Eliminating Capitalists is a Nightmare for the Poor

Xuefeng

February 16, 2022

This may seem like a paradox. How can eliminating capitalists be a nightmare for the poor? Without capitalists, there would be no one to exploit the poor, and the poor should get richer. So why, instead, would they become poorer?

Let’s begin with a theoretical deduction, followed by some factual examples.

Imagine a remote village with 100 impoverished residents, barely surviving on insufficient food and clothing. Suddenly, a capitalist from abroad arrives and builds a food processing factory. He encourages the villagers to plant apple trees, buys their apples, and processes them into apple cider vinegar to sell for profit. He also hires 10 local workers and pays them wages. This way, many villagers who plant apple trees gain a stable income, and the 10 factory workers have secure jobs. Gradually, the local economy picks up. Those with a bit of money start spending, and small businesses spring up around the factory—a restaurant, a barber shop, a tailor, and a grocery store. The village economy begins to thrive, attracting outsiders: girls come to marry local boys, some open repair shops, others build a school. Little by little, the place becomes livelier and more prosperous. Roads are built, buildings go up, a bank opens. The poor are no longer poor.

Later, the villagers discover that the capitalist lives in a luxury villa abroad, flies first class, and drives an expensive car. They become envious. "Why does he get to drive a fancy car while we’re still riding tractors? We work ourselves to the bone to afford a 60-square-meter apartment, and he lives in a mansion! This capitalist must have gotten rich by exploiting us! He has been living off the blood of us working people! The villagers decide, "We must seize his wealth and drive him out of our village!"

So, the capitalist is forced to leave, and the villagers celebrate. But soon, they realize the factory has shut down, their apples can’t be sold, and the small businesses around the factory start closing one by one. The village’s economy sinks into decline. Girls from outside stop coming, and even local girls don’t want to stay—they leave too. Incomes disappear, many men can’t find partners, and they can no longer afford utilities for their apartments. Within a few years, the village returns to its original state of poverty.

This theoretical deduction shows that eliminating capitalists doesn’t improve the lives of the poor.

Now let’s look at a few real-world examples. I’ll mention them briefly; you can find the details online.

Argentina: Once ranked among the world’s top ten economies, it was hailed as a rising second America. Europeans envied Argentina, saying, “You’re as rich as an Argentine!” Many Europeans immigrated there. But over time, Argentina declined, and now 40% of its population lives in poverty.

Venezuela: Once the wealthiest country in Latin America, famous for its "black gold" (oil), Venezuela was an early middle-income nation. Today, over two million Venezuelans have fled their country, and it has become impoverished.

Zimbabwe: Once the "breadbasket of Southern Africa," the cradle of civilization in Southern Africa and a tourist hotspot, it is now one of the poorest countries in the world.

What caused these three nations to fall from paradise into misery? The root cause was the elimination of capitalists.

Compare this to South Korea and North Korea, or West Germany and East Germany. South Korea and West Germany kept their capitalists, so they prospered. North Korea and East Germany eliminated capitalists, so they remained poor.

Both theoretical deductions and harsh realities show that eliminating capitalists won’t change the poverty of the poor. If the poor want to become wealthy, they must embrace capitalists.

Now, let’s assume you’re poor, and before a capitalist arrived, your annual income was $10,000. After the capitalist comes, your income rises to $100,000. Is it better to have the capitalist or not?

As a poor person, if you benefit from having a capitalist around, why drive him away or eliminate him? Why worry about how the capitalist enjoys his wealth? He’s not a saint. If he works hard and lives lavishly, isn’t that only natural? His enjoyment is his own business. The poor should focus on their own gains. As long as your life is improving, why be jealous of the capitalist's wealth?

The conclusion is this: the poor’s path to prosperity lies in embracing capitalists, not eliminating them.

Some may say, "I’ll rely on the government."

Are you foolish? The government is a consumer of wealth, not a creator of it. Relying on consumers to increase your wealth is like relying on thieves to make you rich.