CNBC, the top U.S. business news channel, is running propaganda ads in support of unbridled capitalism, including a 1979 clip of right-wing economist Milton Friedman besting talk show host Phil Donahue in a debate over the merits of greed.
"The great achievements of civilization have not come from government bureaus," Friedman declared, citing Albert Einstein's theory of relativity and Henry Ford's development of the assembly line.
Yet, Friedman leaves out other accomplishments -- from the Declaration of Independence and U.S. Constitution to engineering marvels like the Golden Gate Bridge, Panama Canal, the U.S. Interstate highway system and Netherlands' dikes -- that did emanate from "government bureaus."
Going back centuries, you could add in the Acropolis of Athens, the Pyramids of Egypt, the ceiling of the Sistine Chapel and many of the world's great works of architecture and art sponsored by government patrons.
More to the point today, you could note that many of the world's recent achievements resulted from a collaboration of government investment and private industry, like advancement of computer science driven by the U.S. space program or the Internet, originally a Pentagon research project.
However, in Friedman's view -- as embraced by CNBC -- human progress derives primarily from the greed of capitalists.
"In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had capitalism and largely free trade," Friedman told Donahue.
"So the record of history is absolutely crystal clear that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system." [See the full exchange below.]
Since Friedman made his comments in 1979, you could note other recent developments in countries such as China that employ some tenets of capitalism but mixed with a rigid political system that falls far short of "free trade" and "free enterprise."
Yet, CNBC apparently believes Friedman's comments are as true today as they were in 1979 -- that unrestrained capitalism lifts all boats, not just for the rich but for average folks, too. However, the historical record is much more nuanced and complicated than that.
Laissez-faire capitalism has been tried for centuries and -- on its own -- has consistently failed to improve the lot of ordinary people. Indeed, it has proven to be a cruel and disorderly method of organizing a society, prone to boom-and-bust cycles, environmental degradation, massive swindles, scandalous industrial accidents, and a bleak existence for most workers.
The lesson was most painfully learned in the United States when the vast income disparities of the Gilded Age contributed to the Stock Market Crash of 1929 and the Great Depression.
New Deal Reforms
President Franklin Roosevelt's New Deal response -- to address the worst abuses of capitalism and to permit labor organizing as a means of empowering working people -- proved to be a successful approach to balancing the energy of the market with society's broader needs. Indeed, the resulting growth of a middle class made even the rich richer.
It turned out that a well-regulated capitalism, combined with smart investments in the public sector and a unionized work force, was a reasonable model for society, certainly not without its flaws and requiring constant adjustments but functional and profitable.
However, the rich and their acolytes again demonstrated that greed could be its own worst enemy. Instead of building on the lessons of the New Deal, they saw an opening in the late 1970s -- as oil price shocks and other adversities staggered the economy -- to smash the social covenant of the New Deal.