In a speech last week in St. Louis, Mitt Romney spoke about the “liberating power of the free enterprise system” and went on to say this:
That same system has helped lift more people out of poverty across the globe than any government program or competing economic system. The success of America’s free enterprise system has been a bright beacon of freedom for the world. It has signaled to oppressed people to rise up against their oppressors and given hope to the once hopeless. It is called the Free Enterprise System because we are both free to engage in enterprises, and through those enterprises we ensure our freedom.
For conservatives, this has been a terribly underutilized argument. When it comes to measuring an economic system based on its moral outcomes, there is simply no competitor when it comes to the free enterprise system. No economic system in history has come nearly as close as capitalism to raising the poor from the dust and elevating the dignity of the human person.
As Arthur Brooks and I explain in Wealth & Justice: The Morality of Democratic Capitalism, there is a certain irony in the fact that capitalism is best at doing what it is most often accused of doing worst: distributing wealth to people at every social stratum rather than simply to elites. The evidence of history is clear on this point – the poor gain the most from capitalism, in part because, in most other economic systems, the game is rigged for the well-to-do. “The capitalist engine is first and last an engine of mass production,” is how the economist Joseph Schumpeter put it, “which unavoidably means also production for the masses…. It is the cheap cloth, the cheap fabric, boots, motor cars and so on that are the typical achievements of capitalist production and not as a rule improvements that would mean much to the rich man.”
Beyond that, capitalism places intrinsic limits on the authority of the state. It requires private spheres of human action that are beyond the reach of government. As Michael Novak has said, in a free society the state should be subsidium. It loses legitimacy as it encroaches into areas where it does not belong.