Capitalism vs. socialism is not a slogan fight in this episode. It is a record, and Lawrence W. Reed reads it out loud. This is the second of four conversations building economics from the ground up with Jenny Beth Martin, and it is the one about systems: what it actually means for an economy to be organized from the top down or left alone, and what happened every time a country tried each one. Reed starts with a definition he says people miss. Capitalism is what happens when you leave peaceful people alone. It is not a design, it is the absence of one. Then he goes to the evidence. West Germany in 1945, flattened and occupied, and the night Ludwig Erhard went on the radio and ended price controls and rationing before breakfast. Hong Kong, which he calls a rock with 750,000 people on it, and John James Cowperthwaite's decision to give it the freest economy in the world instead of a plan. Against those, the Pilgrims at Plymouth Colony, about 150 utopian communes in nineteenth century America that all collapsed, the Soviet Union, Cuba, and Venezuela. Then the argument being made from pulpits and campaign stages right now: that Jesus taught something close to socialism. Reed wrote the book on it, and he answers parable by parable. Lawrence W. Reed is president emeritus of the Foundation for Economic Education, author of Was Jesus a Socialist?, and has traveled to ninety six countries. More at jennybethshow.com and teapartypatriots.org.
Lawrence W. Reed is president emeritus of the Foundation for Economic Education, where he served as president from 2008 to 2019. He has led three think tanks over his career, taught economics at the university level, and written nine books, among them Was Jesus a Socialist? He has traveled to ninety six countries.
Jenny Beth Martin is co-founder and honorary chairman of Tea Party Patriots Action and the host of The Jenny Beth Show.
Key topics in this episode:
What a system of economic organization actually is, and why the choice is between top down mandates and spontaneous order
Karl Marx coined the word capitalism and became one of its fiercest critics
The hockey stick: living standards barely moved for centuries, then productivity per worker exploded after about 1750
Post-war West Germany, Ludwig Erhard, and the broadcast that ended price controls and rationing overnight
East Germany next door as the control group in a real world laboratory
Hong Kong under John James Cowperthwaite: no tariffs, no minimum wage, and the freest economy in the world
Why there is no example running the other direction, where private enterprise ruined a country and socialism rescued it
The three forms of socialism: redistribution of income, central planning, and government ownership of the means of production
Why America is best described as a mixed economy rather than a capitalist one
The Pilgrims at Plymouth Colony, the common storehouse, and why Governor Bradford abandoned it
About 150 utopian socialist communes in nineteenth century America, every one of them failed, none lasting five years
The Soviet Union, Cuba, and Venezuela, and Reed's account of roughly ten million people leaving a country that was once among the richest in Latin America
China after Mao: forty years of stagnation, then Deng Xiaoping and the capitalism carrying the socialist side of the ledger
Was Jesus a Socialist? The redistribution request in Luke twelve and the answer, who made me a judge or divider over you
The parable of the talents, the good Samaritan, the workers in the vineyard, and the money changers driven from the temple rather than the marketplace
The eighth and tenth commandments, and Reed on the period after the word steal
Romans 13 in context, and why unqualified obedience to any government authority is not a Christian teaching
The seven principles of sound policy, from free people are not equal to character makes all the difference in the world
Timestamps:
00:00 — Cold open: part two of a four part economics series 00:33 — What a system of economic organization means 03:26 — Capitalism is what happens when you leave peaceful people alone 04:12 — The hockey stick: what changed around 1750 10:40 — West Germany, Ludwig Erhard, and the end of price controls 11:43 — Hong Kong: a rock with 750,000 people on it 13:50 — What socialism actually is, in three forms 16:07 — Is America capitalist? The mixed economy answer 19:46 — The Pilgrims, the common storehouse, and human nature 21:34 — The Soviet Union and why it collapsed 22:29 — Cuba, Venezuela, and the people who left 25:31 — China after Mao: forty years of going no place 27:30 — Was Jesus a Socialist? The book and the question 30:31 — The parable of the talents 32:13 — The good Samaritan and the government program 33:26 — The money changers: God's house, not the marketplace 34:23 — The workers in the vineyard and the right of contract 38:24 — Thou shalt not steal, period 40:55 — The early church in Acts was voluntary, not commanded 44:34 — Feeding the five thousand without taking from anybody 46:26 — The love of money, not money itself 47:41 — Render unto Caesar, and what actually belongs to government 50:47 — The camel, the needle, and the rich young ruler 52:57 — Romans 13 in context: obedience has limits 57:35 — The seven principles of sound policy 58:32 — Free people are not equal, and equal people are not free 1:02:10 — What's yours you tend to take care of 1:03:06 — Nobody spends someone else's money carefully 1:04:15 — All people, long run: the hangover principle 1:05:24 — Encourage something and you get more of it 1:06:11 — Government has nothing to give that it did not first take 1:07:07 — Character makes all the difference in the world
Links: jennybethshow.com | teapartypatriots.org | fee.org