Plenty of scorn is being heaped upon British actor and comedian Russell Brand and his new book, Revolution, a silly, anti-capitalism diatribe. Capitalism, he writes, “generates wealth for the wealthy and further impoverishes those with nothing. Asking it to behave differently is like asking a microwave to wash your car.” Tell that to the 1 billion humans, mostly Chinese and Indians, who’ve been lifted out of extreme poverty the past 20 years because their nations embraced more market-oriented economic policies. Funnyman Brand is a joke, even though he obviously believes he has many important and serious things to say.
But what about Hillary Clinton? She’s supposedly a serious person, and a brilliant one. Maybe America’s next president even. Yet at a political rally last week, she told the crowd not to “let anybody tell you that, you know, it’s corporation and businesses that create jobs. You know, that old theory, trickle-down economics. That has been tried. That has failed. It has failed rather spectacularly.” Instead, she continued, it’s raising the minimum wage that creates jobs.
Yet as I point out at my AEI blog, the U.S. economy created 50 million jobs from 1981 through 2007 even as the real value of the minimum wage fell by nearly a third. Then, of course, there’s the inconvenient fact that no mainstream economist, including Paul Krugman, would deny it’s investment and ideas that drive long-term economic and employment growth — not consumer spending through a higher minimum wage.
And standing next to Clinton at the rally was Senator Elizabeth Warren, who back in 2011 had this message for America’s free enterprise system:
There is nobody in this country who got rich on his own. Nobody! You built a factory out there? Good for you! But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You, uh, were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did.
Of course, the old Soviet Union had public goods like roads and police and an education system. (Weird that Warren failed to mention property rights.) What it didn’t have was an entrepreneurial private sector to create and use the new ideas and inventions necessary to increase productivity and living standards. It’s the free enterprise system, even imperfectly and incompletely applied, that accomplished the two greatest miracles of the past millennium. First, it drove the Industrial Revolution, which increased Western incomes fiftyfold in real terms; and, second, it lifted all those Chinese and Indians out of deep poverty.
Now maybe Hillary was just echoing Warren’s screed to raise her own populist credentials and help ward off a presidential primary challenge from the Massachusetts liberal. But what if she actually believes such nonsense? If so, maybe Russell Brand’s next writing project might be speeches for Team Hillary.