the system we live
under in the United States today--that the law treats all the same.
Such an
assumption is incorrect.
The U.S. commercial code has numerous laws which are
written specifically to treat people differently based on their wealth.
For
example, it is illegal for those with less than a certain amount of wealth to
be offered many of the best investment opportunities.
Only those with a high
net worth (the levels and amounts are set by law) are able to invest in such
offerings.
This naturally benefits the wealthy to the detriment of wage
earners.
This system is called capitalism, and it is a bad
system--better than socialism or communism, to be sure, but not nearly as good
as free enterprise.
Social Leader Daily by Oliver DeMille
