Capitalism, Not Socialism, Creates Prosperity

Capitalism, Not Socialism, Creates Prosperity

Dear D: We always have to be careful to distinguish “A preceded B” from “A caused B.” At least sometimes, B occurred despite A, even though A came first. The best way to make this distinction is to resort to good (e.g., Austrian) economic theory. We learn from that, at least I do, that prosperity stems from free enterprise, not government intervention. We are richer now than we were in not only the 1950s, but also the 1850s and the 1750s, despite the fact that we have more statist interferences with free enterprise nowadays. So, I totally and vociferously reject the Coontz viewpoint.

From: D
Sent: Thursday, March 15, 2018 11:37 PM
To: wblock@loyno.edu
Subject: Economic myths of the 1950s

Hello Professor Block, I enjoyed watching your explanation of why the New Deal did not end the great depression and I had another question for you, regarding common economic myths.

People on the left, and social-conservative right, argue that the 1950s were a great time, but for different reasons. The right argues that the 1950s were a great time because of high moral discipline while the left likes to argue that the 1950s were a great time because of a high tax rate, relative to today, or because of involvement from the federal government.

What is your opinion on the latter argument?
Are 50s economic prosperity a product of a high tax rate or social programs?

I was reading “What We Really Miss About the 1950s” by Stephanie Coontz, a Trotskyist, and the issue of taxes and government intervention came up.

She makes this following statement: “For one thing, it’s easy to see why people might look back fondly to a decade when real wages grew more in any single year than in the entire ten years of the 1980s combined, a time when the average 30-year-old man could buy a median-priced home on only 15-18 percent of his salary.”

While clearly attacking Reagan’s economic policies, Coontz introduces her leftist position.

Coontz is not an economist, but she does make several arguments that are economic in nature; she argues, in her essay, that increased government action is the source of prosperity for ordinary people- I don’t include those arguments here because they are very long.

However, is it true that social programs improved the lives of ordinary people?

Thank you for your time and your commitment towards liberty, D.

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2:21 pm on March 30, 2018