Mark Ruffalo, the actor best known for playing a green monster in the Marvel films (“Hulk Smash!”), believes America needs an “economic revolution” because capitalism is “killing us.”
Ruffalo shared with his 6.3 million Twitter followers a Time Magazine cover story, titled, “How America’s Elites Lost Their Grip,” written by editor-at-large Anand Giridharadas, who suggested that capitalism is damaged goods and on its way out.
Giridharadas, a former New York Times reporter, opens his article with a colorful anecdote about Lawrence Reed giving a toast at the 2003 wedding of Joseph P. Overton, the man who developed the idea of the Overton “Window,” which says there is a limited range of political ideas palatable to the public. (Disclosure: Reed is president emeritus of the organization I work for.) Giridharadas invokes Overton to point out that collectivist ideas, long taboo in American politics, are now mainstream.
If American history is a class struggle, the capitalists (or plutes, as Giridharadas calls them) are finally losing, he writes. Membership in the Democratic Socialists of America has increased tenfold. Sens. Bernie Sanders (Vt.) and Elizabeth Warren (Mass.) are serious presidential contenders. Even on the right, Giridharadas points out, capitalism is under fire. Indeed, the anti-capitalist drumbeat is seemingly everywhere.
“Capitalism is in crisis – and business leaders know it,” CNBC’s John Harwood reports.
“Capitalism Is Failing Workers,” says The Guardian.
“Can American Capitalism Survive?” asks The American Conservative.
“Capitalism is dead,” says Salesforce Chairman Marc Benioff (who made billions through capitalism).
Giridharadas’s article makes good reading. Yet a closer look reveals reports of capitalism’s demise are dead wrong.
In the context of history, capitalism is still taking its victory lap. The collapse of the Berlin Wall seems like ancient history, but it’s actually barely a generation old. The 20th century was in a sense the largest social experiment ever conducted. The theories of Marx were tested. They failed horribly.
The Soviet Union, a vast socialist empire with copious natural resources, couldn’t feed itself. China, the second most famous socialist experiment, killed tens of millions in the Great Famine. Only through mass privatization has China lifted hundreds of millions out of extreme poverty. All around the world, nations have stripped Marxist language from constitutions. Today, fewer than a dozen economies are considered “socialist,” and most of those are actually mixed economies.
Hegel observed that the primary lesson of history is that people and governments don’t learn from it. But sometimes we do. For all the chatter of socialism, no one is talking about instituting a command economy to copy the North Koreans. The reason is obvious. For all the trendy resentment toward capitalism, the prosperity it has produced is undeniable. In the last 200 years, a period that saw capitalism spread across the globe, world GDP increased from $1.2 trillion to more than $100 trillion.
If you think only Jeff Bezos, Bill Gates, and the uber-rich benefited, you’re mistaken. Data show that the number of people living in extreme poverty plunged. In 1820, 90 percent of the population lived in extreme poverty. Today it’s closer to 10 percent, a figure few would have believed possible a generation ago.Economic historian Deirdre McCloskey explained the simple formula behind the genesis of this wealth.
“In a word, it was liberalism, in the free-market European sense,” McCloskey observed in The New York Times. “Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.”
The debate between socialism and capitalism — between a command economy and a free or mixed economy — is over. Even Warren concedes that.
“I am a capitalist. Come on. I believe in markets,” Warren told CNBC. “They are what make us rich, they are what create opportunity.”
Transferism vs. Socialism
When people rail against capitalism, they’re actually simply calling for more wealth redistribution. America might be insanely wealthy — the poorest 20 percent are wealthier than most Europeans — but most aren’t millionaires like Ruffalo, who has done rather well under capitalism.
It’s tempting to think that if we just take the wealth capitalism generates and let politicians allocate it, we’ll be better off. There’s reason to be skeptical, however.
The federal government’s track record on this front is dubious despite years of practice. As economist Antony Davies and James Harrigan recently pointed out, almost 70 percent of what the federal government does involves simply taking money from one set of people and giving it to another. It has done little to nothing to mitigate income inequality, which continues to grow.
Government’s track record in inflicting harm is more clear. Rent control and wage and price controls may not be Das Kapital-style socialism but that doesn’t mean they’re harmless. We’ve seen again and again that seemingly benign “democratic socialism” can create misery (Greece) or slip into socialist hell (Venezuela).
Reasonable people can disagree on whether wealth transfers are helpful or dangerous. Just remember that the source of this wealth is indisputable: it’s market capitalism.
Jonathan Miltimore (@Miltimore79) is managing editor of the Foundation for Economic Education. An alumni of the Institute for Humane Studies journalism program, he formerly was a reporter for the Panama City News Herald, senior editor of the History Channel magazine, and served in the speechwriting department for President George W. Bush.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.