Myths, Lies and Capitalism


Here are five myths about free enterprise. Myth Number One. Free enterprise hurts the
poor. Since 1970, the percentage of the world’s
population living on the equivalent of less than a dollar a day has fallen by more than
80 percent. This was not the result of foreign aid or
U.N. development projects. It was the spread of free enterprise that achieved this miracle.
In China alone, free trade and foreign investment — investment, not aid — lifted 400 million Chinese out of abject poverty in just the 20 years between 1981 and 2001. There has never been a force for helping the poor that has come close to free enterprise. Myth Number Two. Free enterprise is driven by greed. If entrepreneurs were all about money, they’d be far better off getting a secure job in civil service. According to a recent survey by Careerbuilder.com, small-business owners made 19 percent less money per year than government managers. Entrepreneurs are driven by a fierce desire to control their own destiny. They strive
for something I call “earned success.” For some people, earned success means business
success; for others, it means raising good kids, building a nonprofit, or making beautiful
art — whatever allows people to create value in their lives and in the lives of others.
Only free enterprise gives them the personal freedom to do that.
Myth Number Three. Free enterprise breeds envy. Since 1973, the General Social Survey has asked Americans whether they believe good
luck or hard work is more important in getting ahead. For 40 years, between 60 and 70 percent
of Americans have chosen “hard work.” In a recent poll, the Pew Research Center
found that 88 percent of Americans said they admired people who get rich by working hard.
This view is unique to the United States. According the World Values Survey, Americans
are more likely than those of other nations to attribute success to hard work. Americans
are twice as likely to do so than the French. In a society that rewards initiative and offers
opportunity, free enterprise fosters aspiration and ambition. It is in societies that have much less economic freedom and far fewer entrepreneurs and therefore economic stagnation that you
find envy, resentment, and often unrest. This is the case in Europe, where people demand
more and more government benefits instead of demanding to keep more of what they earn. Myth Number Four. Free enterprise caused the Great Recession. It wasn’t free enterprise that was at fault; it was the lack of free enterprise. Statism
and its co-dependent spouse — corporate cronyism — melted down our economy.
As my American Enterprise Institute colleague Peter Wallison has documented, two decades
of misguided government policy created the conditions that led to the housing bubble.
When housing prices collapsed, so did the whole financial system. And who showed up
first in the bailout line? Large corporations, including car companies, big banks, and the
government-backed mortgage giants Fannie Mae and Freddie Mac.
This isn’t the free market at work — not even close. It’s a toxic mix of big government
and its corporate clients. The solution is more free enterprise: where entrepreneurs put their money on the line and earn a profit or suffer a loss. Myth Number Five. Free enterprise is unfair. When I was an economics professor, my students
would sometimes argue that it was “not fair” for the rich to have so much more than the
poor. So halfway through the course, I proposed that a quarter of the points earned by the
top half of the class be passed on to the students in the lower half, to improve grade equality. All of a sudden, discussion about fairness ended. We all acknowledge that some income redistribution is necessary to pay for government and to
finance a social safety net. But as long as people are free to earn money, some will earn
more than others. For a majority of Americans, fairness is not redistributing wealth; fairness is rewarding merit — and that’s what free enterprise does. Free enterprise — like freedom of speech, freedom of assembly, and freedom of religion
— makes our nation more fair, not less. I’m Arthur Brooks, President of the American
Enterprise Institute for Prager University.

100 thoughts on “Myths, Lies and Capitalism

  • This article tears apart the first point: http://www.aljazeera.com/indepth/opinion/2014/08/exposing-great-poverty-reductio-201481211590729809.html

  • OK I do love this channel but ffs it's 80% less people living for <$1/day since 1970 for a simple reason that $1 in 1970 was as much as $6.55 today. It's called time effect on money.

    Other than that it's perfect though. But that one stupid mistake leads to a great overestimation of changes in the world.

  • We live in a world where people want government to take care of us in every single way. Since when is more government is better?

  • LBJ married the poor and especially poor single mothers to the welfare system with his "War on Poverty" . Dems are doing their level best to buy even more votes by encouraging open borders, legalizing current illegals and granting welfare benefits to so-called anchor babies–thereby supporting the whole family for the sake of the child. Strong entrepreneurial, religious and family values among many Hispanics are stifling their efforts. However, drug gang related immigration is flooding Hispanic communities with violent, virtually unemployable young men and narco-enclaves are being carved out across the country. Now, Dems are promoting the importation of (mainly) young, violent, unemployable men from the Middle East. High birth rates and traditions of female sequestering are guaranteeing huge increases to the welfare rolls. This all amounts to a "Brown Down" of the United States, Canada, and much of Europe. Demographic surveys predict minority status for whites by mid-century. Third world status is economically inevitable unless drastic changes are made. In short, you and everyone who looks like you, white folks, is dead or hiding in Iceland within a hundred years. Still want to support the folks bringing this holocaust to you?

  • I support the message, but the contradiction is that you accuse the poor of wanting to redistribute wealth because they envy the wealth of the rich and claim that capitalism doesn't create things like envy.

  • Free enterprise is not capitalism. You call this video "Myths, Lies, and Capitalism," reference capitalism when you reference banks and corporations, then talk the rest of the time about free enterprise.

    Capitalism is control of the economy by monopolization of capital. Ownership of the means of production. It has nothing to do with free enterprise.

  • The points analogie is off the mark for several reasons:
    First, imagine that there was no maximum and people could earn more points than they need.
    Then imagine that, as soon as there is a certain number of points they automatically start stealing or destroying other peoples' points.
    Then imagine that points could be inherited, so that some were born with huge amounts that they could never possibly need, and others with such great numbers of negative points that it would take several life-times' work just to reach zero.
    Then imagine these same people had to do three or four classes simultaneously.
    Then imagine they only got half the amount of points for the same work.
    Finally imagine that the distribution of the points was not in the hands of a neutral professor, but decided by those who currently have the most.

    This is our current situation, and you might say that it was due to "cronyism" and improvable within the system. But if we right now had a society where everyone starts at zero and is rewarded equally for the same work, we would be back where we started within no more than one or two generations. Because we would still have the "points stealing other points", which is the metaphore for private property.

    (PRIVATE property is not the same as PERSONAL property!)

  • I used to be all pro capitalism, but after watching the country fall into this corrupt crony capitalism black hole with massive waves of structural unemployment caused by technological advancements combined with a lack to affordable education and training. Then the reclassification of employees to independent contractors with the purpose of denying benefits and minimum wages. Then seeing it's skeletons first hand by talking with literally slaves abroad in third world countries so poor they sell their children into slavery to try to catch up. I quickly learned that hard work is worthless, although by being very smart, tactical, ruthless, cunning, and manipulative with a little luck sprinkled in can be very successful. You must work hard of course, but hard work alone is a waste of time without proper planning. To make it even worse you can make much more profit, by making OTHER people work hard and sitting back being lazy. Thus, I am taking the smart and ruthless path to success, but I am starting to rethink whether this kill or be killed capitalism with only the law as the guide is really the best option or even if morals or ethics even exist in capitalism. I worry it will lead to our country (the United States) own suicide from class warfare when the middle class is inevitably destroyed in 30 years. According to current projections the middle class will be wiped out by the end of the century unless major reform is done. This is because you can't start a business and innovate without some capital. Once all the capital is completely in the hands of a very small percentage the rest of the country will be living in abject poverty probably addicted to the virtual reality of the future doing drugs, and alcohol.

  • the 60-70% americans who believe that hard work is more important then luck in getting ahead economically is simply wrong. The only thing this statistic proves is that Americans compared to other nations, have a uniquely poor understanding of their own economic system. This is something American politicians and opinion makers should be embarrassed and concerned about, not proud

  • I'm so glad that you mentioned having n good kids. I was making closer to $100 K per year 12 years ago, when our youngest child was born. My husband and I have decided before having children, that I would stay home to raise them well, and that's what I did.

    I feel EXCEPTIONALLY successful, honored abd blessed to have been able to have these children.

    All three of my children are obedient, respectful, and just wonderful human beings. I have an adult daughter from a previous marriage, and two with my current husband, 12 and 14. Every stage is just fun, but I like the teenage years So much!

    In any case, thanks again for mentioning that. As a mother, I appreciate that 😊👍👍

  • House: $400K paid for. New Ford F150: $38K paid for. Used Harley Davidson: $6K paid for. Income <$80K. Yeah, capitalism really sucks, man!😝😝. Oh, forgot one thing; just adopted 4 month old kittie🐈 from the local shelter. Oh, and capitalism sucks, man.😝 Uh, I am of course being facetious. Does that make me a Fascist?

  • Total BS. What's wrong with facism. Nothing. Hitler just gave it a bad name. In capitalism where u r born is where you will stay. Born to wealthy business owners you will be wealthy. Born to poor factory workers you will also be poor as your parents cannot afford schooling

  • Dude is a savage for that grade thing, only way for college know it all snowflakes to actually see how the real world works!

  • This video speaks as if anti capitalists hate all forms of business. As an anti-capitalist, this isn’t the case. Of course business is fine. I have no problem with someone earning their fair share of cash. What I do have a problem with is someone earning their money through the business they built, and then not paying a sufficient amount to the workers that got them there.

  • well… unfortunatly around 100 milion of those 600 milion chinese still livs on less then 2$ a DAY!
    and 1 bilion chinese live on lest then 10$ a DAY!

  • Fairness means inequality with the advantage given to the party that would lose if things were equal.

    Example 1: The golf course hole distance is less for women than for men. Unequal = fair.
    Example 2: The amount of weight a fire fighter candidate is required to carry is less for women than men. Unequal = fair.
    Example 3: The grade average required to enroll in Ivy-League colleges is different for minorities. Unequal = fair.
    Example 4: One American pays one income tax rate and his neighbor pays a different rate. Unequal = fair.

    I could go on and on. The worst thing about fairness is that it's ALWAYS determined by the party that would lose if things were equal. What is fair ALWAYS varies and cannot be known in advance to anyone.

    Equality is a wonderful, beneficial, and stabilizing idea. Fairness is just the opposite.

  • Think socialism is good look at China. The reason why China is doing well is they opened up the market, a semi capitalism. Now look how they are doing?

  • Has free trade supported foreign nations and improved our own quality of life? Sure. Other countries have gone from poverty to child-and slave labor, so technically they're better off. We get an I-phone cheaper, so technically we're better off. Our own companies can't compete, so salaries are cut or businesses go bankrupt. We're off worse. We're more dependant. Or we can reinstate slave labor or pay workers 1$ a day to compete. Bottom line, free trade drains our finances, which we send abroad, and development. And once we've become completely dependant, nothing is to stop foreign traders to jack up the price artificially. As much as I hate to say it, it's not a bad idea to tax foreign goods to remain competitive. Meanwhilst, I'll enjoy my cheap I-phone, and continue to struggle to find a job developing one.

  • Do you have any proof that it was free enterprise that reduced the poverty rate. Not saying it is bad but you just didn't give any.

  • capitalism is not the true answer on all your points. you are telling half truths. typical never get the complete truth from either a liberal or conservative can't trust either one.

  • It's called an Oxford comma, PragerU. You didn't use it for your title and it suggests that lies and capitalism are both myths. So congrats to you on your incorrect punctuation somehow fixing your factually incorrect video because I agree, capitalism is a myth. There is only fascism with an underlying foundation of a capitalist economy.

  • Many capitalist and right wing leaders' views are completely based off myths and lies, so i like the title of the video

  • Amazing! Thank you. In a culture of "they shouldn't have more than me" it's nice to hear someone support and not condone others success.

  • Myth, lies=Capitalism
    Unlike your extreme answer to your students, there are rights that people should have and thanks to private corporations and capitalism they are blowing away with the wind. It is one thing to divide your students points because some studies more than others, but it is a very different thing when poor people don’t have anything. Picture this, there is a man who works on a private company, he studied, he works hard and cares for his family. He cultivates, construct, mines and teaches. But in front of his small simple house is a bigger one, ten times more big and luxurious. It belongs to the owner of the company. The only thing he did was get an a plus and made a fortune typing on a computer which is a far easier job than the one his neighbor employee who lives in front of his house carries out which by the way is more productive than the owner. Who deserves more money?, they both deserve a good life because they work, but who deserves more? Not only that, then monopolies keep expanding thanks to greed and this phenomenon keeps on happening over and over again. After that we see that poverty keeps on reproducing, because salaries don’t raise, but the work does.

  • Thank goodness we are still capable of producing people such as this. He just said everything I was once taught in HS economics in a time long, long ago. I thought these ideas had been finally stamped out. For an old fart like me to watch something like this: Absolutely stunning. Thank you America for creating Arthur Brooks in the 21st century.

  • Its funny over the last few years I have turned into the kind of person I used to make fun of. Others tend to make fun of it too since well my views arent popular. Im a christian, conservative, vegan. And I have stopped caring about others opinions. Its so freeing.

  • https://www.nature.com/articles/d41586-017-08808-y?WT.mc_id=TWT_NA_1712_HUMANSRESPONSIBLECLIMATE_PORTFOLIO

  • Seriously, though. I just want one explanation. The top earners just redirect. They call the shots and their employees do hundreds of peoples' worth of work for them. How is that fair?

    No, I am seriously asking. I WANT to believe it's fair, I'm an ardent capitalist. But I can't wrap my head around bosses basically just managing the way their money flows while other people do the work as being fair

  • but 1$ now has less spending capacity than in the 70ies. 1$ in india has more spending capacity than 1$ in the USA. If i lived in India i could live a middle class life with 30€ per month but in germany that wouldn't be possible. you can't just compare summs of money over time and places. Capitalism is crap, prageru is crap. if you try to defend Capitalism at least but some effort in the arguments.

  • you can't compare the grading system in schools or colleges to wealth distribution. If laziness were the only problem in schools and students lifes the comparison would work but this is not the case. There are diffent kinds of people. everyone is learning in a different pace and in a different way. some people are better in understanding written text than in words they are listening to. In a perfect education system teachers and better students would help weaker or slower students to learn in different ways until they understood everything. in a perfect education system no one (or fewer) would get left behind. we don't want the better students to get grades that are worse. we want the weaker students to have the same chance on getting good grades. the same thing goes for wealth distribution. we don't want the rich to be poor. we want the poor to have at least the same chance on getting rich as well. until there are no more poor people which, ofcourse, would make the terms "rich" and "poor" useless because there would be no such thing anymore

  • This is a beautiful peace of hugwalsh ! I hope his class determined that he is a Milton Freedman nut. now this is the reality https://youtu.be/5PaLxOkjvJE

  • Capitalism is an imperfect system for the distribution of wealth;
    Socialism is a perfect system for the distribution of poverty.

  • Arthur Brooks sounds convincing at first, but let's take a closer look at his arguments:

    Myth #1: "Free enterprise hurts the poor". The truth is that free enterprise reforms has been devastating to developing countries since the 80s. First of all, there is no such thing as a free market. Rich countries dictates the rules of the so called free market. Rich countries have become rich through the combination of protectionism and subsidies that they don't advise the developing countries to adopt. Valid statistics reports that since the 80s the poorest have got poorer, fewer people can afford the basics, and the poor are likely to get poorer: http://www.theguardian.com/politics/reality-check/2013/oct/02/poor-richer-poverty-living-standards.

    Myth #2: "Free enterprise is driven by greed". Brooks gives us the impression that all entrepreneurs are the same. Short-term speculators is not the same as a small business owner. The financial crisis was generated by greedy investment bank and other unscrupulous actors.

    Myth #3: "Free enterprise breeds envy". The stagnation of sallaries since the 80s make working people work harder for less. It's not about envy, but about getting rightfully frustrated by witnessing the increasingly unfair income and wealth distribution caused by corporate power. http://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/

    Myth #4: "Free enterprise caused the great recession". Brooks does not explain how more free enterprise will save us from new recessions. He is creating a myth that is not backed up by any evidence. Free enterprise has made it possible in the first place to create the unhealthy alliance between the state and its corporate clients. Instead, we need to regulate lobbyism and the free movement of corporate actors in politics, and reinstall real democratic processes, not more free enterprise.

    Myth #5: "Free enterprise is unfair". Yes, it is! Speculation can make you immensely rich by doing nothing but moving assets around, making no value for others than yourself. In comparison, a nurse in most countries today earns hardly enough to make a decent living, and she lives of helping sick people.

    The narrative of Arthur Brooks is a very simlistic and biased one. Nowadays, people know the price of everything and the value of nothing

  • 0:25 the Commies in China knew that Communism couldn’t sustain itself, so they became a more free market country, but kept the authoritarian government. That is why they succeeded economically ( the free market, not the authoritarian government. ), which modern socialists and communists in America seem to forget when they say that communists are beating capitalists economically.

  • I almost always commend the accurate message delivered by PragerU, but they got it wrong with Myth #4 this time around. Mr Brooks didn't note that the costs of free enterprise were going to be socialized by necessity, given how ingrained banking is to a healthy economy. The banks freeze – as they did – the rest of the economy freezes along with it. Whether it was right or wrong for government to intervene can be debated, but without question the poorest among us would have been far worse off – even if only temporarily – if nothing was done to dislodge the banking sector after the crash.

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    We use the selfless circle shape/structure in Love within our business structure model.
    The result/effect of our Public Charity IP structure is an offset for an Empowerment of Surplus to the Residential tax budget that benefits in a non-discriminatory manner to all. This business structure operates in a circle that spirals upward as an offset in surplus from micro to macro, but returns exponentially to any individual contributor.
    We divide the tax budget twofold as Educational and Residential because approximately 50% of every town's tax budget pays its Public Education expense. 
    Selflessly,
    Ps. The surplus offset will spiral upwards to Middle School, High School, and then Community College when applicable. If there is no Community College, it will go to the town's Public Library or follow the restrictive guideline. 
    (Global IP Gift) https://t.co/SmPM4EGJrN

  • I live in the UK, where we have the national health service. this was a socialist idea. No I am not a socialist but I love our NHS and that is why I cannot call myself a capitalist. I can't call myself a socialist either because I don't think the degree of equality of outcomes socialism posits is good for society. it's the welfare system by that our party labour put so much prominence on in an indignant effort to help the poor that actually constructed an underclass as as a result of the dependency culture that was promoted. I am completely with the functionalists on this one: Social mobility is everything. the state must pave the way for social mobility. the evil is not the absence of a certain equality of outcomes but the deprivation of an equality of opportunities. free enterprise is depicted as the evil; it isn't. it's just lacks what our youth labels "edgy". we need to know our enemy if we ever want to make society better. If we assume our enemy based on what seems and never look below the surface into the profound depths then we'll spend our struggle desperately uprooting all that seems wrong and will never target that which is actually wrong. the welfare system seems good, and it is, but it's current exercise is excessive and supports the wrong people.

  • How can one claim to support capitalism yet at the same time promote protectionist policies that are inherently detrimental to the free market? Retards that's why.

  • I think that free enterprise within a country is beneficial but when you put foreign countries into it, it may be harmful

  • The key is to provide for oneself, you don't rely on no on.My grandparents did this with my grandfather being born in 1898 and died in 1973 and my family still uses this.No strings attached.

  • Have you ever considered that conservatives are the snowflakes because they crack under pressure on a website? They don’t even know who we are!

  • How is this a miracle? So because men so-called created this system and created such value and "saved" poor people, they did the impossible or they made what was not natural become natural and what is not to be as if it were?

    The 5 myths he has listed doesn't speak to free enterprise's value at all. What it does is give a vehicle to speak against it's detractors.

  • Cronyism? Wow, never thought a conservative channel would acknowledge that… now how are they going to defend Trump. Btw, pure capitalism does not exist and yes, some people are at a disadvantage, it's not about merit as you would like for us to believe.

  • So, capitalism is a perfect Utopia, where nobody games the system, and wages just keep going up commensurate with inflation.

    I'm glad somebody told me that, because I wouldn't have known just by looking.

  • A very good video explaining the ideal doctrine. However, in real life it inevitably comes to a situation described starting 2:53

  • There's no firm evidence that he actually ever said it, but President George W. Bush's reputed utterance to British Prime Minister Tony Blair that –
    "the trouble with the French is that they don’t have a word for entrepreneur"

  • You forgot to destroy the myth that with free enterprise the rich controls the poor. That uninformed myth is getting pretty old hat.

  • Capitalism is the best thing ever. However…
    Problem is that we let the Point One Percent *CHEAT ON CAPITALISM*. For example, they hire people from markets they shouldn't have ANY access to, for the purpose of business done in the US, in order to sabotage middle class wages. They created personal credit and insurance, so that you could afford things without saving, sabotaging capitalism again. How is this sabotage? Well it allows prices to rise arbitrarily without the usual controls. How much would a home or a car cost if literally nobody could get a loan for them? How much would a call at the doctor's office cost if literally nobody could get health insurance? Through personal credit and insurance, they've found a means to get people to voluntarily enslave themselves.
    So yeah. Capitalism is not the problem. Sabotage of capitalism is.

  • The reason of the financial crisis was that entrepreneurs speculated to much. This is not in generell because of capitalism but because of a mentality which created only greed, and I mean this in a bad way.

  • Thanks PragerU for clearing up a communication connundrum. if we can get further away from the resentment centered politics there will be less suicides, crime, and violence.

  • Now the crazy left want to raise the minimum wage. They don't even know what minimum wage is for. They think a bag boy in a grocery store should make as much as a roofer. The only thing a minimum wage increases is inflation and then they will cry because 15 dollars an hour will not be enough.

  • China is my favourite example .It was a really poor country where 40 million people died from starvation and today it is the second richest country .

  • When the teacher says if you have something you better share with everybody.

    I’m like, UM this isn’t socialism!

  • Would you rather?
    1) Lift everyone out of abject poverty and allow a few to create unimaginable wealth.
    OR
    2) Make everyone equally poor.

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