One of the most commonly heard complaints today—especially among young people—is that “capitalism doesn’t work anymore.” News flash: Capitalism isn’t supposed to “work” for anyone. Capitalism is not a benevolent uncle who guarantees everyone a house, a new car, two vacations a year, and dining out a couple of times a week. It is not a government program or a promise of prosperity.
Not a single politician has made the point that capitalism is just a subcategory of freedom. Specifically, it is economic freedom. It means individuals are free to produce, buy, sell, invest, save, negotiate, succeed, and fail without asking permission from politicians. It does not guarantee that people will make intelligent choices, but it gives people the opportunity to make intelligent choices.
It’s up to the individual to take advantage of this opportunity—an opportunity that is not available to people in authoritarian countries, especially socialist or communist countries. Unfortunately, millions of young Americans have been taught precisely the opposite. From kindergarten through college, they are encouraged to believe that society owes them a comfortable lifestyle. By the time they graduate, they assume they are entitled to a hefty salary, new home, late-model car, and yearly vacations in the Caribbean.
It’s only a matter of time, however, until reality arrives—without even bothering to knock. Newly minted college graduates discover that a degree in revolutionary grievance studies does not command the same salary as expertise in engineering, medicine, accounting, or computer science. To their dismay, they discover that employers pay people according to the value they provide, not the number of years they spent being indoctrinated by left-wing professors.
All this causes the disappointed college graduate to be angry. He cannot afford a house, his car is eight years old, and Caribbean islands exist only on his computer screen. To make matters worse, he is facing long years of income-stifling student-loan payments.
His angry conclusion is that capitalism has failed him. He is told that his enemies are billionaires like Elon Musk, Jeff Bezos, and Jensen Huang, and that the only solution is to strip them of their wealth. What a brilliant idea: My problems will be solved if we can just destroy the guys who have the audacity to create millions of jobs and produce products and services that people actually want.
The reality is that capitalism did not fail the angry college graduate. In fact, capitalism does not even know he exists. The marketplace is impersonal. It does not care about your race, your resentments, your political beliefs, or the framed diploma hanging on your wall. It asks only one question: What value can you offer others? If the answer is “not much,” the rewards will likely be modest. If the answer is “a great deal,” the rewards can be enormous. That’s not harshness; it’s just reality.
Capitalism rewards people who identify what others want and provide it at a price they are willing to pay. Sometimes that requires long hours. Sometimes it requires years of training, repeated failure, and delayed gratification. Sometimes a person does everything right and still loses, because freedom includes the freedom to fail. But it also includes the freedom to try again, and that is perhaps the greatest thing about capitalism.
Republicans should be explaining all this to midterm voters. Instead, too many of them mimic Democrats by promising to “make life more affordable” by getting prices down. Sorry, but prices don’t retreat simply because a politician demands it of them. It may sound comforting at a campaign rally, but it’s not real life.
The price of a particular product can fall when supply substantially exceeds demand, when technology reduces production costs, or when competition becomes more intense. But politicians cannot wave a magic wand and restore the purchasing power the dollar had 10 or 20 years ago.
Inflation is not a mysterious disease that drifts in from outer space. It is the predictable result of government expanding the money supply and credit faster than the production of goods and services. When government spends beyond its means, floods the economy with fiat currency, and borrows trillions of dollars, higher prices are a natural result and they become embedded in the system.
Politicians, of course, prefer to blame “greedy” corporations for higher prices, because greed is the perfect political villain. Why? Because it distracts voters from focusing on Washington’s reckless spending addiction. The uncomfortable truth is that runaway spending is bipartisan. Both parties borrow from future generations, and both refuse to seriously address the problem.
That is why promises to reduce prices should be viewed with skepticism. No major political party appears willing to confront the spending problem honestly, because honesty would require telling voters that government cannot provide unlimited benefits without massive borrowing, which in turn causes both interest rates and prices to rise.
Under capitalism, you are free to learn a useful skill, free to start a business, free to change careers, free to save money, free to make investments, free to produce a product or service that you believe people want. You are also free to waste your time, accumulate debt, major in an economically worthless subject, and complain that successful people are the cause of your problems.
Freedom does not eliminate bad consequences, but it does make good consequences possible. Capitalism has not stopped “working.” It is doing exactly what it has always done: rewarding value, exposing bad decisions, and refusing to guarantee equal results. The question is not whether capitalism works for you. The real question is whether you are willing to work within the capitalist system to achieve success.
Republican support of capitalism versus Democrat support of socialism (i.e., communism) is the overriding message that President Trump and Republicans should share with voters in the midterm homestretch rather than trying to convince them that the “affordability crisis” is under control, the price of gas will soon be “dropping like a rock,” and the economy has never been better.
Talk to voters like adults by explaining the benefits of capitalism, especially how it gives them the freedom to control their own destiny, and remind them that Democrats have promised to strip them of that freedom through their radical-left policies.
As Ronald Reagan’s Treasury Secretary Donald Regan used to say, “When all else fails, tell the truth.” Maybe I’m old fashioned, but I still believe that most people appreciate honesty and are likely to demonstrate their appreciation at the ballot box.
Copyright © 2020 Robert Ringer
ROBERT RINGER is a New York Times #1 bestselling author who has appeared on numerous national radio and television shows, including The Tonight Show, Today, The Dennis Miller Show, Good Morning America, ABC Nightline, The Charlie Rose Show, as well as Fox News and Fox Business. To sign up for a free subscription to his mind-expanding daily insights, visit www.robertringer.com.
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