The Patriot Post® · Hating Capitalism, but Loving Free Enterprise?
Recent polling from Gallup found that Americans have a strange, counterintuitive understanding of how our economic system works.
Gallup asked a series of questions about Americans’ economic beliefs and “found 81% viewing free enterprise positively, compared with 54% for capitalism and 39% for socialism.”
As noted above, this poll immediately strikes one as rather confusing, given that capitalism is a feature of a free-market economy. Indeed, one could use free enterprise and capitalism interchangeably. The term “capitalism” has long been used to identify whether or not an economic system is a free market.
On the other end of the economic spectrum from free-market capitalism is a government-controlled economic system, or socialism, the most extreme example being communism.
Why the apparent disconnect among a significant number of Americans regarding free enterprise and capitalism? Here’s how Gallup explains it:
Overall, Americans describe both capitalism and free enterprise as systems that promote economic opportunity, growth and innovation, while perceiving that both are tainted to some degree by greed and corporate power. Yet capitalism is much more likely than free enterprise to be associated with unequal distribution of wealth.
Socialism, by contrast, is valued primarily for providing economic security and reducing inequality rather than for promoting economic performance. However, a large share of Americans cannot identify anything positive about socialism and instead associate it with economic inefficiency, excessive government control and weaker incentives to work.
There are likely several reasons for all of this. For one thing, leftists, especially at the university level, have demonized capitalism as “exploitative” of workers and minorities, while at the same time falsely framing socialism as caring, equitable, and antiracist. Millions of college graduates are indoctrinated with this view.
As for capitalism versus free enterprise, the discrepancy might also be attributed simply to the term “free.” People hear the word free and attribute it to choice; the liberty to buy whatever one desires. Furthermore, it conveys the idea of being free from manipulation — that is, no one is forcing me to purchase something I don’t need or want. It could be referencing the classic business motto, “the customer is always right,” which developed in response to the prevailing attitude of caveat emptor, or “let the buyer beware.”
Socialists may further use the term to imply a market that is “free” from corporate greed, where profits are owed to the collective rather than business owners and investors. This shows up in the negative view of capitalism as enriching only some people, exacerbating inequality.
The misconstrual could also be the false notion of a market where stuff and services are “free.” Socialist politicians love to talk about healthcare, housing, and education being a right, while obscuring the reality that someone will have to pay for these “rights.”
Meanwhile, a market free from government control, where producers and investors enjoy the profit from their labor and investments, is not always associated with capitalism. Too often, when capitalism is referenced, it is associated with cronyism, the antithesis of a free market. Therefore, if people think of cronyism when they hear capitalism, they automatically have a negative image of the only economic system proven to create and build more wealth.
When people equate capitalism to big banks and massive faceless corporations, they see cold indifference driven solely by profit motivation.
Unfortunately, too many in America’s halls of higher education fuel this negative and overly simplistic view of capitalism, urged on by a political view that sees greater government control of the nation’s economic system as more socially “fair” and beneficial and aims to confiscate and redistribute wealth.
It’s a wicked and destructive lie that has left massive human suffering in its wake wherever socialism has been tried. But that elixir of utopia still blinds people to the reality of human nature and basic economics.
Thankfully, the polling shows that a majority of Americans still understand that free-market capitalism is the best economic system out there. And despite the problems of cronyism and corruption, socialism is infinitely worse and, ironically, is plagued by cronyism and corruption significantly more than free-market capitalism, and by degrees that few Americans appreciate.