By Howard Rich
originally published at Investor’s Business Daily.
Klaus Schwab, a German academic and founder of the World Economic
Forum, recently proclaimed the death of capitalism as we know it — a
curious critique coming from the head of an organization whose motto
finds "entrepreneurship is in the global public interest."
"Capitalism, in its current form, no longer fits the world around
us," Schwab declared at the most recent installment of his globalist
gathering in Davois, Switzerland, adding that the world's business and
political leaders "have failed to learn the lessons from the financial
The latter half of this observation is indisputable. The doctrine of
chasing good money after bad has reached dangerous dimensions on both
sides of the Atlantic — yet leaders continue to plow ahead with new
deficit spending and fresh bailouts regardless.
But is refusing to acknowledge the increasingly-costly failure of
this ever-escalating interventionism really an indictment of capitalism?
It would be easy to condemn Schwab for conducting a botched autopsy on
the capitalist economic model, but what he's really done is more
intellectually dishonest — he has misidentified the "victim."
Capitalism is far from dead. As proof we need only examine the
ongoing rise of the global black market — which employed 1.8 billion
people (half of the world's work force) and did $10 trillion worth of
business in 2009. Within a decade, this "shadow economy" will employ
two-thirds of the global work force and represent the largest economy on
More conventionally we ought to consider China — which has embraced
free market reforms and seen its economy expand 16-fold over the last 30
years. In the last two decades this rising tide has lifted an
estimated 440 million Chinese out of poverty.
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