A Cure for What Ails Us

Bailouts, bear markets and joblessness will surely put capitalism on the November ballot. How do you like your enterprise, Mr. and Ms. American Voter—free or stifled or a little something in between?

The 2012 election promises a clear ideological divide. Mitt Romney may be no Ron Paul, but neither is there any mistaking him for Barack Obama. The former private-equity titan will likely take his stand with a kind of almost-free-enterprise—the welfare state as we knew it before ObamaCare, so-called quantitative easing and the enterprise-thwarting dread that someone in Washington is dreaming up even costlier experiments than the ones that have already failed.

"Capitalism" is the epithet that 19th-century collectivists foisted on the economic system of private property and the invisible hand. It's a name that wins no friends for the cause of enterprise. A socialist, supposedly, cares for society. A capitalist ostensibly loves only his stocks and steel mills and strikebreakers. The PR battle was almost lost at the naming.

Books upholding capitalism or denouncing it are as old as the printing press—as to the denunciation, indeed, it is much older. Aristotle and the church fathers condemned the acquisitive spirit. Voltaire and Adam Smith praised it. America's original WASPs were of two minds. Hard work and enterprise were godly virtues, but the virtuous man, by practicing them, could hardly help getting rich. Which is when the trouble started. "Religion begot prosperity," lamented Cotton Mather, "and the daughter devoured the mother."

As time went by, statism devoured prosperity. Today the American economy sleepwalks. Ultralow interest rates starve the savers and finance the speculators. Unanchored exchange rates fire up talk of "currency wars." Where have we gone wrong, and what must we do to turn right?

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