Free Enterprise vs Capitalism “Which one is Better?'”

Coming into a business and friendship with the WORLD’S TOP 25 LEADERSHIP EXPERTSWORLD’S TOP 30 LEADERSHIP PROFESSIONAL’S for  Orrin  Woodward, Chris Brady, Tim Marks and the Policy Counsel of Life , I truly believed that “capitalism” was the exact same as “free enterprise” and “man oh man” was I way wrong.  Oliver DeMille, the former president and founder of George Wythe College educates on the differences between the two.  George Wythe was the mentor of Thomas Jefferson and 30 other congressman, senators and presidents and Oliver would be the top authoritive historian on George,  Thomas Jefferson and Free Enterprise.  Here is some information on the differences that make all the difference. God  Bless Cody

“If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; and may posterity forget that ye were our countrymen.”
Samuel Adams

To summarize: capitalism gives special government-supported benefits to capital and those with capital (wealthy individuals, families and business entities).

This is the opposite of socialism, which promotes special government-supported benefits to those without capital—the proletariat, as Karl Marx put it.

In contrast to both capitalism and socialism, free enterprise establishes good laws and government policies that treat the rich, middle and poor the same.

Some people may believe that this is the system we live under in the United States today—that the law treats all the same.

Such an assumption is incorrect.

The U.S. commercial code has numerous laws which are written specifically to treat people differently based on their wealth.

For example, it is illegal for those with less than a certain amount of wealth to be offered many of the best investment opportunities.

Only those with a high net worth (the levels and amounts are set by law) are able to invest in such offerings.

This naturally benefits the wealthy to the detriment of wage earners.

This system is called capitalism, and it is a bad system—better than socialism or communism, to be sure, but not nearly as good as free enterprise.

In a free enterprise system, the law would allow all people to take part in any investments.

The law would be the same for all.

If this seems abstract, try starting a business in your local area.

In fact, start two.

Let the local zoning commissions, city council and other regulating agencies know that you are starting a business, that it will employ you and nine employees, and then keep track of what fees you must pay and how many hoops you must jump through.

Have your agent announce to the same agencies that a separate company, a big corporation, is bringing in a large enterprise that will employ 4,000 people (or, in a more urban setting, 24,000 people)—all of whom will pay taxes to the local area and bring growth and prestige.

Then simply sit back and watch how the two businesses are treated.

In most places in the United States, one will face an amazing amount of red tape, meetings, filings and obstacles—the other will likely be courted and given waivers, tax breaks, benefits and publicity.

Add up the cost to government of each, and two things will likely surprise you: 1) how much you will have to spend to set up a small business, and 2) how much the government will be willing to spend to court the large business.

Of course, I don’t really suggest that anyone announce such a fake business.

But imagine, theoretically, what would happen if you did.

Our current mentality in government is to treat big business better than small business.

This is the natural model in a capitalist system.

Capital gets special benefits.

In free enterprise, in contrast, the costs and obstacles would be identical for the two businesses.

In free enterprise, the operative words are “free” and “enterprise.”

Note that American business and ownership stayed mostly small—with most people owning family farms or small businesses—until the 1960s.

It was debt (often promoted by government) which wiped out the farming culture that dominated the South and Midwest, and the rise of big corporations over family-owned businesses came after the U.S. commercial code was changed by law to a capitalist rather than a free enterprise model.

If we altered today’s laws at all levels so that government entities treated all businesses and citizens the same, regardless of their level of capital, the natural result would be the spread of more small businesses.

Note that nearly all major growth in America’s economy since 1985 has come from small business.

Today, small businesses are struggling under a veritable “mountain” of regulatory red tape—the result is economic downturn.

And, while some in government hold an anti-business attitude, even many of those ostensibly promoting pro-business policies are more aligned with Wall Street corporations than the needs of small business.

Capitalism, sometimes called “Corporatism”, is not the same thing as free enterprise.

Both are certainly preferable to socialism or communism, but free enterprise is considerably more conducive to freedom and widespread prosperity than capitalism.

History has proven the following: 1) Under capitalism, the divide between rich and poor naturally increases; 2) In a free enterprise system, the prosperity, freedom and dignity of nearly everyone in the society inevitably rises.

Alexander Solzhenitsyn pointed out that while modern American capitalism was clearly better than Russia’s twentieth-century communism or Europe’s contemporary attempts at socialism, the U.S. implementation of capitalism left much to be desired.

For example, he noted, under American capitalism the question of, “is it right?” became less important to many people and companies than, “is it legal?”

Likewise, the culture of capitalism frequently asks, “is it profitable?” before (or instead of) asking, “is it good?”

American capitalism, Solzhenitsyn said, created a nation more materialistic than spiritual, more interested in superficial success than genuine human progress.

Note that Solzhenitsyn was adamantly anti-communist and anti-socialist.

But he also found capitalism lacking.

In every particular, however, Solzhenitsyn’s criticisms of capitalism don’t apply to the free enterprise model of economics. When the law treats all people and businesses the same—regardless of their size, connections, power or wealth—an interesting consequence occurs.

Put succinctly:

  • In socialism the government ignores, downplays and literally abuses prosperity and freedom to the point that both are lost for nearly everyone.

 

  • Under capitalism, the laws promote the wealth and license of a few above the freedom and prosperity of all, with the cultural result of valuing attainment of wealth above almost everything—including virtue, compassion, and the liberty of all.

 

In free enterprise, the laws treat everyone the same, thereby incentivizing freedom, prosperity and enterprise (as long as such enterprise doesn’t violate the inalienable rights of others). The application of this model is rare in human history, but the results when it has been applied are nothing less than spectacular (see Ancient Israel, Athens, the vales period of Switzerland, the Saracens, the Anglo-Saxons, and the United States—which by 1944 had 6% of the world’s population and produced over half of its goods and services).

The lesson?

Freedom works.

Enterprise works.

Oliver DeMille

 

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About Cody Newton
I'm happily married with 5 kiddos. Thankful to God for changing my life and revealing where I can be better. Love spending time with family, at church, doing business, laughing, fishing, hunting, boating and about anything outdoors.

4 Responses to Free Enterprise vs Capitalism “Which one is Better?'”

  1. Hans Widener says:

    Wow! That’s amazing! I’m gonna use that at school!

  2. Bernie Zuniga says:

    Awesome information. What a great moment it will be when we realize that most of the country is learning and applying principles that matter again.

  3. Fred Finke says:

    With what we have our hands on regarding The Team business and The Life business, we are definitly bring back Free Enterprise to a failing economy. I am so blessed to be in business with the Newton’s and have the opportunity to bring these businesses to people so that they may be able to realize their hope’s and dreams. Thank you and God Bless, Fred.

  4. Very well stated!

    It is amazing what you learn when you have your own money and time at risk. Some of these lessons you learn when you hope to start or expand a business. Even when you do take the risk you start to wonder why is this so difficult. I am adding value to my community. I will employ local people and pay local taxes. Why would something that could give opportunity and benefit to everyone seem to be so difficult. Sometimes many small business people struggle and often go out of business or give up and don’t know why it should be so difficult and the laws so anti-business when in fact it is business that is the backbone of the economy and provides jobs.

    It seems the education system has done a very good job at confusing the students in this country. We are taught we live in a free enterprise country when we are not. We are taught that America was established as a democracy and it was not. Whether we were miseducated intentionally or because those who teach didn’t know the different themselves I can’t say.
    What I can say is that I agree with you Cody that the information provided by theses Top 25 Leadership Professionals and their Team of educators is right on.

    What Americans need more is real life education from those who put to practice the principles of free enterprise and success. Maybe their is some truth to the statement “Those who can’t, teach”. Thank goodness that is not the case with the LIFE leadership training because those who do in this case teach.

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