I did a panel with Adam Gray and Tom Suozzi at WelcomeFest where they outlined their Promise to America, an effort to put some meat on the bones of the general idea of moderation. One of the things they say is “we are capitalist, not socialist,” which is definitely a sentiment that I agree with.
Suozzi said on the panel, very correctly, that market economies have dramatically outperformed the competition and delivered, while not perfect societies, certainly the greatest levels of material prosperity that we see anywhere on Earth.
This is all totally correct, but I think that people who know that it’s correct need to think more about why, despite its correctness, it has become so unfashionable for young people to embrace capitalism.
I think one really important reason is that if you look at what people spend money on, you know housing and health care are the two most important sectors by far. Young people consume far below-average amounts of health care, though, meaning that their consumption is really dominated by housing. A large share of the population consumes housing in the form of renting a home from themselves, so they are somewhat insulated from the ups and downs of the housing market.
But those people are mostly old.
If you’re young, your experience of the economy is dominated by the housing situation. And the housing situation in the United States is not very good. So I think for most young people “capitalism” means something like “the status quo system,” and they perceive the status quo system to be pretty bad because they are super exposed to the single most dysfunctional element of the status quo economic system.
Now, in my capacity as a lawyer for capitalism, I am happy to point out that not only is housing the most dysfunctional element of the status quo economy, butit’s also the element that is run in the least capitalistic way.