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Rob and Lauren Hudson: Letter of Common Ground about outcomes in capitalism and socialism

Letters for families based on the book “It Can Be Done” @studentsleadusa

We write today to encourage frank discussions about outcomes in capitalism and socialism. We should recognize as common ground that these outcomes can change the arc of our society.

What if we had socialized the computer and electronics industry? We would have needed a head government bureaucrat or a committee to make decisions. They might have been experts, or they might just have been the best politicians.

There might only be one company, which could be a government company, providing computer and electronic products. Profit incentives to develop new technology would not exist. Apple, Microsoft, Dell, Samsung, and others would not have pushed each other to create the next big thing. These companies would not have even been formed in America. Geniuses like Steve Jobs would never have had the opportunity to compete against geniuses like Bill Gates.

In our socialized technology industry, imagine what would happen if a lower-level government employee suggested the idea of a mobile communication device like the iPhone. A likely government response would have been, “People already have phones – they have landlines.”

The iPhone likely would never have been invented. Even if someone had listened, there would have been no economic incentive to bring the new mobile phone to us quickly or to improve it. That sort of progress rarely occurs without a profit motive.

At best, we would now have first-generation iPhones, or new iPhones might come out once a decade. Features would be limited. The photo and video camera lobbyists surely would have stopped cameras from being part of the iPhone.

We might still be using old-fashioned adding machines. Computers might be the size of a small room, and we might be watching VHS videotapes. Instead, capitalism led us to a technological revolution that transformed communications and entertainment, creating millions of jobs. In technology, common ground cannot be disputed. Capitalism delivered more and better technology at lower prices.

The same logic applies to other industries. Consider the business of energy. People complained about energy costs and pollution for decades. We needed to develop cleaner, cheaper energy. We needed to find a healthy supply of it to reduce prices. New technologies and new exploration would be required to find this supply. What if we socialized the energy industry?

With socialized energy, government officials would have studied the issues, voted on the best course of action, then decided how to spend our tax dollars to “fix the problem.” Politics would be a big part of the process. For example, old energy sources would have lobbied against new energy sources, including contributing to politicians who opposed new energy sources.

Instead of having dozens of nimble, profit-motivated businesses risking their own money based on their own energy expertise, we would have had a government plan. With fewer brilliant, motivated minds “on the case,” our chances of success would probably have decreased. We might have seen “price controls,” which would further reduce supply, followed by rationing when government-controlled supplies dried up.

Frost Brown Todd LLC Member Rob Hudson is a Past Chair of the Northern Kentucky Chamber and a business lawyer. 2018 Independent Author of the Year Lauren Hudson is a Singletary Scholar at the University of Kentucky. Their next letter will explore common ground about freedom and healthcare.

Here’s what happened in real life, with capitalism. Hundreds of businesses and thousands of landowners ushered in a new age of energy abundance. They worked together, in capitalism, to develop new ways to explore and extract oil and natural gas through shale and hydraulic fracturing. It led to cleaner energy at lower prices, which helped drive the price of a barrel of oil from over a hundred and twenty dollars in 2011 to below fifty dollars in 2017.

Because of free-market innovations, citizens did not have to spend as much money on energy, meaning they had more for their families. With reasonable prices, citizens could travel more. People could better afford to heat their homes in winter.

Capitalism brings tangible benefits to people’s lives. And yet those benefits cannot be delivered if socialists strip motivating profits and creative opportunities out of our markets. If America’s taxes and regulations become more onerous than the countries with which we compete, our jobs and opportunities will go to business-friendly countries.

The free market energy and tech industries support millions of jobs. Capitalism, not socialism, delivered more products and better products at lower prices. More often than not, it does just that.

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