Young People vs. Capitalism: A Truly Sad Development

From an article at the Foundation for Economic Education:

It’s not exactly news that capitalism has an image problem. Say the word “capitalist” and the image that comes to mind is of a rapacious, self-interested robber baron – less Steve Jobs or Warren Buffett, more Charles Montgomery Burns.

Among young people, the problem is even more severe. For the generation who came of age during the financial crisis, argues George Koopman of the Mercatus Centre in the Wall Street Journal:

    “…capitalism isn’t about free enterprise, nor is it about the startups and innovation. When they hear the term, millennials think about Wall Street bailouts, corporate greed, political scandals and tax codes riddled with loopholes for the wealthy and connected.”

This is what his article calls “mutant capitalism” – and it’s scarring the reputation of the good kind. Koopman cites a Harvard Institute of Politics survey showing that about a third of Americans aged 18-29 support socialism, while not even half back capitalism.

Most young Americans do not support capitalism, and instead support socialism. Yet most young Americans don’t necessarily understand what socialism is. They look at what we have today, e.g. the corruption of Hillary Clinton who makes money off the selling of political pull and power to politically connected Wall Street money makers, and they assume this is capitalism. They conclude that capitalism is therefore bad.

Somebody needs to tell not just young people, but Americans of all ages, what capitalism actually means. It goes like this:

Capitalism means freedom to do with your money what you please. It’s your money. Government has no right to take it away from you, any more than government has any right to take away your liberty to do what you please with your body.

Younger people are generally more idealistic than older people. This means they’re more willing to grasp abstract concepts and principles. “Give me liberty or give me death” is an example of a principle. Marx’s maxim, “From each according to his ability, to each according to his need,” is also a principle.

A cynical, jaded middle-aged or older person (not that all are) will dismiss principles — on principle — as impractical. Younger people in their teens and twenties are more open, and in this sense more virtuous, intellectually honest and rational. That’s why so many flocked to Bernie Sanders. Yes, Sanders was as wrong as could be, and in some respects more wrong than Hillary Clinton or Donald Trump at their worst. But Sanders spoke in the plain and sometimes honest language of principles. Nobody else really does this, and nobody ever does this in the name of economic freedom. Is it any wonder young people, like most Americans of all ages, are so lost when it comes to election time?

Does government have a right to select your clothing, your music, your career, your choice of friends or romantic partner? Of course not. Does government have a right to dictate your economic choices by setting limits or minimums on wages, setting ceilings on profits, taking money from your current paycheck to pay for the retirement or medical benefits of your grandparents, or by paying off other people’s bad mortgages? No, and for precisely the same reasons!

Capitalism means accepting that other people’s money belongs to them too. You would never go to one of your friends and say, “You’ve got too much money. I need help paying off my loans. You’ve got nicer things than I do. It’s only fair you give some of that to me. Give me some, or I’m calling the police right now.” You’d consider that none of your business. But this is exactly what our government does every day by “spreading the wealth around,” as Barack Obama did and as Hillary Clinton plans to do even more. And Bernie Sanders, who’s an outright socialist, wanted to do it still more.

Under capitalism, people who take risks sometimes make more money. That’s how life works. It’s better to live in a world where some do better and make more than live in a world where nobody ever gets rewarded and everyone is equally stagnant.

If they make millions or billions because of those risks, that money is theirs — not yours, and not the government’s. At the same time, under capitalism, if someone takes risks and loses money, then they take the hit. No government bailout. No subsidies. No targeted tax cuts or special, one-time relief from regulations and laws. When you see those things, it’s not capitalism. The economic term for those things is not capitalism, but economic fascism. It’s not mutant capitalism or “crony capitalism” because these things are, in no way, capitalism.

Keeping what you honestly earned and did not coerce from others is fair. At the same time, paying the loss if you make a mistake or use bad judgment is also fair. Fairness could not mean anything else!

Capitalism means being allowed to keep your money, and respecting the same right of others to do the same. You can’t demand and expect that right for yourself, including down the road when you might be richer, while denying that right for others. If you have fewer opportunities to become rich and comfortable than you otherwise would, then that can mean only one thing: You need to live in a world where there are more jobs, more inventiveness, and more opportunity to take risks while keeping the rewards that might come from taking some of those risks. What can government do for you? Step out of the way. That’s what government used to do in America, in varying degrees, and that’s why America became what we know it as today. Today, in your generation, rewards and opportunities are shrinking, and that’s no good. But socialism will not save you. Only economic freedom can. Socialism will shrink everyone’s wallet and opportunity to nearly zero. Equal, but zero. How liberating and progressive is that?

If a major candidate in this election had articulated these views, might he or she have gotten somewhere with younger voters? We’ll never know. But it’s the only argument that can or should win.