No, socialism doesn’t work. Most of us know that. So does anyone who has ever lived in or whose family has fled communism or a socialist country. But most Americans have not had that experience or even know someone who has. American capitalism has shielded us from the destitution of socialist practices, and those Americans who have lived in both systems are keenly aware of the disparity between the two. That’s partly why so many young Americans are cooling to capitalism. In 2019, 58% of Americans ages 18-34 reacted positively to the word capitalism, but that’s plunged to 49% today, according to a June 5-11, 2021 Axios/Momentive poll.
Youth in America today are under the toxic influence of a large and growing field of so-called “academics,” you know, those hyper-liberal college professors. So why are there so many liberal academics, and how do they conveniently ignore reality?
First, let’s look at historical examples of socialism. Dr. Mark Perry, Senior Fellow, American Enterprise Institute, says that socialism will always fail “because it’s a flawed system based on completely faulty principles that aren’t consistent with human behavior and can’t nurture the human spirit.” In his 1995 essay ‘Why Socialism Failed,’ Perry uses historical examples to make the case that “Socialism is the Big Lie of the twentieth century. While it promised prosperity, equality, and security, it delivered poverty, misery, and tyranny. Equality was achieved only in the sense that everyone was equal in his or her misery.”
Perry and others before him have rightly noted that, unlike socialism, capitalism’s success can be attributed to an incentive structure based upon the three Ps: prices determined by market forces, a profit-and-loss system of accounting, and private property rights. “The failure of socialism can be traced to its neglect of these three incentive-enhancing components,” Perry writes.
The fall of the former Soviet Union is an often-cited example, but more contemporary socialist societies have also failed their people, leading to massive inflation, devalued currency, lacking supply of goods and services, and a low standard of living. Israel, India, and the U.K. tried after World War II, but those attempts also failed. Former British Prime Minister Margaret Thatcher best summed up her country’s turn away from socialism as the kingdom neared bankruptcy by famously stating, “The problem with socialism is that eventually you run out of other people’s money.”
Today’s young people could look at Cuba and Venezuela, yet somehow they are conveniently ignored by academics or their failure attributed to U.S. policies that rightly isolate those regimes who abuse their people in order to control them using a corrupt system of government.
The answers are related and pretty understandable. In fact, they have been known for quite some time. In his 1949 essay “The Intellectuals and Socialism,” F. A. Hayek offered a partial explanation. Hayek asked why “the more active, intelligent and original men among [American] intellectuals … most frequently incline toward socialism.” His answer was based on the opportunities available to people of various talents.
Hayek essentially argues that intelligent people who favor a free-market tend to find opportunities for professional and financial success outside of academia. In other words, they are successful in the private sector. Other highly intelligent people find themselves unable to make it to the private sector and are more likely to choose an academic career. Hence, college campuses tend to be filled with those intellectuals who were favorably disposed toward socialism from the beginning. Hence the expression, “Those who can, do. Those who can’t, teach.”
Bob Carlstrom is President of AMAC Action