President Obama, Romney, and Capitalism

A Little Lesson in the Basic Economics of Capitalism

Dinner Topics for Thursday

 

Romney Defends Capitalism

ROMNEY: I'd like to talk about something else that President Obama has been doing. He's been practicing crony capitalism, and if you want to get America going again --you've got to stop the spread of crony capitalism. He gives General Motors to the UAW. He takes $500 million and sticks it into Solyndra. He stacks the labor stooges on the NLRB so they can say "no" to Boeing and take care of their friends in the labor movement.

ROMNEY: We started a number of businesses. Four in particular created 120,000 jobs as of today. We started them years ago. They've grown -- grown well beyond the time I was there -- to 120,000 people that have been employed by those enterprises. There are others we've been with, some of which have lost jobs. People have evaluated that since, well... (chuckles) since I ran four years ago, when I ran for governor, and those who have been documented to have lost jobs lost about 10,000 jobs. So 120,000 less ten means that we created something over a hundred thousand jobs.

ROMNEY: There's nothing wrong with profit, by the way. That profit...

AUDIENCE: (wild cheers and applause)

ROMNEY: That profit went to pension funds, to charities. It went to a wide array of institutions. A lot of people benefited from that -- and, by the way, as enterprises become more profitable, they can hire more people. I'm someone who believes in free enterprise. I think Adam Smith was right, and I'm gonna stand and defend capitalism across this country throughout this campaign. I know we're gonna hit it hard for President Obama, but we're gonna stuff it down his throat and point out it is capitalism and freedom that makes America strong.

People Pursuing Their Own Self-Interest is How This Society Grows and Prospers

Rush Limbaugh transcript

CALLER: Yeah. Thank you, Rush, for taking my call. I've only been listening to you for about three years now, but I gotta tell you, you literally saved me from myself and my own doubts. You know, when I was younger, my parents were the kind that when they had problems, you know, the whole family helped out.

RUSH: Yeah?

CALLER: And now, you know, I'm only 36, but with a lot of people that I work with my own age, it just doesn't seem we have that mentality today that if you have problems, you work 'em out together. You know, everybody's out for themselves. I'm a little nervous talking about it.

RUSH: Well, you see, when everybody's out for themselves, it means that everybody's out for everybody else. That's what that means. It's precisely what it means. Anyway, very kind of you to say that. I appreciate it. Thank you very much.

RUSH: I had mentioned to a caller that everybody working their own self-interest is how everybody helps everybody else out -- and sure as shooting, I go to the e-mail, and blistering attacks from people, "You don't know what you're talking about! That's the problem with you rich people, you're so selfish! All you do is care about yourself and somehow you think that's gonna bring everybody else along! Oh, you don't know what you're talking about!" (sigh) It's amazing to me how woefully inept our economics education has been in this country. Let me define how that happens. Let me explain to you how that happens.

Adam Smith wrote about this. Adam Smith had a book called The Wealth of Nations. It was published in 1776, by the way. That year might remind some of you people of something: 1776. In The Wealth of Nations, Adam Smith wrote the following: 

"It is not from the benevolence of the butcher or the brewer or the baker that we expect our dinner, but from their regard to their own interest." 

When you go to the grocery store, say you go to the meat counter and there's a guy behind the meat counter and you order, do you think that the guy is there to help you, purely and simply? I mean, in doing his job, yeah. You order something, and he provides it for you.

But what's he doing? He's trying to feed his family. He's looking out for himself. He's selling you something, hoping you buy it, because that helps him. He's looking out for himself. At the same time, accommodating you. So in just that one example: The butcher looking out for himself, he doesn't... See, the left wants you to believe that the guy selling meat should sell it to you at no cost so that he doesn't profit from what he's selling or the guy selling the TV set and the dishwasher, whatever, should sell it at no cost. Because if the guy makes a profit on it, then you have been screwed, and he's using you and taking advantage of you and ripping you off! When the truth is he's not giving you a dishwasher to be nice to you. He's not selling you a TV set to be nice to you!

His job isn't to make sure you've got a television set. His job is to make sure he's got one. His job is to make sure his family has food. Everybody benefits in the bargain. I'm not saying the guy behind the counter is selfish. What I'm saying is, him looking out for himself benefits everybody he comes in contact with. It's undeniable, and there must be a profit in the route, otherwise there's not gonna be a guy behind the counter. There won't be any reason for him to be there. How does he go home and feed his family if he sells you whatever it is you're buying at the same price it cost him? (New Castrati impression) "But, Mr. Limbaugh, it's inherently unfair that something should cost me more than it costs somebody else." Well, then why don't you go down the street and try to find it at a cheaper price?

Maybe there's some other butcher selling your filet mignon at a cheaper price. Maybe he's trying to attract more customers with a cheaper price than your butcher, and maybe this guy with the lower price is selling even more filet mignon to more people and more people are benefiting from the lower price! "It's still a profit, Mr. Limbaugh, and that's obscene and it's unfair and it's outrageous," and this is what we're up against, folks. These are the people and that's the kind of thinking that Barack Obama -- our president -- is inspiring, this New Castrati character of mine. They're real, they're out there. They're on the Occupy Wall Street march. 

They're in America's classrooms.

Hello, some of them might even be your … kids) until you get hold of 'em and get 'em straightened out. That's why there's a difference in "selfishness" and "self-interest," but everybody looking out for themselves -- not in a selfish way, but in a self-interest way -- benefits everybody else. The guy behind the counter selling a television set, he's gotta make sure there's a lot of them there to handle the demand. He's gotta make an investment in having a stockroom full of the things that people might want. He's gotta take a risk in how many to buy and what kind, based on the best evidence he has of what people are gonna want and what they're willing to pay. This is so common sense, I can't believe I'm having to explain it!

But we have to every day, because the Mr. Castratis, the New Castratis are everywhere, and the education system is putting them out at geometric portions. They're pumping 'em out, pumping 'em out illiterate people -- economically illiterate people on purpose and by design -- by the millions each and every year. In the same book, The Wealth of Nations, Adam Smith also wrote that the butcher or any producer, quote, "intends only his own gain, and he is in this -- as in many other cases -- led by an invisible hand to promote an end which was no part of his intention. And by pursuing his own interest, he frequently promotes that of the society more effectively than when he intends to promote it."

In other words, the butcher may not have the slightest idea what's happening. The butcher selling you a cut of beef may not have the slightest idea what he's actually doing, but we are all part of an intricate web where we all prosper and benefit from the self-interest of others, not the selfishness. The Wealth of Nations was also an argument against government control. England at the time had chartered monopolies back in 1776. The king decided what companies would do what. That's what Obama wants! Folks, this country was fought for independence from people like Barack Obama, if you must know it, in straight between-the-eyes terms. Barack Obama, if he gets where he wants to go, will become the equivalent of King George from whom our ancestors fled to found this country.

That's what we've done.

That's who we've elected.

We've elected a whole party of these people. He doesn't act by himself, either. When Barack Obama acts in his own socialist self-interest he's got a whole bunch of buddies in the bureaucracy, in the Senate, in the House, in certain governorships who are doing the same rotgut. They're trying to expand their power and their government, and they can't produce anything, as I said in the first hour. Barack Obama -- from the tie to the shoes to the suit to the airplane he flies to the food he eats -- doesn't produce one item of it, and he couldn't if his life depend on it; and here he is attacking, in his speech yesterday, the system that produces it.

  Self-interest is the "invisible hand" that Adam Smith writes about. Self-interest is the invisible hand. It's what is not seen.

But today self-interest has become greed, self-interested is said to be selfishness and greed and so forth. I'm gonna tell you something, folks -- and, again, if you're a moderate, independent, Democrat; you hate me, you're just tuning in out of curiosity; you haven't been here very long -- hate me all you want, but I don't lie to you; and I am here to tell you: The invisible hand -- self-interest, everybody pursuing it -- is how this society grows and prospers and how everybody participates in it. The greed and selfishness in this country is in the White House. You'll find the greed and selfishness at all levels of government. They'll think nothing about taxing you into poverty. They will not do with one penny less from one year to the next.

Why do they get to say what you're worth? Why do they get to say what you have to pay? Why do they get to define what's "fair" and what isn't? Who are they? Why do you put such blind faith in incompetent people you've never met, instead of yourself? Why do you want to trust somebody who's not interested in your self-interest? Why do you want to trust somebody and give your life over to people who don't care about you nearly as much as you ever will? Is it easier than working? Is it easier than facing the daily rigors of life? For those of you who hate me (been told to hate me), I'll give you some reason to here, for the fun of it. I'll tell you another truth: Self-interest, capitalism, has fed more people than charity ever has.

Capitalism and self-interest has fed and clothed and driven -- however and whatever you want to describe -- more people than charity ever has. "Are you putting down charity, Mr. Limbaugh?" No, I'm not putting down charity. I'm trying to educate you idiots. I'm putting down what you believe in.

You know why there wasn't any meat in the GUM store in the Soviet Union? 'Cause it didn't matter to the guy behind the counter. There was no profit in providing meat or toilet paper or whatever. They did it the way Obama wants to do it! They did it the way Mr. New Castrati wants to do it. No profit. Whatever is there costs you whatever it costs whoever to put it there -- except there was never very much there, because there was no incentive to have it there.