It’s a fascinating paradox in United States that college students simultaneously hate, fear and benefit from modern capitalism. They blame problems in society on corporations, the pursuit of private property, or the horrendous “1%”.
Yet many of these Bernie Sanders supporters who text on their iPhone and drive there Prius to a nice home made possible by capitalism seem to be missing the point.
Countless days of tabling on Montana’s campuses have illustrated their confusions to me. They range from the plausible to the out right delusional. Often the end of their thought process involves a statement like: “Well my professor thinks…”
So here it is, you clearly misinformed college liberals! My list of your top five most common fallacies regarding capitalism in no particular order:
5) Capitalism promotes greed and selfishness
In a well known theory among economic circles known as the Stigler-Zwaig thesis, the authors show how private enterprise is far better for the economy than government control. They explain how economists traditionally value free enterprise except in modern politically charged college environments. Essentially greed is human nature and when property rights are fairly and legally upheld, capitalism leads to improvements for ALL parties involved.
4) Capitalism creates dangerous products if left unregulated.
This to me is similar to the arguments that “guns kill people” or waiters make people fat by up-selling food. We live in an age of intense review. These reviews become informative on products or services that are poorly manufactured or unsafe. Industries spend billions of dollars to make sure their products will not receive the internet “black list” treatment. The belief that only the government cares about product safety or quality is simply false. Furthermore, consumers must be willing to pay for better products then an incentive for poor products to be made will disappear.
3) Capitalism causes income inequality
To me this is a failing in many of their intro economics classes. Students are often taught that economics is a zero-sum game where winners make “losers” less well off in transactions. The reality is much different. A thriving economy where every player benefits from their mutual involvement is a true free-market. When government interferes with this system through protectionism, over-regulation, and other means the results often leave entry level entrepreneurs behind at the expense of corporate lobbying. It’s not the market that inherently leads to inequality — it’s frequently actions by the federal government
2) Capitalism somehow subverts liberal democracy
The late great Chicago school economist Milton Friedman noted how economic freedom and prosperity lead to political freedom and the first is a precursor to the second condition. In his well studied works he argues that throughout history economic systems like competitive capitalism have lead to a useful distinction between economic and political power. The challenge is keeping these powers separate.
1) Capitalism leaves workers alienated and despondent
Oh yes this argument again, a college read a spark-notes on Karl Marx’s Communist Manifesto and now they are an economics expert? Marx takes a very perfectionist and idealistic view of the world in his writings on “alienation as a result of capitalism”.
Work to me provides a social bond with those you work with as well as a satisfaction for the reality that even the most remedial tasks, cleaning the floor for example, serves to make the world better for those around you. We create and produce to survive and to satisfy our desires. Without a system that provides enough goods and services society suffers, as we’ve seen in each failed socialist experiment throughout history.
So there you have it! The worst fallacies I hear time and again on college campuses. But in the issue of fairness it has dawned on me that each one of these fallacies could require a further examination, even another Hypeline article. I would love to keep the dialog on this article free and open to expression so send your feedback!