Why capitalism is and will continue to be the best economic systemNathaniel Beach April 12, 2019 0 COMMENTS
On college campuses today, it seems almost second nature to read the Communist Manifesto by Karl Marx in a philosophy class, or sit in an intro political science class and listen to the merits of socialism from professors who try very little to hide their true political beliefs within the classroom. As a college student, there has been little discussion on capitalism, with a few philosophical texts being used from Adam Smith.
With this lack of instruction on capitalism, it makes socialism and other forms of economic structures to appear extremely appealing to young students, hungry for knowledge, when it’s the only thing being taught. However, no matter what is said in class, no matter how many students in Che Guevara t-shirts come up trying to convince you that socialism is what the United States should start adopting, capitalism will always be the economic system that works. Capitalism is the only sustainable economic system, and it’s because of this that have allowed for the United States to continue being a world leader in capitalist economies, despite the fight to socialize the nation.
So why does capitalism work? Capitalism works because of its primary purpose – to have a free economy. We pride ourselves as Americans as being the land of the free. The United States Constitution is in place to ensure this stays true. The most basic freedom is the freedom to make choices. Capitalism promotes choice. It promotes the ability of people to decide what they want to buy, how much they want to buy, where they want to live, where they want to work, and so on. With other economic forms such as socialism, choices are limited. The government decides, for example, what kind of healthcare is available and doesn’t allow for the people to decide on their own what they want.
In addition to this, the reason capitalism has and will work for hundreds of years is because it is sustained solely on the idea of consent. In order to make a purchase, the buyer and the seller must agree on a price. The buyer must consent to the seller’s price and the seller must consent to to the buyer’s demand. For example, if a car dealership is selling cars at too high of a price, buyer’s won’t consent to purchase these cars and will look for cheaper options. But if buyers see that the cars are being sold at a price they can agree with, that the seller’s determine can still give them profit, they’ll make the purchase. Meanwhile, in other economic systems, the government has a say in the price of goods and services, which takes away the consent out of purchases. This at its very core, is immoral to do. If the people are truly free, as democratic Western societies like to think, then eliminating or at the very least limiting consent is completely contradictory to that.
So where does this consent come from? What if the vendor just wants to have high prices to force the buyer’s to pay too high of a price for goods? Well this is nearly impossible in a capitalist society. The reason consent is the basis of capitalism is due to competition. Unlike any other form of economy, capitalism works because of competition. In a capitalist society, there are numerous vendors selling products to the people. Because of this, vendors try to innovate and create better and unique goods to draw consumers in, while lowering the price to undercut one another. This creates low prices for consumers and better goods and services. The same can’t be said in state-run economies.
One of the biggest complaints statists have towards capitalism and the trigger-words that get thrown around by Democratic politicians and within college classes is that capitalism leads to a wealth-gap and hurts the poor of a nation. However, this is incredibly backwards because capitalism has done nothing but raise the standard of living and help the poor out of relative poverty. For example, the number of people living in poverty today is nearly half of what it was in 1990. The biggest contributors to this are China and India after they started opening up their markets and becoming more capitalistic.
Ultimately, capitalism is what allows for Americans to thrive. The clothes you are wearing is the result of capitalism. The internet or newspaper you are using to read this article is the result of capitalism. Capitalism is what allows for us to live our lives. It strives to better the people, it strives to help, it strives to sustain itself.
Nathaniel Beach ‘20 is a PPE major from Columbus, Ohio.