Capitalism: Still Popular, Despite the Bad PR

Capitalism: Still Popular, Despite the Bad PR
Julie Gunlock
Friday, October 16, 2009

Capitalism seems rather out of fashion these days. Whether it’s President Obama’s penchant for taking over private industry, Congress’ uncontrolled spending, or the media’s near-constant attacks on Wall Street, one can safely assume capitalism will be placed in the “out” category on those ubiquitous year-end round-ups of trends that are “in” and “out” of fashion.

Michael Moore’s myth-making on the big screen is the latest the attempt to weaken the American public’s confidence in capitalism. It could prove effective because let’s face it, more Americans go to the movies than read economic theory. Moore’s movie Capitalism: A Love Story is standard Michael Moore buffoonery—light on facts, heavy on juvenile humor. But there’s no doubt, some would also call it convincing—especially to those who don’t know what capitalism actually is--like Michael Moore himself.

In a rather embarrassing and revealing interview on Larry King Live, Moore made his ignorance of his movie’s title glaringly apparent. A caller to the show suggested to Moore that the movie’s central theme dealt more with corruption and greed and asked “what does this have to do with capitalism?” Watching Moore attempt to answer reminded me of my son learning to talk—struggling for the right words, trying to put them into a complete sentence, then trailing off. In other words, a collection of words clumsily put together, ultimately leading nowhere.

While Moore’s latest salvo might make some nostalgic for capitalism’s glory days of Reagan, Thatcher, and Friedman, the truth is that despite the recent public relations hit, capitalism remains extremely popular in this country and around the world. Why? It’s simple: People know what’s good for them.

In July, the New York Times ran a story about a new Pew Global Survey with the predictable Obama-centric headline, “Global Views of U.S. Helped by Obama, Survey Says.” Indeed, the survey did show an increase in pro-American sentiment in nearly every country since the election of Barack Obama.

However, and perhaps not surprisingly, the New York Times failed to mention some of the other (and frankly more interesting) trends the survey revealed, such as the substantial popularity of free market economics and free trade. The Pew report authors summarize the finding by stating:

“While most countries around the world are struggling with an economic downturn, this has not led to a backlash against global trade. In fact, as has been observed in recent American polls, this year there is, if anything, more support for trade than there was in 2008. Most publics continue to see trade as beneficial for their countries and for their families. Nor has the economic crisis led to widespread doubts about the free market. In the vast majority of countries surveyed, most think the free market approach to economics is good for society, even if it produces income inequalities.”

It isn’t just wealthy nations that prefer the capitalist system. The survey shows that “[s]upport for the free market approach is strongest in two of the poorest nations on the survey, Kenya (84% agree) and the Palestinian territories (82%). Palestinians are now considerably more likely to endorse free market economics than they were two years ago, when 66% held this view. Support is also high in the growing Asian giants India (81%) and China (79%).”

Proponents of capitalism tend to focus on the system’s benefits in terms of encouraging economic activity, the efficient allocation of labor and capital, and overall wealth creation. Indeed as The Cato Institute’s annual report of Economic Freedom of the World found, countries with greater economic freedoms produce on average much higher GDPs and more than double the economic growth rate of statist economies. But capitalism isn’t just good for the bottom line: people living in freer economies also tend to have higher life expectancies, less corrupt governments, more political rights and greater respect for civil liberties.

Capitalist countries are also far more generous to other nations. The largest 22 contributors of international aid are members of the Organization for Economic Co-Operation and Development and all have relatively free economic systems. In all, these countries contribute over a hundred billion U.S. dollars each year in foreign aid and the money ends up in countries not at all friendly to them such as Cuba, Libya, North Korea, and Iran.

Women also do better in a capitalist system. The UN produces two measures of women’s well-being: the Gender-Related Development Index, which measures women’s health, education levels, and standard of living; and the Gender Empowerment Index, which captures political and economic participation, and women’s estimated earned income. When these indices are compared against Cato’s Economic Freedom of the World report, countries with high levels of economic freedom consistently score high on the GDI and the GEM, and conversely, those that score low on the Cato’s graph, score low on the UN gender indices.

Capitalism isn’t perfect but it’s the best option for creating greater health, wealth and well-being for the world’s population. While those in the White House, in Congress and in Hollywood try to weaken this country’s capitalist system, Americans know better…and so does the rest of the world.