Phil Castle, The Business Times
Private property rights, enterprise and freedom of choice — all hallmarks of capitalism — can help to increase economic performance and decrease poverty, according to two economists who spoke at a conference for high school students in Western Colorado.
John Brock and Donald Fell reviewed economic principles and discussed the issue of whether or not capitalism is good for the poor at the Western Slope Economic Leadership Conference at Colorado Mesa University in Grand Junction.
The Freedom & Responsibility Education Enterprise (FREE) Foundation hosts the annual conference. The foundation provides resources to students and teachers in Western Colorado to promote the understanding of economics, financial literacy and free enterprise. A total of 160 high school juniors and seniors attended the latest conference.
“We are honored that business students and teachers from across the Western Slope have found the content of our conference valuable enough to come back year and after,” said Kelly Johnston, president of the FREE Foundation. “This year we even had student leaders who eagerly applied to assist with the day. We are happy to help the student leaders and attendees gain additional insights into economics, leadership and business that they can employ in a few short years.”
Brock serves as director of the Center for Economic Education at the University of Colorado at Colorado Springs and vice president of J.V. Bruni and Co., an investment adviser firm. Fell is program director for the Foundation for Teaching Economics Institute on the Environment and the Economy, the Right Start Institute and One Day teacher programs.
Brock started his presentation with a review of economics and economic principles. Economics is a study of choice, he said, because scarcity forces choices. “You can’t have your cake and eat it, too.”
Making choices comes with costs, including the opportunity involved with making different choices, he said. Incentives influence those choices, but so does knowledge and evidence.
Fell continued the presentation with a review of such economic goals as employment, equity, growth, security and stability. He also discussed the roles of the rule of law, property rights and markets.
The question, Fell said, is how to organize an economy to achieve goals. That’s where such “isms” as capitalism, communism and socialism come into play. There are similarities and differences among those systems, he said.
The similarities and differences among capitalism, communism and socialism involve who decides what products and services to produce and for whom, Fell said. Under capitalism, households and businesses make those decisions. Under socialism, government makes those decisions, he said. Pure communism doesn’t exist, he added, because there’s no role for government.
The United States has a mix of capitalism as well as socialism in public schools and government benefit programs, he said.
One of the most important questions in economics, Fell said, is why some nations are wealthier than others
One way of measuring wealth, Fell said, is to consider gross domestic product — the value of goods and services produced in a country — divided by the number of people living in that country.
While the abundance or scarcity of natural resources plays a role, there’s also a correlation between private property rights and per capita GDP, he said. And there’s a correlation between wealth and health, including longevity.
In general terms, the wealth and health of countries around the world have increased over the past 200 years even as extreme poverty has decreased, he said.
Differences remain, however.
On the Korean Peninsula, for example, annual per capita GDP in South Korea and North Korea was the same in 1953 at $67. In 2016, however, annual per capita GDP had increased to $29,287 in South Korea but $1,300 in North Korea. One reason is the property rights and freedom of enterprise and choice found in South Korea.