To paraphrase Mark Twain, the reports of capitalism’s death are greatly exaggerated. For years, we have been told support for socialism is overtaking capitalism, especially among younger generations. While there is a kernel of truth behind such statements, a recent report shows that support for the key aspects of capitalism is still strong.
In a report published by the Center for the Study of Capitalism at Wake Forest University, authors Christina Elson and Kylie King examine how well people think capitalism is working. They asked a representative sample of 1,600 Americans aged 18 and older to answer various questions about capitalism and America’s economy. They call their headline finding the Capitalism Satisfaction Barometer and it is modeled on the Net Promoter Score (NPS) methodology commonly used by marketers.
The idea is that folks who strongly support capitalism as the best economic system for America (rate it a 9 or 10) are likely to promote it, while modest supporters (7 or 8) are likely to be more neutral. Folks who give capitalism low scores (1 through 6) are labeled detractors.
The scores are aggregated to create a net score between -100 and 100, with negative scores indicating overall dissatisfaction with capitalism and positive scores signaling overall satisfaction. According to the report, the NPS for capitalism is -29, indicating modest dissatisfaction.
But wait, I said capitalism is still popular. Am I foolish? Perhaps. But a closer examination of the report beyond the NPS reveals that in this case I am right.
Though only 48% of respondents are promoters of capitalism or neutral about it, when asked whether they want the government to be more or less involved in the economy, a plurality of younger people (45% of those aged 18 – 41) want less government and more markets, while a slight majority of older folks (51% of those aged 42 and older) do. Only 31% of younger folks and 23% of older folks want more state intervention, as shown below.
So to the extent people are unhappy with capitalism in America, it is largely because they think it is not free-market enough. This is hardly an endorsement of socialism.
Additionally, a strong majority of every generation, even the younger Gen Z and Millennial generations, say they are likely to support capitalism. In fact, the youngest generation, Gen Z, expressed a stronger inclination to support capitalism than Millennials. The trend of young people souring on capitalism—if true in the first place—seems to be reversing.
Even more telling is that both older and younger respondents strongly support key characteristics of capitalism. The survey asked how important it is to allow individuals to own property, invest to earn profits, decide what to do with earned profits, change jobs, bargain for wages, and access credit for personal needs.
These are all key features of capitalism, a system of economic organization that relies on property rights and voluntary exchange. Contrast that with socialism, which emphasizes state ownership of businesses, discourages profit seeking, and relies on government officials to set wages.
As shown below, at least 80% of each age group think the key characteristics of capitalism are important. Again, this hardly seems like a rejection of capitalism. Instead, it hints that people are unsure about the definition of capitalism.
Similar-sized majorities think it is important for individuals to be able to start and own a business, decide what kind of business to create, and set prices based on supply and demand. These are all critical features of capitalism, not socialism.
Widespread support for capitalism is a good thing. As the economist Deirdre McCloskey and others have explained, capitalism at its best promotes an honorable life. Prudence, thrift, industriousness, risk-taking, cooperation, and kindness are just a few of the virtues fostered by capitalism. Capitalism empowers people to take control of their lives and rewards people for the value they create for others. Though not a perfect system, it is significantly better than the alternatives.
Some say they dislike capitalism, instead preferring some version of socialism. But when asked whether they support freer markets or more government intervention, most choose freer markets. Similarly, large majorities support the key features of capitalism, features that are inconsistent with socialism. Contrary to the naysayers, capitalism is alive and well, and we are all the better for it.