by Jordan Roberts
Director of Government Affairs, John Locke Foundation
Academically acclaimed publication outlet Teen Vogue tweeted a link to an article last night titled “Everything you need to know about capitalism” with the comment on the tweet reading “Can’t #endpoverty without ending capitalism!” Some of the contents of the article are just as shocking and shortsighted as the comment on the tweet itself:
CNN recently reported that 66% of people between the ages of 21 and 32 have nothing saved for retirement. However, according to Salon, the reason many millennials haven’t been investing in mutual funds or building up their own financial nest eggs isn’t because they’re too broke, or that they lack personal responsibility — it’s because they think our current economic system, capitalism, will cease to exist by the time they are in their 60s.
As a 24-year-old who just entered the workforce full time, it pains me to reveal that the first sentence of the excerpt above is true. Many of my peers have no plan to save for the future nor do they have a backup plan in case of an emergency. However, this is the first time I have heard that the reason many of my peers don’t want to save any money is that they are banking on the possibility that some mystical government order will sweep in once we are close to retirement and provide ailment to all financial woes. Interesting.
What does it mean to be capitalist?
Individual capitalists are typically wealthy people who have a large amount of capital (money or other financial assets) invested in business, and who benefit from the system of capitalism by making increased profits and thereby adding to their wealth. A capitalist nation is dominated by the free market, which is an economic system in which both prices and production are dictated by corporations and private companies in competition with one another, and places a heavy focus on private property, economic growth, freedom of choice, and limited government intervention. Generally, those to the right of the political spectrum tend to be pro-capitalist; those on the left veer toward anti-capitalism.
A heavy focus on “private property, economic growth, freedom of choice, and limited government intervention.” — Oh, the horror. It continues:
The kind of impact that capitalism has on your life depends on whether you’re a worker or a boss. For someone who owns a company and employs other workers, capitalism may make sense: The more profits your company brings in, the more resources you have to share with your workers, which theoretically improves everyone’s standard of living. It’s all based on the principle of supply and demand, and in capitalism, consumption is king. The problem is that many capitalist bosses aren’t great at sharing the wealth, which is why one of the major critiques of capitalism is that it is a huge driver of inequality, both social and economic.
Capitalism takes the position that “greed is good,” which its supporters say is a positive thing — greed drives profits and profits drive innovation and product development, which means there are more choices available for those who can afford them. Its opponents say that capitalism is, by nature, exploitative, and leads to a brutally divided society that tramples the working classes in favor of fattening the rich’s wallets. For an example in recent history, the Occupy Wall Street movement began as an anti-capitalist protest against “the 1%” — the richest of the rich of the capitalist class — and asked why they are allowed to grow fat and happy while 20% of all American children live in poverty.
While the section above includes all of the classic critiques of capitalism, it is by no means any less disappointing. The Teen Vogue twitter account has over 3.4 million followers and no doubt many of them have no historical context in which to evaluate our current capitalist system. For those individuals, I recommend any reading about the outcomes of the Soviet Union or China under Mao or one of my personal favorite books — Basic Economics by Thomas Sowell.