Lawrence W. Reed has spent his life on one question, and in this hour he answers it with the record instead of the rhetoric. This is the second of four conversations building economics from the ground up with Jenny Beth Martin, and it is the one about systems. Not slogans. Systems.
Reed's definition is the frame for everything that follows: capitalism is what happens when you leave peaceful people alone. It is not designed, it is what appears in the absence of a designer. Socialism, he says, is a contrivance. Somebody has to sketch it out, and somebody has to make you live in it.
Then he lays out the evidence. West Germany in 1945, flattened and divided and occupied, and the night Ludwig Erhard went on the radio to say that as of tomorrow morning there would be no more price controls and no more rationing. Within a decade it was the wealthiest country in Western Europe. Hong Kong, a rock with 750,000 people on it and nothing worth coming for, where John James Cowperthwaite decided the only asset worth building was the freest economy in the world. Against those, the Pilgrims at Plymouth Colony, the roughly 150 utopian communes in nineteenth century America that all collapsed, the Soviet Union, and Venezuela.
Then the harder conversation. Millions of Americans are being told from pulpits and campaign stages that Jesus taught something close to socialism. Reed wrote the book on that question, and he answers it parable by parable.
In this episode:
-Why Karl Marx coined the word capitalism and then spent his life attacking it
-The hockey stick, and what actually changed around 1750
-The three forms of socialism, and which one arrived in New York
-Why America is a mixed economy rather than a capitalist one
-Luke twelve, the parable of the talents, the good Samaritan, and the workers in the vineyard
-Romans 13 in context, and the limits of obedience
-The seven principles of sound policy
Lawrence W. Reed is president emeritus of the Foundation for Economic Education, author of nine books including Was Jesus a Socialist?, and a traveler to ninety six countries.
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00:00 — Part Two of a Four Part Economics Series
01:09 — What a System of Economic Organization Means
02:31 — Capitalism Is What Happens When You Leave People Alone
03:46 — The Hockey Stick: What Changed Around 1750
09:45 — West Germany and the Night Erhard Ended Price Controls
12:26 — Hong Kong: A Rock With 750,000 People on It
14:05 — What Socialism Actually Is, in Three Forms
16:16 — Is America Capitalist? The Mixed Economy Answer
19:44 — The Pilgrims, 150 Failed Communes, and Human Nature
21:49 — The Soviet Union and Concentrated Power
22:44 — Cuba, Venezuela, and the People Who Left
25:47 — China After Mao: Forty Years of Going No Place
27:35 — Was Jesus a Socialist? Answered Parable by Parable
36:38 — Thou Shalt Not Steal, Period
44:49 — Feeding the Five Thousand Without Taking From Anybody
47:55 — Render Unto Caesar, and the Camel Through the Needle
53:11 — Romans 13 in Context: Obedience Has Limits
57:49 — The Seven Principles of Sound Policy
01:06:21 — Government Has Nothing to Give That It Did Not First Take
01:07:16 — Character Makes All the Difference in the World
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