Capitalism is under heavy fire today.
It is perfectly obvious that we are in the middle of an all-out assault on free markets. It’s coming predominantly from the Left, but not just from the Left. A large segment of the Right is very anti-free markets now.
A chart of global average GDP per capita starting in roughly 1600 through 2025 shows that people had zero GDP per capita essentially all the way through the early 19th century. And then free markets happened, catalyzing the exponential explosion of GDP per capita.
That was not because of government centralization of resources, which had been practiced throughout human history. It wasn’t because of vast thickets of bureaucratic regulations.
It came from a very simple proposition: You own your own labor and the product of your labor. You own your own innovation and the products of that innovation, and you should be free to sell, rent, or trade them.
Period.
There are now a variety of arguments being leveled against capitalism. They come down to basically two arguments in the end.
The first: Capitalism creates inequality.
You might say to yourself, “Hold up. If capitalism creates inequality, but everybody’s wealthier, isn’t that still better than the alternative?”
The answer is yes, but not according to Bernie Sanders, who wrote:
The economic system with its excessive corporate greed and concentration of ownership and power destroys anything that gets in its way of the pursuit of profits. It destroys the environment. It destroys our health. It destroys our democracy. It discards human beings without a second thought.
Says the millionaire with the lake house.
From Zohran Mamdani:
We see the wealthiest country in the history of the world, one where children go to sleep hungry while the world’s first trillionaire hungers for more. We see monopolies that dominate every industry and oligarchs who buy elections. We see masked agents terrorizing our streets, eating food cooked by our undocumented neighbors before spiriting them away in unmarked vans. We see a nation whose immense wealth has been built by those with calloused, dirt-streaked hands, those who toil on factory floors and chisel into stone. And we see a nation that has allowed so much of that wealth to be held instead in the soft hands.
It’s all about the poor versus the rich. It’s inequality, it’s cruelty, and it’s monopoly.
And of course, this is not just from Mamdani; it’s also from Tucker Carlson, who does not understand how economics works and doesn’t care to understand how economics works. He says it’s unfair that people in finance make more than wage earners.
That, of course, is putting aside the fact that people in finance are the ones who actually bear the risk, while wage earners earn a wage guaranteed by someone else.
Carlson:
So if you have a tax code, for example, just to name one example, if you have a tax code that taxes wage earners at more than twice the percentage it taxes investors, what are you saying? Well, you’re saying it’s twice as virtuous to invest money or to inherit money and keep it in the markets as it is to go to work in the morning. Really? Of course, that’s what you’re saying. Because any tax code penalizes the impious acts, the bad things, the vices. Cigarettes cost $18 a pack because we’re against smoking. So if being an ordinary wage earner, driving in from the suburbs to make 80 grand a year, if that’s taxed at twice the rate of being a private equity baron, what are we saying? That it’s twice as virtuous to be a private equity baron and to inherit money.
That’s just stupid. There are plenty of taxes that you pay that are not a tax on vice. There are taxes on property. Is it a vice to own property in the United States? There’s a tax on death. There’s an estate tax. Is it a vice to die?
The reason why capital gains are taxed at a lower rate, for example, than wages, is because they’ve mostly already been taxed.
Carlson believes that capitalism is also evil because capitalism somehow empties you of your soul, as he told the New York Times.
That’s argument one. Capitalism causes inequality.
Argument number two is that capitalism is not spiritually fulfilling. It’s not providing you your meaning in life. Carlson, 2019: “Republican leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool like a staple gun or a toaster. You’d have to be a fool to worship it. Our system was created by human beings for the benefit of human beings. We do not exist to serve markets, just the opposite. Any economic system that weakens and destroys families is not worth having. A system like that is the enemy of a healthy society.”
The idea that capitalism weakens and destroys families and undermines religion is not new. Tucker is not the only one who has said this historically. Here is a quote. Guess who said it?
The Western way of life founded, in effect, on practical and technical knowledge, discovery, invention and the flooding of world markets with mechanical products has remained incapable of offering to men’s minds a flicker of light, a ray of hope, a grain of faith, or of writing anxious persons the smallest path toward rest and tranquility. Man is not simply an instrument, among others. Naturally, he has grown tired of purely material conditions and seeks spiritual comfort. But the materialistic life of the West could only offer him as reassurance a new materialism of sin, passion, drink, women, noisy gatherings and showy attractions which he has come to enjoy.
It sounds like Tucker Carlson, but actually it is Hassan al-Banna, the founder of the Muslim Brotherhood, who called for an international armed struggle against colonial rule by Muslims and argued for full-scale jihad.
This is where we are right now: a gigantic coalition of people who despise capitalism. People who find it spiritually unfulfilling, who claim that it robs us of our individuality, or say that it is what creates inequality. They are all uniting. They are their own unique party. Everyone from communists to post-liberal integralists to quasi-fascists to radical Muslims.
Why?
Because in essence, capitalism makes two arguments. One: You are an individual created in the image of God with individual desires, wants, needs, and capabilities. Two: As long as those desires, wants, needs, and capabilities do not harm anyone else and do not violate basic morality, they ought to remain in your control.
The new red-green-brown anti-capitalist party believes that’s not true.
They believe the same thing that the French revolutionaries believed: that the collective vision of man is paramount. Private property and free markets run counter to that vision.
These folks can’t build utopia without destroying that vision. They promise Utopia, either a communist utopia with government-owned grocery stores like Zohran Mamdani, the “warmth of collectivism,” or an Islamic utopia with the Caliphate at the head, or the agrarian utopia run by kind-hearted feudal lords.
It’s all garbage. So why are people believing it?
There are a few reasons. First, ingratitude. Human life in its natural state is nasty, brutish, and short. On a material level, pretty much everything was awful for all of human history until property rights, contract law, and credit were invented and turned large swathes of the world, including places difficult to live in, into semi-bearable places for the first time ever.
Here’s the truth: Most people living in the West right now have never spent time in truly poor places that lack the things we think of as vital. When you start thinking that human life in its natural state is a microwave, a central AC, a car, two TVs, a cell phone, a furnished apartment, or a house, you start comparing yourself to what could be in a Utopia.
This is why, when you hear Gavin Newsom, a very, very wealthy man, say capitalism does not work — I don’t believe him.
People have incredibly short memories. There are a lot of other models that have been tried elsewhere and are still being tried, yet they still fail, but we keep bringing them back.
Why not try centralized government with price controls? Because we’ve done that a thousand times and it’s crap.
Why not try a religious theocracy? A lot of countries did that for several centuries, and there are still some places on Earth trying to do it, and it’s really garbage.
Why not try economic fascism with the bureaucratic government that picks winners and losers? We’ve tried that too, and it’s terrible.
We have just not yet felt the consequences of all this interventionism. We are trying a bunch of these experiments right now, and they are going to fail. We are going to crash and burn.
But when you jump from a burning building, the first few stories are fine. It’s the last one that’s a doozy.
So what should we do differently?
It may be worth conceding that a lot of young voters with a predilection for the DSA haven’t ever had a positive case made to them about capitalism; many of them have been living with the political effects of the 2008 financial crash and the stagnation of Obama and the subsequent bailout and how it was perceived by the public, and then COVID.
It’s time to teach them.