Wednesday, May 11, 2005

Million Dollar Question: Whats in it for me?

Like most of this audience, I believe that free market capitalism is the best hope for reducing poverty and raising living standards here and around the world. Adam Smith was right: Competition really works to produce better products and services for everybody. Of course, competition produces losers as well as winners, but out of this "creative destruction" as Joseph Schumpeter called it, emerge the innovators and the entrepreneurs that will carry the economy to its next level.
But apostles of Smith and Schumpeter can't sell our ideas effectively unless we make sure that most people have an opportunity to use their talents and share the benefits—not just the fortunate and well-positioned. What about the working mom with a low-wage job, no health insurance and no child care? She rightly perceives the capitalist system as a trap from which neither she nor her children have a chance to emerge. Giving her a stake in capitalism doesn't mean paying her not to work. It means increasing her incentives to stay in the labor force and her opportunities to get more education, seek a better job or start a business of her own. Our productive capitalist system can afford health insurance, child care, education opportunities, and employee stock ownership. If it doesn't provide them, average people here and around the world may wonder, "what's in this for me?"
I'm Alice Rivlin.