Paradox: How Even Socialist Countries Benefit From Capitalism

It turns out that freedom benefits everyone – even people who don’t have it.

by Marian L. Tupy
July 14, 2017

One of the biggest and most pernicious myths about economic development is that capitalism or, as I prefer to call it, economic freedom, benefits the few, while impoverishing the many. The origins of this myth go back to Karl Marx, who thought that, under capitalism, competition would drive down profits, thus necessitating greater exploitation of the workers.

The mistaken theorizing of the German economist – in fact, real average global income per person rose by factor of 10 over the last 200 hundred years – was then updated by Vladimir Lenin.

The update was necessary because by Lenin’s time, the workers in the western industrialized countries were unambiguously better off than in Marx’s time. And so, in his Imperialism, the Highest Stage of Capitalism, the first dictator of the Soviet Union invented a new thesis. Contra Marx, the living standards of the western workers continued to improve because of the riches that flowed to the West from the exploited co…