Updated Oct. 18, 2012
It is absolutely shocking to me how ignorant CC students can be. I do not have enough fingers to count the number of times I have heard “Capitalism is bad” escape from supposedly intelligent students’ mouths. There are so many problems with this uninformed statement that I decided to devote an entire article to debunking .
To clarify, when I use the term capitalism I am referring to the basic concept of free markets: private property, voluntary transactions, and minimal government intervention. This is different from corporatism, which is the result of mixing big government and capitalism. What follows is not political but rather widely accepted common sense.
When government finally took a step back and allowed a natural economic system to emerge, capitalism was born. No academic in a dark room created capitalism as they did with communism and socialism. It was natural. People could work together and specialize rather than trying to do everything alone.
Why do the vast majority of successful, educated Americans appreciate capitalism? Because capitalism has dramatically improved the standard of living for people around the world. Countries that have adapted capitalist principals have higher life expectancies, fewer infant mortalities, better education, better medicine, better food, and more comfortable homes than countries that have not. This is not rocket science.
North Korea and South Korea provide a phenomenal example of how free markets can create prosperity. Bill Gates once said, “Capitalism has worked very well. Anyone who wants to move to North Korea is welcome.”
People do not wake up and decide to work 70-hour weeks for fun. They do so to get a monetary reward and ultimately improve their and their offspring’s condition. Birth control, iPhones, Chipotle, cars, and nearly everything else valued in everyday American life was created in private hands to turn a profit. We owe all this to our capitalist system.
Rejecting capitalism inherently requires rejecting most modern comforts because these comforts would never have been created in a socialist, communist, or dictatorial system. Interestingly, from what I have seen, the anti-capitalists seem to love their capitalist products.
As with anything in life, capitalism’s wonders are accompanied by some flaws. While they are worth mentioning, these flaws do not even begin to outweigh capitalism’s benefits.
Capitalism naturally produces inequalities because, given freedom, some people will succeed and others will fail. Subsequent generations of people will find themselves “starting off” in different economic places. While this does pose social challenges, the choice remains clear: would you rather have equally sick, poor, hungry people (i.e. most countries in Africa) or unequal, but almost entirely comfortable, nourished and housed people (i.e. countries with relatively free markets)? The latter choice is a no-brainer.
Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
Another common criticism of capitalism is that it perpetuates gender inequalities and encourages a patriarchal society. Even if this critique were true I would argue that health and nutrition are far more important than gender equality.
The condition of the least fortunate in a society is a better measure of a country’s position than the range of financial inequalities. While the US may have vast wealth disparities, its “poor” are not poor by international standards. As of 2005, the international poverty line was set at $1.25 a day purchasing-power parity. In the US, the poverty line is over $31 a day. I find it disturbing that the same word is used to define both someone who is starving and someone else who does not worry about basic necessities.
The Heritage Foundation released a phenomenal study in 2011 on the true state of “poverty” in America. According to Census Bureau data, 80 percent of “poor” Americans have air conditioning, 75 percent have a car or truck, 67 percent have cable TV, 43 percent have Internet access, and 50 percent own a gaming system. Do you think poor Chinese or Russians enjoy these comforts? I think not.
Yes, poor Americans may have trouble paying the bills and I would not want to exchange lives with them, but they are by no means living an “impoverished” life. The majority of poor Americans are not scrounging for food in the meadows barefoot. In fact, by historical standards, “poor” Americans are living a luxurious life. All thanks to capitalism.
I therefore think it is necessary to realize how good we all have it here in America, not just the top 1 percent.
Yes, capitalism has some flaws. Everything and everyone does. But inequalities and gender complications should not be sufficient grounds to discard a system that has created the healthiest, happiest, and most advanced people in all of history.
Most CC students get angry when people dismiss global warming despite the plethora of evidence. These students should thus extend the same courtesy to capitalism. We live with the evidence of its success everyday.
You can say, “Capitalism has some flaws” or “Capitalism must be moderated with government regulation,” but do not say, “Capitalism is bad.” That would beignorant.