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.
Well said. What those kids do not understand about capitalism is that without it, the very socio-economic freedom to spend 4 years of their life intensely studying Chaucer because after it, their parents will just hook them up with a p.r. job somewhere.
What is your understanding of Socialism? It seems as though it’s the same as Communism which is incorrect. You fail to mention successful socialist countries in Europe – Germany, all of Scandinavia, France etc. All of these are very socialist (as in socialized healthcare and school systems etc.), yet very capitalist at the same time, giving birth to some of the most successful business in the world. And trust me, you can use your iPhone and drink Starbucks there as well. Doesn’t seem like everyone is equally poor there, distribution of wealth is much more fair and those are some of the richest countries in the world.
I love capitalism. I come from a post-communist country and God knows how much I hate Communism, through my parents who grew up in the regime. But I am a socialist, I believe healthcare is a basic human right, I believe the richer should contribute more in taxes than the poor. It seems to work.
And btw: iPhone would have no color screen without Swedish Ericsson, no integrated camera without Finnish Nokia etc. And those innovations came from socialist countries you hate so much 🙂
Scandinavia isn’t socialist or at least the reason why they have money to redistribute is because of the private companies not the goverment. Sweden was a very free market country untill the 1970s. Why is it a human right that you can force someone else to give you money for your healthcare by sending them to jail if they don’t pay.
Of course it’s because of the private companies – that is my point. Socialism and free market work together, what she labels as socialism is really just weird version of perverted communism. That’s simply not correct. Sweden is still a free market, so is Finland, Denmark, Norway, Germany, Netherlands, Belgium, Luxembourg and all these rich countries. Yet all of them provide you with free education and free healthcare. Scandinavian countries pay you, if your family is below certain income level, to go to university, as in you get few hundred euros a months. Same if you go abroad – they want you to come back so they support you with quite a bit of money, my Danish friends get up to 700 euros a months, some of my Swedish friends can afford college because of that. That is actually just crazy, if that’s not socialist, I don’t know what is.
Germany isn’t socialist. Also this blog reads like someone wanted to write something trivial and sound smart at all costs. In this context, your comment si rather suitable.
Kind of inclined to say sorry for my harsh tone, but I’m pretty sure I mean it.
We can get into definition of what each of us considers socialist. Does Germany have one state run insurance company in which all the citizens are insured since the moment they’re born, until they die? Indeed they do. Do they have pretty much exclusively public school system with free university education? Once again, yes. They are a very socialized country.
You should see the response to your article that feminist wire put on their blog, she argues against capitalism because of the shortcomings of North Korea.
it is pretty awesome.
I really don’t think you understand the difference between socialism and communism; it’s a biggie! Communism is a failed experiment in creating a classless society which completely ignores market demands. Socialism is a highly effective (yes!) economic system which is driven driven by economic and social demands, as opposed to private profit. Since it is still driven by human needs and resulting market forces, it perpetuates the free market (often assumed “capitalist”) benefits. It also takes the focus away from accruing gross economic capital, essentially decreasing the disparity between classes.
I’m not a capitalism hater. I do, however, find flaws in your arguments against alternatives. Glossing over their clear benefits undermines your case.
The image of the U.S. which says “We are the world’s 1%” is interesting. It’s somewhat true; we have more capital and material wealth than most other nations. However, do you think this is because capitalism encourages this sort of private stockpiling, or to put it in more extreme terms, selfish hoarding?
I had no control over the image used with my article. That was an editorial decision.
“The problem with socialism is that you eventually run out of other people’s money.”
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socialism is un-american
I agree with you and I know alot of young people are stupid but I’m 18 and I love capitalism it’s a huge part of what makes America the greatest I’m honestly so sick of hearing people talk about how bad capitalism is and yet when I look at the world all the capitalist countries flourish where as socialist or communist countries are struggling and the common people live in terrible conditions with large families living in tiny shacks practically starving to death and their society doesn’t progress which is ironic considering that these American socialist consider themselves “progressive”