A new Harvard poll shows that the majority of 18- to 29-year-olds reject capitalism. Is this just the typical rebellion seen with each generation or is there something more to it?
A struggling economy has led to many millennials having trouble gaining a foothold in the workforce. Many jobs that were once entry level continue to be filled by more experienced workers laid off in the Great Recession.
However, the claim that capitalism is the source of these problems is undermined by the fact that the majority of millennials also reject socialism. With that in mind, here are five reasons millennials should rethink their views on capitalism.
Capitalism is a major source of personal and financial freedom. In a free market, anyone can change jobs at any time. They’re free to move to a new city, take a job with hours that fit their lifestyle, pursue their passions, or take on new challenges like starting a business or getting an advanced degree.
A government-run economy would likely set tight restrictions on when and where workers could work. If someone wants to change careers or move to a new location, they would likely face a lengthy application process similar to today’s immigration process.
Consumer choice is also at the foundation of capitalism. Companies in competitive markets, such as smartphone manufacturing, do what it takes to create loyal fans. Companies in monopoly-like conditions, such as cable companies, often have terrible reputations.
Without competition, there is no incentive to give consumers choices.
Innovation is driven by investment opportunities. One of the best examples is the growth of personal technology over the last 20 years.
The growth was led by entrepreneurs seeking to build their wealth. While the government has managed to push innovation in areas like energy efficiency and auto safety, it’s not likely that it could promote the same level of growth in non-essential consumer goods.
The length of TSA lines has dominated headlines in recent weeks, and local post offices, DMVs and VA hospitals have long been targets of criticism for their lack of efficiency. It’s unclear how the government could avoid similar complaints if it took over other industries.
By contrast, positive changes at the Postal Service in recent years, such as Sunday delivery, were driven by private competition from services like UPS and FedEx. This proves that capitalism increases efficiency.
Millenials are often driven by a sense of selflessness and social justice that leads them to conclude that capitalism is unfair. However, capitalism is already adapting to meet their demands.
Social giving has become a major theme for small business owners who donate a percentage of their profits to charity, hire disadvantaged workers, or take other steps to give back to the community.
Even when a business owner isn’t directly involved in charity, small businesses still have a huge impact on the community. They create local jobs, use their relationships to build partnerships with other local businesses, and have strong incentives to promote the community’s overall growth.
If millenials want to change how businesses relate to their communities, capitalism already allows them to choose to support these community-based businesses.