Why Capitalism Shouldn’t be a Dirty Word

It seems dangerous merely daring to use the words ‘capitalism’ and ‘fair’ in the same sentence, doesn’t it? But why? Maybe it’s the pipe dream being sold to the masses – especially today’s youth – that communism will one day swoop in to solve all of our problems. Ah, yes – communism, the ideology-in-shining armour that is estimated to have killed over 110 million people over the last century.

Or perhaps it’s the anti-capitalist rhetoric thrown about by the likes of Alexandria Ocasio-Cortez and Bernie Sanders. This makes me wonder how Sanders is enjoying that third multi-million-dollar home he recently purchased, but I digress. I’m not trying to explain why ‘capitalism’ has become a dirty word, but am suggesting why we should, in fact, appreciate the C-word as opposed to resenting it.

Capitalism is – above all else – a system centred around the principle of individual liberty. This is a great shortcoming of communism and socialism, within which the state holds the vast majority of control. 

This control can take many forms, as we’ve witnessed all the way from the Soviet Union to modern-day Cuba. As famously stated by Karl Marx, a system should be fought for that advocates a shift, “from each according to his ability to each according to his need”.

In other words, one who has generated wealth should not be entitled to its benefits, which should be redistributed to others. Want to spend your hard-earned income on a nice new home for yourself and your family? Silly you! The government actually demands you give up this income for the benefit of someone you’ll likely never meet.

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Capitalism, however, strives for a system where others are not entitled to the earnings you have worked for, and vice versa. On the contrary, it incentivises work: you are not entitled to anything that you have not earned yourself, and so you must go out and create your own success at your own risk, be it through the exchange of knowledge, skills or services, and so on.

You may have heard the saying, “capitalism is based on human greed, and socialism is based on human need”. Under the former, if an entrepreneur attempts to sell goods or services that they believe you – the consumer – want, they prosper. If they are incorrect, they do not. Simple. This is a system in which individuals are encouraged to improve their own lives through the provision of goods and services that benefit others. In short, we can benefit ourselves by benefiting others. Does that sound like a concept based on greed to you?

And, finally, let’s look to socialism. The system that is allegedly “based on human need” appears not to have worked quite as well as one may hope for several self-declared socialist countries. 

Take Venezuela, which was praised among the nations of South America. With an expanding middle-class, a growing economy and a functioning democracy, its future looked promising. When Hugo Chavez promised to turn the nation into a “socialist paradise”, his regime took over industry after industry, claiming the state was more efficient than private enterprise.

And now?  Under Nicolas Maduro, freedom of the press is virtually non-existent. Basic things such as food and toilet paper are in desperately short supply and are too expensive to afford. Venezuelans queue for hours just for food, with some leaving empty-handed. I am unsure as to what “human need” Venezuela’s socialism is fulfilling here, but it is certainly not that of its own people.

I can already hear it: “Venezuela is a bad example of socialism!”; “That would never happen here in the UK!” Think about it. These ideas are always hailed as inherently good until they don’t work. Why, then, is virtually every country that claims to adopt full socialism (Venezuela, Cuba, the Soviet Union, Maoist China, North Korea) eventually reduced to a dictatorship? Has every single attempt coincidentally failed? Or does handing a huge proportion of power to the state welcome in those who wish to exploit such power?

Issues in so-called ‘socialist haven’ nations, like Denmark, regarding their socialised medicine and education are quickly being realised. Many are opting for private healthcare to avoid disastrously long waiting times. A recent fall in graduates has been the result of many students remaining in university for as long as possible to enjoy state dependency and “free” education.

Make no mistake, capitalism is not perfect (nobody is saying it is), and yet our future leaders are quick to label it as something to be completely thrown out in the name of blind progressivism. There is a fine line between a search for improvement, and outright dismissing an idea in pursuit of an alternative that has brought only instability and a reduction in freedom to all that it touches.