>Hey, Socialists! In Your Ear! (SmartMoney.com)
>Enough business bashing. I'm a capitalist pig -- and proud of it.
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SmartMoney.com Hey, Socialists! In Your Ear! Monday November 18, 2:20 pm ET By Jonathan Hoenig
This article was originally published on SmartMoney Select on 11/11/02.
THE CIRCUS CAME to Chicago last week - not Ringling Brothers, but a colorful band of anticapitalist protesters armed with megaphones, placards and enough eco-unfriendly pamphlets to papier-mache the Sears Tower.
Protesting capitalism, mostly outside meetings by corporate leaders or the WTO, is ultra-chic among the alternative crowd these days. Last week, their target was the Trans-Atlantic Business Dialogue, an annual meeting of corporate and government officials from the U.S. and Europe working to ease trade restrictions. The event just happened to be held in my hometown.
Although I enthusiastically support the right of peaceful assembly, I'm of the mind that capitalism shouldn't be protested, but rather celebrated. While "greedy executives" always make an easy target for disaffected youth, the reality is that nothing better exemplifies our national spirit than American business - the thousands of corporations big and small that benefit us all.
First off, let's not forget just how "big business" gets so big. As Ayn Rand writes in her book "Capitalism: The Unknown Ideal," "The sole means by which a government can grow big is physical force; the sole means by which a business can grow big, in a free economy, is productive achievement."
Magnificent companies like McDonald's (NYSE:MCD - News) or Microsoft (NASDAQ:MSFT - News) don't pop out of thin air. They aren't the result of a governmental bureaucracy like Amtrak or of natural phenomena like the Northern Lights. They've been built by spirited entrepreneurs and the hard - but voluntary - work of millions of individuals, all of whom have been paid for their services. Indeed, it's easy to forget that the oft-cited "working man" the protesters believe has been so wronged by capitalism isn't enslaved - he's employed. One of the many positives that business, big and small, has the capacity to produce is jobs. Millions and millions of them.
The spirit of capitalism is to vote with one's pocketbook. It's ironic, then, how so many young, "oppressed" people decry capitalism while simultaneously embracing its benefits, buying everything from CDs to cell phones with ravenous hunger. (Epic Records greatly appreciates their purchases of Rage Against the Machine albums.) These people may believe that greedy CEOs are the only people to benefit from capitalism, but the truth is that free-market competition always helps consumers first and capitalists second. There isn't a good or service that hasn't been improved or made cheaper by big business and free enterprise.
One of the best examples is the energy industry, where "big oil" is a perennial scapegoat for everything from pollution to price gouging. Yet the statistics present quite a different picture. In 1913, gasoline cost 27 cents a gallon, and a 12-gallon fill-up cost 30% of the average American's weekly earnings, according to an article in the Pittsburgh Post-Gazette. Even if the price had merely kept pace with inflation, the same gallon of gas would cost around $21 today. Of course, gas is much cheaper than that - and today's formulas are the cleanest and most fuel efficient in history.
And while it's now common knowledge that the airline business has been unprofitable for years, that hasn't stopped millions of Americans from taking advantage of the cheapest airfares ever. The same goes for information technology, where a top-of-the-line notebook computer costs less than my Mac Plus did a dozen or so years ago.
In the wake of the midterm elections, let's not forget that while political power is achieved by appeasing special interests, economic power is gotten only through peaceful, mutually beneficial exchange. After Enron and WorldCom, it became easy to slander capitalism as the problem with society. I don't think business is what's wrong with America, but what's right with it.
Jonathan Hoenig is portfolio manager at Capitalistpig Asset Management, a Chicago-based hedge fund.