One of the most important issues of our time is the choice between capitalism and socialism. The cluelessness of millions of Americans about this topic is appalling and frightening. It’s appalling because the evidence that socialism leads to economic impoverishment is overwhelming. It’s frightening because if we take the socialist path, the results will be as destructive here as they have been wherever socialism has been tried.
Journalists do precious little to enlighten Americans about the disconnect between the beguiling slogans of socialist rhetoric and the baneful effects of socialism in practice.
To take one example from the mainstream press, The Christian Science Monitor has reported compassionately about the wretched conditions and consequent human suffering in Venezuela today, yet their reports assiduously avoid using the “s-word”—socialism—that is the root of the humanitarian disaster there. Instead, they use oblique terms like “mismanagement.”
By contrast, the mainstream media have no trouble writing about capitalism and its alleged shortcomings. Why this double standard? Why is it considered bad form to question socialism, while straining to find fault with capitalism—the economic system to which we owe our unprecedented prosperity—remains perennially fashionable?
Death of Capitalism
Reporters often include statements like this when commenting on capitalism: “Some of the earliest concerns about capitalism are the very ones that are salient today: that the system fuels inequality, degrades the environment, and tears the social fabric with disruptive change.”
Yes, capitalism liberates our diverse gifts, resulting in growing productivity and higher standards of living, with those market participants who have supplied the most value to their fellow man becoming richer than those who produce and supply less. By contrast, socialism results in citizens living in greater economic equality as they share depressed standards of living.
No, capitalism does not progressively degrade the environment, but pushes societies over the hump of the Kuznets curve where greater prosperity leads to cleaner environments. The socialist economies of Eastern Europe were far more polluted than the capitalist West.
Yes, capitalism is disruptive—beneficently so—replacing outmoded products and services with new ones. Socialism, on the other hand, entrenches stagnation and resists progress, as I explained in my recent article, “Jobs for All.”
When a millennial commented, “People in my generation have had a pretty profoundly negative experience with capitalism” due to “student debt burdens, high rents, and the nation’s faltering progress on things like poverty,” he misdiagnosed the cause of the problems he cited. Those economic hardships are caused primarily by government interference with free markets, not by actual free markets.
Sadly millennial Americans have never lived under real capitalism. Markets didn’t cause the cost of college to spiral upward. Billions of federal tax dollars channeled into higher education, costly government regulation of colleges, and inflationary monetary policies have done that.
High rents are most problematical in areas surrounding places where government has imposed rent controls.
Free markets were steadily reducing the poverty rate in America, but that long-term trend was interrupted when President Lyndon Johnson launched a government War on Poverty. During the half-century of the War on Poverty, the poverty rate has bounced around between 11 and 15 percent.
Power at the Top
In February, the Monitor’s Ned Temko wrote that what Democrats such as Rep. Alexandria Ocasio-Cortez (N.Y.) are proposing is “not a drive for socialism in the classic definition of the term: replacing market economics with state ownership and control.”
In the first place, Temko’s statement is disingenuous, since even Vladimir Lenin realized the total unviability of the state taking over the entire economy and instead settled for government control of the primary industries, the “commanding heights” of the economy.
No modern socialist would think of advocating textbook socialism. But anyone who reads the Green New Deal can see plainly that the Democratic socialists are proposing—à la Lenin—government control over the commanding heights of today’s economy.
Temko also charged, “Free market capitalism has ceased to work the way it used to, or ought to.” When you think about it, it’s presumptuous for a reporter to write as if he is the arbiter of how an economic system “ought” to work. It’s unarguable, though, that capitalism doesn’t work like it did in earlier generations. The reason for this is simple: Big Government won’t let it. Markets haven’t failed; they have been hindered, distorted, and suppressed.
Temko also reiterated the platitudinous fallacy about “huge economic power residing in a very few individuals and corporations at the top.” Oh, like Jeff Bezos, aka “the world’s richest man”? Bezos knew that he was no match for the political machine in the Big Apple, and so he bailed out.
If you want to complain about immense economic power residing in the hands of a small elite, take a look at Congress: Those 535 individuals, some of dubious morals and wisdom, control the flow of more than $4 trillion per year and they have the power to make life miserable for private businesses.
Contrary to the Monitor’s traditional standards, Temko’s anti-capitalist bias veered into partisanship. He accused President Donald Trump of using this year’s State of the Union address to brand “his rivals as ‘socialist’” to “conjure up powerful visions of Soviet communism or the collapse of Venezuelan socialism in voters’ minds.”
First, it’s not Trump who branded his rivals as socialists. The socialists themselves—Sen. Bernie Sanders (I-Vt.), Ocasio-Cortez, et al.—openly and enthusiastically proclaimed themselves to be socialists. Second, let’s hope fervently that the public gains accurate visions of socialism. People need to understand that the laws of economics are immutable and that if we adopt policies similar to the socialistic policies adopted in Venezuela, the results here would be quite similar.
The only cure for our society’s current widespread ignorance about the relative virtues of capitalism and socialism is a widespread, persistent, and energetic dissemination of the truth that annihilates that ignorance. Let’s hope that journalists do a better job of assisting this worthy and necessary effort.
Mark Hendrickson is an adjunct professor of economics and sociology at Grove City College. He is the author of several books, including “The Big Picture: The Science, Politics, and Economics of Climate Change.”
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.