Economics: Why Capitalism Wins - Explained In 2 Charts

(Drivebycuriosity) - Capitalism gets a lot bad-mouth these days. The media is singing its dirge, socialism seems to get popular again and populist politicians like  Bernie Sanders want to fight it. But they are all wrong. Capitalism created the wealth we enjoy today and will do so in the future.

In the midst of the last century there was a gigantic experiment. Germany got split into two parts, the more or less capitalist Western Germany (Bundesrepublik Deutschland) and the communist Eastern Germany (Deutsche Demokratische Republik = DDR), another satellite of the Sovjet Union.  In the year 1990 Germany re-united. Then the Western part (and its whole population) was much wealthier than the Eastern part. Even the population of Western Berlin, which had been a capitalistic island in a socialistic ocean, was much wealthier than the residents in the former socialist Eastern Berlin. The  chart below shows that capitalism created growth, while socialism lead to economic stagnation.

And there are more examples for the superiority of capitalism. Below a chart which compares China`s economic growth (blue line ) with the growth in Taiwan (violet line) and other Asian countries.

China`s economic growth started in the late 1970s as the country began to reform and to switch slowly from a pure communist system to a partly capitalist economy (allowing private companies & stock markets, free enterprise zones, accepting billionaires). But Taiwan, which is much more capitalist than the peoples republic, grew much faster and is much richer today: Per capita income in China $16,700, in Taiwan $50,500 (cia.gov ).

Capitalism rewards and encourages private initiative, working, saving & investing,  socialism  discourages it and it backs waste.