The Left’s Spending Misconception
Libertarian-minded populists unite against common enemies
Libertarian-minded populists, both leftist and conservative, have discovered that they have much in common. In recent years, for instance, they have united against censorship, medical authoritarianism, the deep state and a war-mongering establishment.
At least one lingering disagreement, however, keeps the two groups of populists at odds with one another.
Leftists see inflated prices for goods and services, bemoan the plight of the poor, and then blame capitalism.
Conservatives, on the other hand, see those same inflated prices and feel that same angst over struggles many conservatives share. But they do not blame capitalism. They know better.
Before proceeding, it is important to make our terms clear.
Defining Capitalism and Leftism
- Capitalism: a free market in which private individuals can profit from economic activity. This entails private ownership of property.
- Leftism: substantial hostility toward capitalism — or to what leftists perceive as capitalism’s baneful effects.
Leftists, of course, hate poverty, injustice, exploitation, war, imperialism, slavery and all forms of human misery. But they see these primarily as products of capitalism.
Conservatives hate those same ills and acknowledge that they have accompanied all human societies and systems, including capitalism. But they do not see capitalism as the cause. In fact, they regard capitalism as the best economic system for ameliorating those timeless ills.
Thus, leftists and conservatives will never find agreement in the kind of analyses that blame capitalism for human suffering.
In fact, mountains of historical evidence show that capitalism, on balance, has had the exact opposite effect. It has made people wealthier and allowed them to live better than their ancestors could have dreamed.
For instance, according to the 2020 book “Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting,” by Marian L. Tupy and Ronald Bailey, modern Americans spend a substantially smaller percentage of household income on basic necessities than they once did.
In 1900, Americans spent roughly 80 percent of their income on food, clothing and housing. That figure steadily declined and then began to plummet around 1940. A steady decline has continued since the 1980s.
As the 2020s approached, the share of Americans’ incomes devoted to basic necessities had fallen below 50 percent.
No discussion of capitalism and personal expenses should ignore such figures.
Put another way, the average American today enjoys a higher standard of living than a billionaire did 100 years ago.
In 1916, Standard Oil founder John D. Rockefeller probably became the world’s first billionaire.
As conservative columnist George Will noted in 2017, 21st-century Americans enjoy far more material comforts than Rockefeller did.
Citing the work of George Mason University economist Don Boudreaux, Will shared some remarkable conclusions about relative prosperity over time.
“As a 1916 billionaire, you would be materially worse off than a 2017 middle-class American; an unhealthy 1916 billionaire would be much worse off than an unhealthy 2017 American of any means,” Will wrote.
With Rockefeller’s money, you could afford anything the world of 1916 had to offer. But there remained much that that world did not yet offer.
“Boudreaux says that if you had Rockefeller’s riches back then, you could have had a palatial home on Fifth Avenue, another overlooking the Pacific, and a private island if you wished,” Will wrote.
“Of course, going to and from the coasts in your private but un-airconditioned railroad car would be time-consuming and less than pleasant. And communicating with someone on the other coast would be a time-consuming chore,” he added.
Indeed, traveling back in time to live Rockefeller’s life would involve innumerable headaches — and worse.
“Your arthritic hips and knees? Hobble along until you cannot hobble anymore, then buy a wheelchair. Birth control in 1916 will be primitive, unreliable and not conducive to pleasure,” Will wrote.
We all know that things like air conditioning, instant communication and modern medicine make life more convenient and thus bearable.
So why do leftists exclude those facts from critiques of capitalism? Why do they take such improvements for granted — as if they would have occurred apart from free markets?
The more one thinks about it, the more capitalism’s overall record astonishes us.
After all, people 500 years ago did not enjoy appreciably better material conditions than people who lived 5,000 years ago. The rhythms of hardscrabble life persisted more or less unchanged for millennia.
Thus, such dramatic improvements in the mere century since Rockefeller’s time require explanation.
At a minimum, we cannot blame capitalism for all ills and then pretend that prosperity simply occurred on its own.
One hopes that fair-minded leftists will begin to see that the evils they decry do not flow from capitalism. Those evils have existed under every system and will always exist, as long as humans and human institutions do.
Meanwhile, only capitalism has improved people’s material lives.
The post The Left Is Wrong About How Much You Spend appeared first on The Western Journal.
What role has capitalism played in reducing global poverty rates, according to the World Bank?
Ed ever since, with Americans now spending less than 30 percent of their income on basic necessities. This is a result of the innovation, efficiency, and abundance that capitalism has brought to our society.
Furthermore, capitalism has lifted billions of people out of extreme poverty around the world. According to the World Bank, the global poverty rate has fallen from 36 percent in 1990 to about 9 percent in 2018. This remarkable reduction in poverty is largely attributed to countries embracing free-market policies and allowing capitalism to flourish.
Critics of capitalism often point to income inequality as evidence of its failure. However, it is important to distinguish between income inequality and absolute poverty. While income inequality may exist in capitalist societies, the focus should be on the absolute improvement in living standards for all individuals. Capitalism has not only improved the overall wealth of society but has also provided opportunities for upward mobility.
On the other hand, leftist solutions such as socialism or communism have a track record of failure and often lead to economic stagnation, poverty, and lack of personal freedoms. History has shown us the disastrous consequences of centralized government control over the means of production and distribution. From the Soviet Union to Venezuela, socialist experiments have resulted in widespread poverty and human suffering.
Conservatives understand that while capitalism is not a perfect system, it allows for individual freedom, innovation, and voluntary exchange that leads to economic prosperity. They recognize that the key to addressing the issues of poverty and inequality lies in empowering individuals and promoting economic growth, not in stifling entrepreneurship and imposing government control.
In conclusion, while libertarian-minded populists have found common ground in their opposition to censorship, authoritarianism, and the deep state, they remain divided on the role of capitalism in addressing societal issues. Leftists tend to blame capitalism for social problems, whereas conservatives see capitalism as the best system for improving living standards and reducing poverty. The evidence overwhelmingly supports the benefits of capitalism in promoting economic growth and lifting people out of poverty. Therefore, it is crucial for both groups to engage in constructive dialogue and recognize the successes and failures of different economic systems to find effective solutions for the challenges we face as a society.
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