Making the Case for Capitalism in 2022 and Beyond
Do you know the definition of insanity? It’s doing the same thing over and over again and expecting different results. Sadly, this is precisely what socialists are trying to do.
Without exception, every socialist experiment throughout the world has failed over the past century. (And, in most cases, the failure is swift, messy, and disastrous.) Author Kristian Niemietz says it best in the title of his book, Socialism: The Failed Idea That Never Dies.
Socialism is, factually, a deeply flawed and failed idea. Yet it continues to be hailed as the savior. Even worse, it’s juxtaposed against capitalism as a superior alternative. (Despite the fact that capitalism has proved to be, without question, the most successful economic system in world history.)
It’s sad that we have to make a case for capitalism in 2022. Greedy, power-hungry politicians on the Left can’t seem to let the idea of socialism die. And if they have any say in it, they’ll let socialism run this country into the ground once and for all. It’s up to those of us with half a brain to continually shut them down and support the economic engine that’s turned America into the most powerful country in the modern world.
Laying the Groundwork
It seems as if basic economics is no longer taught in school. So before we dig into the meat of this debate, let’s make sure we’re crystal clear on what we mean by terms like capitalism and socialism.
What is Capitalism? According to ThoughtCo., “Capitalism is an economic system under which the means of production are privately owned. Production and consumer prices are based on a free-market system of supply and demand.”
What is Socialism? Socialism is basically the opposite of capitalism. As ThoughtCo. puts it: “Socialism is an economic and political system under which the means of production are publicly owned. Production and consumer prices are controlled by the government to best meet the needs of the people.”
Truth to be told, most casual supporters of socialism have no idea what these two economic systems actually stand for. They get swept up in fiery campaign speeches and make irrational voting decisions based on lofty promises that are impossible to fulfill. Knowing the definition of each of these economic frameworks gives you the ability to think critically and logically.
The Power of Capitalism
Capitalism is often framed as a system that only benefits a few, but that’s unequivocally false. Here are several of the reasons capitalism is so effective (and why we should take it more seriously than ever before).
- The United States is the Most Prosperous Nation in the World
Here we are, nearly a quarter of the way into the 21st century, and the United States continues to be the most prosperous and free country in the world. It sits atop almost every independent economic index, which is real-world proof that capitalism (executed well) thrives.
The only taste of serious socialism that we’ve had over the last 10 years proved to be a massive failure. (We’re talking about the Affordable Care Act, which led the average U.S. household to spend $11,172 on healthcare in 2019.)
- Capitalism Benefits All
Detractors like to throw names at capitalism. They often call it racist or sexist. They say it only benefits the rich while zapping resources from the poor. However, the data simply does not support this notion.
“From 2013-2018, the five metropolitan areas with the largest black population -- New York, Atlanta, Chicago, Dallas, and Washington, D.C. -- saw black median household income increase significantly from rates of 7 percent in Washington, D.C., to 21 percent in Atlanta. In 2019, blacks maintained their lowest unemployment rate ever of 5.5 percent. The jobless rate for Hispanics hit a record low of 3.9 percent,” Heritage.org mentions.
On top of that, there are now 11.6 million women-owned firms in the U.S. That represents 39 percent of all private businesses, a figure no other country in the world comes close to matching.
Are there inequalities and injustices in America? Absolutely. But is capitalism to blame? The answer is no. And, in most cases, capitalism actually helps to combat injustice by giving everyone equal opportunities to pursue entrepreneurship.
- Capitalism Encourages Entrepreneurship
Speaking of entrepreneurship, nothing encourages innovation and creativity quite like the framework of capitalism. It gives people the incentive needed to create things of value.
Do you think Jeff Bezos would have created Amazon if it weren’t for the allure of financial benefit? Would Elon Musk have been as serious about creating electric vehicles if he wasn’t able to benefit economically?
And here’s the best part: You don’t have to launch some newfangled idea or come up with a product that nobody has ever seen before. There are plenty of opportunities for everyday folks to thrive in a capitalistic society. For example, you can invest in rental real estate and generate thousands of dollars of additional income every year. Or you can start a side hustle and join the burgeoning gig economy. The options are limitless!
- Capitalism Provides More Options in the Marketplace
From a consumer point of view, capitalism offers more options and diversity of products than capitalism. Instead of there being one brand of hardware store, there are dozens. And instead of two banks, there’s a whole economic ecosystem of dozens of banks and financial partners. So not only is there opportunity for business owners but there’s more diversity in product selection for consumers.
- Capitalism Incentivizes
Under socialism, there’s no incentive to create anything. When property is created and owned by the state, there’s simply no reason to put forth the effort.
“By failing to emphasize incentives, socialism is a theory inconsistent with human nature and is therefore doomed to fail,” economist Mark J. Perry writes. “Socialism is based on the theory that incentives don’t matter!”
In real life, people respond to incentives. And if you want people to innovate and create, there must be rewards attached to the effort.
Socialism: The Greatest Threat to American Democracy
Russian cyber threats are not the greatest risk to American democracy. Neither is global warming or a serious energy crisis. Police brutality, North Korea, nor illegal immigration will not be the downfall of the United States.
Truth be told, there’s only one thing that can totally unhinge this nation in one fell swoop, and that’s a shift from capitalistic principles to the failed experiment of socialism. The only way to prevent it from happening is to keep socialist leaders out of power with smart and researched voting habits. It’s up to you to do your part!
Image: National Archive