Well, if we are trying to have a semi-intelligent conversation, then it absolutely does matter that we use terms as they are usually defined. “Shortage” means a lack of supply. It means empty shelves in stores. It does not mean a lack of purchasing power or a disparity in income. That is a different problem.

Socialism tends to create shortages. The government decrees the price of bread will be a penny a loaf. That way everyone will be able to afford one. Great idea. Only suddenly the shelves are empty. The socialist pricing has created a shortage under the usual definition of shortage. Sometimes the socialist planned economy does generate surplus supply, usually of goods no one wants. The shelves are overflowing with size 18 sandals made from old tires. The workers get paid to produce them, the factory meets its quota, and everyone is happy. But every consumer has too many already. You can’t give them away.

In contrast, free markets, though prone to cycles, are extremely good at generating an adequate supply of goods that people want and will pay for. The market clearing price provides a signal to producers to ramp up production or close down the factory.

The historical record is clear: the capitalist free-market system has brought a vastly improved standard of living to the mass of humanity and supported a large increase in the population. It has lifted millions out of poverty and given them the opportunity to consume goods and services their ancestors could have scarcely imagined. The system is unexcelled at encouraging innovation. The system does have problems. Very successful competitors drive out rivals and try to establish monopolies, jack up prices, and stifle innovation. Hence the need for anti-trust laws. Another problem is that there may not be jobs for everyone. Others may have jobs but don’t earn enough to eat and keep a roof over their heads. Hence the need for Food Stamps, WIC, housing grants, and other social safety net supports.

Recently, the US has been doing quite well. The number of people in poverty has plummeted, unemployment at 3.6% is at a 70 year low, GDP is over 3.0%, Black and Hispanic unemployment is the lowest since they began keeping stats, employment is at an all time high, household real income is finally rising, and inflation is nowhere to be seen.

https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/bls-hr-jobs-unemployment-april-2019.aspx

https://www.bea.gov/data/gdp/gross-domestic-product

Yes there are lots of problems such as crime, crumbling infrastructure, and homelessness. But we’ve had these before and they will continue to trouble us. Utopia is not at hand. Still, for larger and larger portions of the population, things are getting better. That’s in no small part because the free market system can supply goods and services better than other economic systems.

Mathematician, Statistician, Businessman, and Academic. Student of history, poli sci , and the Bible.

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