fundamentals

By midday every Saturday, the mile-long main drag of Abu Gosh – an Arab village twelve miles west of Jerusalem – is jammed with hundreds of Israeli cars. Abu Gosh’s restaurants, shops and markets are crowded with Israeli families who made it a tradition to eat and shop here when Jerusalem’s Jewish shops are closed for the Sabbath. Even today, when incited Arab mobs are attacking Jewish neighborhoods fifteen minutes drive away from here, this peaceful tradition persists; nor can you discern any tension here, except for that of scurrying waiters and busy cashiers servicing the many customers.

Capitalism created, undoubtedly, the most momentous advances in human welfare in the last millennium. In less than three centuries, it has extended and enriched human life to a greater extent than in the former ten millennia. Liberating masses of people from slaving for mere survival, it has provided many with unimagined wealth and with the potential to do both good and evil on an unprecedented scale.

Like all spontaneous human creations, capitalism was a protracted, complex incremental, perhaps unique, process. It was propelled after 1750 by gains in knowledge, especially in technology. Yet, while both were necessary prerequisites, they were not sufficient by themselves. China, Greece and the Islamic world all excelled in them, yet failed to create sustained economic growth.