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When President-elect Trump intervened to stop jobs at a Carrier air conditioner plant in Indianapolis from moving to Mexico, Vice President-elect Pence offered this justification: “The free market has been sorting it out, and America’s been losing.” (Not that the president’s intervention was a big win, turns out.)
Of course, one shouldn’t expect only winners when markets are sorting things out. Markets aren’t magic. Yet it’s hard to conclude that American-style capitalism hasn’t overall sorted things out pretty well for Americans. Since 1980, the US has added nearly 60 million jobs. And the CBO says middle-class incomes are up significantly, either by 28 percent or 42 percent (in real terms) depending if you are looking at income before transfers and taxes vs. after. Oh, and the United States continues to push the technological frontier. Europe would sure love to have its own tech titans such as Google and Amazon, not to mention all those tech unicorns. (By one measure, the US has nearly 100. Europe? Just 12.)
Then there’s the alternative to markets sorting things out. That would be government sorting things out. Some call that “central planning,” while others term it “picking winners and losers.” Maybe add “crony capitalism,” too, since that can be the result when government engages in “business friendly” policies such as “targeted exemptions from legislation, advantageous rules by regulatory agencies, direct subsidies, preferential tariffs, tax breaks, preferred access to credit, and protections from prosecution,” according to the 2014 working paper “Crony Capitalism, American Style.”