Why I love capitalism and you should too
By William Rampe ’24, Opinion Editor
World Economic Forum for the global decline in poverty. Photo courtesy of Wikipedia.
It is common knowledge that capitalism is a dirty word on any
college campus. The concept has been associated with all the worst ills
of humanity, from the extremes of slavery and genocide to the societal
problems claimed to arise from income inequality. This association occurs not just in dorm room rants about the unjust political and economic structures governing our lives, but also in lectures, readings and discussions on classroom subjects usually tangentially related to the
topic. Thus, defenders of capitalism, of which I aim to be, are usually considered to be dolts who slept through their intro-level history, sociology, government, economics, anthropology…pretty much any social science or humanities-related class.
I am not ignorant of the most immediate source of many people’s dismay at capitalism. When they examine the current state of the U.S. economy, they see rampant inflation, a poor labor market and low economic growth — all of which they blame on capitalism, obviously. While these critiques usually merit disapproval of capitalism, it is the supposed greater crimes of capitalism that induce hatred and make being associated with it a taboo. These crimes are listed clearly in a 2022 article titled “Capitalism Kills Nearly 1 Million Americans Per Year,” which claims that deaths resulting from poor education (it does not make sense to me either), racial segregation, low social support, income inequality and poverty all fall under the umbrella of capitalism. With a record like this, who in their right mind would want to promote capitalism?
But none of this is true; capitalism has nothing to do with any of these issues. Broadly speaking, high levels of taxation, regulation and protectionism across the U.S. — and the rest of the world — have been shown to lead to the economic woes of our time. Furthermore, the societal problems of poor education and racial segregation are purely the outcome of poor public policy choices, such as bureaucratizing education and creating shortages by regulating the building of new houses (the article does not elaborate on how capitalism creates segregation, but this is my best guess at the point it is trying to make).
Regarding income inequality and poverty, the biggest mistake people make is refusing to recognize that they are natural, not artifi
cially created, phenomena. I have said enough, so I will let others make these arguments for me. Economist Michael Strain does a good job
explaining how income inequality is not an issue in the U.S. in his article “The top 1% of Americans aren’t to blame for income inequality.” He states, “In a market economy, income is earned, not distributed…If upward mobility is the goal, then we must stop treating economic success as if it were a problem rather than something worth celebrating.”
To add to Strain’s point, wealth can be grown in a capitalist
economy, meaning that a heavy concentration of wealth at the very top does not make those at the bottom worse off. In fact, the productive achievements of those at the top make the lives of those at the bottom instrumentally better. If you have any doubts, just order
a package from Amazon or play a mobile game on your iPhone.
The idea that capitalism causes poverty is even more laughable than the income inequality argument because capitalism leads to less poverty everywhere it is implemented. Argentinian President Javier Milei explained this point when addressing the World Economic Forum: “Now, when we study GDP per capita from the year 1800 to the present day, what we observe is that, after the Industrial Revolution, the world’s GDP per capita multiplied by more than 15 times, generating an explosion of wealth that lifted 90 percent of the world’s population out of poverty.” He continues, “The conclusion is obvious: far from being the cause of our problems, free enterprise capitalism as an economic system is the only tool we have to end hunger, poverty, and destitution across the planet. The empirical evidence is unquestionable.”
You will be hard-pressed to find a better defense of capitalism than this speech from Milei, especially among elected officials. While critics of capitalism will surely have contentions with this article and feel that I have not engaged with all anti-capitalist arguments or given them the focus they deserve, I hope that it can provide a benchmark to those unaware of pro-capitalist arguments and hopefully act as a springboard for one to research these questions further. In closing, there are many issues we face, but capitalism is not one. Usually, it is one of the solutions.
