Capitalism In Time Saves Mine

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

An interesting side debate has emerged in the wake of last week’s rescue of the thirty-three Chilean miners who were trapped two thousand feet underground for more than two months. Was it capitalism that got the miners out of their hole, or was it government?

The miners came out squinting like men being perp-walked after a late afternoon raid on a strip joint by a sheriff running for reelection, just in time for the evening news.

Hardballer Chris Matthews (except when he interviews Democrats and then he is a soft- baller) used the event to take a swipe at the left’s new enemy, the Tea Party. Had the Tea Party had its way, he opined, all the miners would have killed each other. In fairness, had the left had their way, they would have declared the mine a gay night club and given it stimulus money.

It is clear to me that it was innovative and profit-driven “evil” businesses that had the heft and know-how to spring the trapped men from the mine. Similar to the case of our Gulf oil spill, government did not have the intellectual capital or the tools (ironic, because there are so many tools working in government) to remedy the situation. They had to rely on the expertise and the business imperative of the private sector.

Just as the Minerals Management Service was in bed with BP (the firm with more than 90% of the safety violations but still allowed to operate, thanks to being the #1 donor to Obama and other politicians), the Chilean government failed in its task to regulate this mine.

Speaking of a group trapped way underground in the darkness, the Obama administration has tried to take the credit for the successful rescue. Various religious organizations, excited about the prospect of marketing to an emerging economy like Chile, also took credit. There was even keen interest expressed by some Catholic priests when they thought they heard that there were male minors trapped.

The reasoned observer would logically conclude that, without the research and development of cutting-edge U.S. companies, these miners would still be like our economy: stuck well below where it should be for longer than it should be. Capitalism innovates, rejuvenates and provides. As The Wall Street Journal’s Dan Henninger points out, it was a 74-person small business in Berlin, Pennsylvania that created the drill, based on (make the children leave the room as you read these two newly dirty words) “profit motive,” to free these miners.

Many are all too willing to acquiesce to the rule of a dictator who promises to keep them safe when, in reality, there is no government in history that has succeeded in doing that. In fact, government cannot even protect its citizens from itself. The best chance we have at being protected from business is that, if it makes a mistake, it will be costly in the court system and in the court of public opinion. Reputation is a business’ greatest asset; it determines its success or failure. It is protected as a sacred thing, since it is the source of future income.

Chile is not officially considered the Third World any more, although by the dress of the rescue onlookers, no one has taken the time to tell the Chileans.

Compared to countries like Venezuela, run by evil dictator Hugo Chavez, Chile is probably the most business-oriented country in the region because it listened to free-market economists like Milton Friedman more than twenty years ago. According to the CIA fact book, in 1985 Chile had about $1,300 GDP per capita on a purchasing-power basis. After years of economic reform in the direction of capitalism, it now has over $15,000 per capita. As a result, Chile was more open to the help of Western capitalists in solving the mine problem, and it worked.

As P.J. O’ Rourke mused about non-capitalist countries that, because of government-controlled planning, do not produce the goods a country really demands, “You can’t get good Chinese takeout in China and Cuban cigars are rationed in Cuba. That’s all you need to know about Communism.”

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