05/02/2009 05:12 am ET Updated May 25, 2011

Why the G-20 Protestors Were Astoundingly Wrong and Naïve

A little story:

In the late 1970s a farming commune in rural China was so poor that it could not even feed its own people. They were, quite literally, starving.

Finally, one night, the farmers got together in secret and made a pact that could have meant death: They decided to divvy up the commune into private plots and let each farmer farm their own land.

Remember - China was at the end of the Cultural Revolution and was still a communist country, in both theory and fact.

Within a year, that farm became the little commune that could, and was soon just about the most productive commune in all the land. Of course, the change (and success) caught the eye of Chinese Premier Deng Xiaoping and he scheduled a visit to the commune.

The farmers were terrified. Would the be shot? Sent away? What?

They were rewarded.

Deng saw the proverbial writing on the wall and blessed the privatization experiment. Within a few years, all communes in the country had been partially privatized, and before long,China took a decidedly capitalistic turn. Within a generation China became one of the world's strongest economies, drawing hundreds of millions of people out of abject poverty. In fact, it is said that China's embracing of capitalism became the greatest anti-poverty program in the history of the world. All because one small commune decided that farming their own land might offer more incentives than farming a collective farm.

The G-20 protesters have it completely backwards.

Capitalism is not the problem, capitalism is the solution. It is the entrepreneur who changes the world, who creates farms and websites and cars and green products and indoor plumbing and sushi to go.

It is the entrepreneur who sees problems and fixes them and it is capitalism that feeds the hungry and alleviates poverty.

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