‘If You Can’t Beat ‘Em, Join ‘Em’ Should Be Every Critic Of Capitalism’s Personal Motto

There are obviously many problems with the American economy in particular, and with the concept of capitalism in general. We have too much wealth inequality. We don’t tax billionaires enough, and then allow them to slither through a tax system with more holes than a block of Swiss cheese. We are pretty much alone among advanced Western nations in failing to provide free or low-cost healthcare for all of our citizens.

When these sorts of issues bubble to the surface (which they do with some frequency), I try to draw some sort of attention to them, and to propose improvements. Yet, there seems to be a growing contingent out there, at least online, who would rather upend the whole system and start from scratch.

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As of late 2022, a majority of the public — 57% — said they view capitalism favorably. Though that is still a fairly strong majority, it’s down eight percentage points from 2019.

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The partisan divide is stark. Support for capitalism has declined among both Republicans and Democrats since 2019. But while Republican support only fell by four points to a still-robust 74%, support for capitalism among Democrats plummeted by nine percentage points, leaving only a 46% minority who hold a positive view of capitalism.

Although I don’t side with Republicans on much, this is a rare exception. Capitalism has proven itself to be by far the best game in town.

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Global poverty was halved between 1990 and 2010, largely thanks to capitalistic and free trade policies which enabled developing economies to grow. Lower rates of inequality did deserve some credit. As the Economist so eloquently put it, it’s important that “inequality does not widen so that the rich lap up all the cream of growth.” Still, economists who crunched the numbers credited greater equality as contributing only about a third to poverty reduction within any given country, as compared to two-thirds credit for growth.

One good illustration of the effect of expanding global capitalism comes from Swedish author Johan Norberg. According to Norberg, at the dawn of capitalism 200 years ago, only about 60 million people on the planet did not live in extreme poverty. At the dawn of the 2020s, there were more than 6.5 billion people who were not living in extreme poverty.

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Of course, numbers like these are not without controversy. Even so, it’s hard to look around the world and fail to obtain anecdotal validation for them. Problematic though some aspects of capitalism may be, I’d still take it over the capitalism-flavored kleptocracy of modern Russia or the command economy of North Korea.

Now, perhaps you’re waving your hands shouting, “What about the socialist havens of Western Europe?” Well, it doesn’t hurt to have a huge sovereign wealth fund invested, or some other type of ultimately capitalistic engine underlying your nation, to prop up your robust social safety net. A country lacking capital has nothing to invest in things like universal healthcare, education, and environmental protection.

“Capitalism” doesn’t necessarily mean “unfettered capitalism.” It doesn’t mean “irresponsible capitalism.” Capitalist societies can and should have guardrails. They can certainly mix in elements of socialism to great effect. At the end of the day, though, there’s no other system that has proven itself so effective at improving the lives of so many people.

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The growing chorus of critics against capitalism aren’t going to overturn it anytime soon. Capitalism works too well for that. The critics would be better served — and so would the rest of us — if they’d opt in instead.

In the American style of capitalism, we have lots of fairly easy ways to opt in. Even lower-income earners can get robust access to the markets with something as simple as contributing to a Roth IRA every year. The median annual salary in America was up to $54,132 in 2022. If you made the median, and could manage to save 12%, you’d hit the IRA contribution limit for 2023. All it takes is a little time, patience, and discipline.

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If you can’t beat ‘em, join ‘em. We have no evidence at present to suggest capitalism or capitalists are ultimately beatable. Should you think capitalism needs improvements, great, push for them. I guarantee you’ll be in a far stronger position to force leaders to make changes, or to become an influential leader yourself, after 20 years of wise investing.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at [email protected].

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ATL Finance, Capitalism, Finance, Finance Docket, Jonathan Wolf