Lawrence Kudlow has decided to defend the virtues of capitalism by attacking Bill Gates. While I’m in no mood to defend Mr. Gates (I am after all cursing my PC and all of its aggravations as I type this), Kudlow’s defense of capitalism has some very comical moments. Take this line for example:
For all his do-good preaching, Mr. Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people out of poverty and into the middle class over the last decade. Think China. Think India. Think Eastern Europe.
That’s right – if 100 million people are now middle class, we don’t have to worry about the couple of billion who are still in poverty.
And then there is account of the People’s Republic of China:
The latest stats out of China are revealing. Here’s a country that was a basket case not so long ago and today is the world’s fourth largest economy hot on the heels of Germany, the third largest economy. China just reported 11.2 percent fourth-quarter GDP, its fastest growth rate in thirteen years. Total output for China is now 24.7 trillion yuan, or $3.42 trillion at current exchange rates. At $14 trillion, the U.S. economy is still four times the size of China’s. But we’ve had free-market capitalism for more than three-hundred years. China’s only had it for about fifteen. China is still an undemocratic, authoritarian, and repressive society that lacks the benefits of political freedom. But it was the late Milton Friedman who argued that the onset of free-market capitalism was the precursor to full-fledged democratic capitalism. China’s on the right track.
Kudlow’s case that China is not so poor might have been better had he bothered to note its GDP by purchasing power parity was half that of the US. Of course, China has 1.3 billion people while we have only 0.3 billion people, which means its per capita GDP is still much lower than ours. But I have to wonder if the average Chinese citizen agrees with Kudlow that their nation is becoming more democratic.
And there is Kudlow’s claim that rising inequality occurs because of the lack of capitalistic principles. Hmm – the U.S. has seen a rising in income inequality. I wonder if that means our economy is socialistic in Kudlow’s view?