Gingrich defends free market system

By Gianluca D’Elia 

Former Speaker of the U.S. House of Representatives Newt Gingrich spoke to a packed Student Recreation Center on the virtues of free markets and answered questions on March 23 as part of the Hennessy Family Lecture Series on Capitalism, which was initiated last year with an appearance by author Dinesh D’Souza.

In 1994, Gingrich wrote the “Contract with America,” and, that same year, helped Republicans gain a majority in the House for the first time in 40 years in a congressional election. Gingrich was also one of the contenders to be President Donald Trump’s running mate in the 2016 election.

“On most campuses right now, it’s such an uphill struggle to get people to think in reality about how the world works,” Gingrich said. “Most campuses are now dominated by fantasies about the world that would be nice, if only it could exist.”

To say that capitalism does not work is a “denial of everything we know,” Gingrich said. “It would be like flying on a 747 from New York to Tokyo and debating whether the Wright brothers succeeded.

“In the last 30 years, more people have entered the middle class worldwide than in all of previous human history, especially in China and India, because it turns out that capitalism works,” Gingrich said, recalling that in 1979, when the Chinese Communist Party was on the verge of collapse, transitioning to capitalism led to economic growth.

“People like to succeed at a personal level — that is, they like getting richer, and they like having personal choices,” Gingrich said. “What market capitalism did is, it made it possible for anyone to go out and be productive.”

Gingrich referred to economist and philosopher Adam Smith’s 1776 concept of the “invisible hand” to help explain why capitalism works.

“If you do what works for you, you will begin to exchange signals,” he explained. “You learn what kind of restaurant you should have down the street by whether people stop. If people stop, it’s the right restaurant. And all this is invisible. It’s not controlled. It’s happening because different individuals are making decisions. That was at the heart of what [Smith] was trying to describe.”

Emphasizing the freedom to succeed that he said capitalism provides, Gingrich told students, “It is universally true worldwide that people who believe they will gain ground through their effort, put in more effort, and people who believe they won’t, put in less effort.”

Students had mixed reactions to the speech. Some supported the insight Gingrich provided from his years of experience in Congress, but others expressed skepticism about whether capitalism truly works for the U.S.

“I think a lot of what [Gingrich] talked about oversimplified systematic institutions that are in our economy,” said senior arts administration major Nicole Dvorin. “It isn’t always a free market because we have systemized racism, sexism, homophobia — and I found that those things got overlooked.”

College Republicans President Alex Solomon said Gingrich’s speech was important because of capitalism’s success in the U.S.

“I was more than happy to be able to take the points he spoke of and strengthen my arguments for freer markets in the United States and to hear his great examples of how socialism has failed around the world. Democrat or Republican, America is a capitalist society, and that should never be up for debate.”

“I have very little expertise on capitalism, so Gingrich’s take on capitalism from his years of experience was relatively informative,” said Naomi Jainarine, a junior marine science major. “No matter what side of the political spectrum you fall on, I think it’s important to understand the reasoning of those whose views may oppose your own. Respectfully listening with an open mind effectively allows you to have a more holistic stance in politics. Hearing Newt Gingrich speak did just that for those listening.”

Gingrich said that how well a system works comes down to who can make decisions.

“The essence of bureaucratic government is to do things you wouldn’t do to yourself, and walking off as they collapse,” Gingrich said. “But what do markets do? They let you decide. When you’re young, you may decide to live in a small apartment because you’re just getting started. It’s your choice. The markets put power in your hands.

“Based on results, no system in all of human history has created as much wealth for as many people and given them as many choices and as much freedom as capitalism and free markets.”