How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Today's Economy

November 4, 2009

4:30pm - 6:00pm

Santa Monica


Steve Forbes



"In a crisis, usually it's the government policies that bring about the crisis, but free markets get the blame for it," publisher and former presidential candidate Steve Forbes said.
The worst recession in decades has shaken faith in our economic system — and even before the current downturn, our culture was curiously ambivalent about free markets and wealth creation. We need a full recognition of how we got here — and why capitalism truly is the best route to prosperity.

Steve Forbes continues to believe that capitalism is the world's greatest economic success story, he said at this Milken Institute Forum. Forbes, whose latest book is How Capitalism Will Save Us, said free markets are not to blame for the economic downturn.

"Right now, capitalism is under a cloud. People are blaming it for the crisis that we are facing," he said. "But the book discusses what capitalism truly is and why in a crisis usually it's the government policies that bring about the crisis, but free markets get the blame for it."

Forbes said capitalism is a benign, benevolent system, but it can't change human nature. He largely blamed the Federal Reserve's monetary policy, lax lending standards and mark-to-market accounting rules for the economic downturn.

What should the government do now? Among his recommendations:

  • "Stop beating up on the banks" and encourage them to lend, Forbes said, adding that banks have four times more cash on hand than they did a year ago.

  • Strengthen the dollar.

  • Stop financing government deficits with short-term money.

  • Remove trade barriers.

  • Lower taxes to encourage growth and innovation and "unleash the entrepreneurs."

    In the end, Forbes said, capitalism is about increasing overall wealth and giving more people the chance for a better life.

    Forbes is Chairman and CEO of Forbes Media. In addition to Forbes magazine, he is publisher of ForbesLife, ForbesLife Executive Woman and Forbes Asia. He sought the Republican presidential nomination in 1996 and 2000, running on a platform that included a flat tax, medical savings accounts, a new Social Security system for working Americans, term limits and a strong national defense. He is also the author of "Flat Tax Revolution: Using a Postcard to Abolish the IRS" and "A New Birth of Freedom."