Judd W. Patton, Ph.D. (Biography) Bellevue University Online
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Three Cheers for Capitalist-Entrepreneurs!

By
Dr. Judd W. Patton
Professor of Economics, Bellevue University

Years ago the 1974 Nobel laureate in Economics, Friedrich Hayek, observed, “Sometimes I think the most difficult task of all is to convince the capitalists themselves of the merit in what they do.” Why is this? Here’s my take.

Business people today are so inundated by an anti-business mentality in society that they have come to believe it themselves! Capitalists are regularly portrayed as the bad guys on TV and in other media - with the possible exception of conservative talk radio. In order to succeed, the Hollywood stereotypical capitalist must lie, cheat, blackmail and even murder. Omaha native Malcolm X evidently concurred with this sentiment: “You show me a capitalist, I’ll show you a bloodsucker.”

Then there are the liberal intellectual teachers in some of our leading universities and colleges proclaiming to young impressionable minds that profit-seeking business and capitalistic, market institutions are the problem rather than the solution. Many of our young people receive this very antagonistic, and in my view, incorrect, view of business.

The field of Economics itself is in part responsible for spreading this misconception. Many of you business people and entrepreneurs have probably taken college courses in macro and/or microeconomics. Permit me to humbly suggest that you learned quite a few economic myths, such as the following:
In micro class you learned that firms operating in the ideal market model, Perfect Competition, earn no profit. In the real world, competitors earn profits with higher prices and less output than this “perfect model.” Therefore, the implication is that regulation is needed and that profit causes higher prices and is thereby bad for consumers
.

What nonsense! Profit is determined by entrepreneurial insight and alertness and is earned by serving consumers well. Profit is good and essential to any well-functioning economy. Losses are bad. How many jobs are created by firms with losses?

Here’s another myth, but from macroeconomics class: Your professor taught that government, through fiscal and monetary policy, is necessary to manage and stabilize the economy. Government can supposedly conduct counter-cyclical policies to stimulate the economy, create jobs, and thereby help business in times of recession.

The implication? Who is responsible for recessions? Why you are, you evil-capitalistic, business people and entrepreneurs! You are responsible for being too pessimistic and so callous as to lay off workers who need the jobs to feed their hungry families.

The truth is just the opposite. Government cannot manage the economy! In fact, Mr. Greenspan and the Federal Reserve cause the ups and downs in business activity. By distorting interest rates through easy-money policies, the Fed misleads you capitalist-entrepreneurs. The end result is an inevitable cluster of business errors, losses and mal-investments. You need sound, honest, Constitutional money that is not “inflated” or debased.

Why didn’t you learn that truth? May I suggest that you did not have one of the relatively few economics professors, including yours truly, who teach free-market economics and inexorable economic principles. Your capitalistic self-esteem sank along with your economic knowledge!

In truth it is our entrepreneur-capitalists who are the prime movers of wealth creation. Business investment and innovation are keys to a healthy, growing economy, not some government demand-management policy.

So what can you conclude from this?

Get your capitalistic self-esteem back. Ignore the unfair, anti-capitalist portrayal of business people in the media and TV. It’s bologna!

Whatever you do, don’t use your advertising dollars to support programming that peddles anti-business themes. Don’t send you children, or your donations, to colleges that peddle anti-capitalistic, left-wing ideas and professors. Help fund speakers, seminars, and colleges that explain the case for business, business ethics, free enterprise, and free markets within the academic community.

Finally, and most importantly, don’t seek benefits from government yourself. Pull your hand out of the public trough. Seek profits honestly (Isaiah 48:17-18). Be a free-enterpriser. Shun subsidies, bailouts, tariff protections and other government special privileges. They must be seen for what they are: anti-capitalistic and welfare state programs. Oppose them. Support political candidates that believe in free markets and honest, Constitutional government.

Three cheers for Capitalism and the people that make it work! Help make the words of Dr. Hayek inapplicable for all American businessmen and businesswomen, “Sometimes I think the most difficult task is to convince the capitalists themselves of the merit in what they do.”

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