Jenny Beth Martin asks Lawrence W. Reed for cases where capitalism saved a country, and he gives two that could not be more different.
The first is Germany. By 1945 it was flattened, defeated, demolished, demoralized, divided, and occupied, after twelve years under a party whose own name was the National Socialist German Workers' Party. Then a man named Ludwig Erhard worked his way up to finance minister and eventually to chancellor, and one night in 1948 he went on the radio and told the country that as of tomorrow morning there would be no more price controls, no more rationing, lower taxes, and lower tariffs. Within a decade West Germany was the wealthiest country in Western Europe. East Germany, next door and occupied by the Soviets, went the other way and became a place people risked their lives to leave. Reed calls it a real life laboratory.
The second is Hong Kong. At the end of the Japanese occupation it was, in Reed's words, just a rock with 750,000 people on it. No resources, no reason for anyone to invest. John James Cowperthwaite worked his way into the top financial positions there and made a bet: if we have nothing else to offer, we will offer the freest economy in the world. No tariffs, no minimum wage, no interference, just rule of law and punishment for wrongdoers. Hong Kong became the richest enclave on earth, and stayed that way until Beijing began to meddle.
Then Reed makes the claim that carries the whole hour. There are cases where socialism wrecked an economy and capitalism had to fix it. There is no case anywhere in history running the other way.
This is part two of a four part economics series with Lawrence W. Reed, president emeritus of the Foundation for Economic Education.
Watch the full episode and the rest of the series at jennybethshow.com. Learn more about Tea Party Patriots Action at teapartypatriots.org. To reach your senators and representative about federal spending, call the Capitol switchboard at 202-224-3121.
00:00 — Where Capitalism Rescued a Country
00:15 — Germany, 1945: Flattened, Divided, Occupied
00:55 — Ludwig Erhard Goes on the Radio
01:56 — The Wealthiest Country in Western Europe
02:41 — Hong Kong: A Rock With 750,000 People
03:33 — The Freest Economy in the World
03:56 — No Examples Running the Other Direction
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