A new survey asks Gen Z about capitalism and its flaws.
By James Freeman
Wall Street Journal
October 29, 2018
Capitalism is more popular than socialism among American college students. But neither one commands majority support and the kids seem disturbingly open to central planning of the economy. That’s according to a new survey of American undergraduates due out later this week.
On Friday this column noted the survey’s results on issues of campus speech. Specifically, a majority of students reported that faculty at U.S. universities frequently share their views in class on social and political topics completely unrelated to the subjects of their courses. Also, a majority of respondents said they felt intimidated in expressing views not shared by professors and fellow students. The national online survey of 800 full-time students includes those enrolled at both public and private four-year universities. Polling was done by McLaughlin & Associates on behalf of Yale’s William F. Buckley, Jr. Program, which counts your humble correspondent among its directors.
Today the focus is on how students responded to the survey’s questions about dueling economic systems. Given other polls suggesting that Marxism is popular among young people and the journey of socialist Sen. Bernie Sanders from fringe irrelevance to intellectual leader of the Democratic party, the latest results are perhaps barely reassuring.
When asked for their opinions of capitalism, 45% said they have a favorable view, 31% expressed an unfavorable view and the rest had no opinion, were unsure, or didn’t answer. Not exactly a ringing endorsement of the property rights that have made the United States the most prosperous nation in history, pulled billions of people out of poverty around the world and enabled, among other things, the funding of great universities.
Trying to look on the bright side, some might argue that the phrase “capitalism” is not always the most appealing descriptor for allowing people to voluntarily transact with each other. It’s possible that “free markets” and “open economies” would have polled better.
Whatever we call allowing free people to engage in commerce, it is still beating the competition, even in the minds of college students. When asked for their views on socialism, only 34% of survey respondents said they favor it, compared to 42% with an unfavorable view.
Now for the bad news. While more kids expressed favorable views of capitalism than of socialism, they also seem to think that America could benefit from the latter. Here’s another question from the survey:
Which of the following comes closer to your own personal opinion?
Some who say socialist principles have the potential to be good for America because they promote fairness and give more opportunities to the less fortunate and those who struggle in our society. They say capitalism has left too many people behind.
OR
Others who say while capitalism isn’t perfect, it has promoted freedom and opportunity for millions in America and across the world. They say socialism is too radical and goes against the ideals that our country was founded upon.
In fact few things in life are more harsh than living in a socialist economy. What’s the best way to help the youngsters avoid having to learn this lesson first-hand? Perhaps parents will choose not to leave their children’s education entirely up to tenured professionals and instead opt to assign readings on their own. Along these lines they might consider adding requirements each semester for any children who want tuitions paid on time. For example, students could be instructed to read and be prepared to discuss “The Opportunity Costs of Socialism” over Thanksgiving dinner.
The recent report from the White House Council of Economic Advisers helpfully describes the history of the real red states—places like Cuba. The report notes that after socialist principles were applied to agriculture there in the early 1960s, production of eggs declined 40%, beef production fell by 45% and the potato crop was cut in half. Pork production plunged by more than 80%.
Over the abundance of an American Thanksgiving feast, students who have read the paper will also be able to respond to the random uncle who works in the non-profit sector and insists that socialism is working like gangbusters in Scandinavia. This is the view of Bernie Sanders, and perhaps he clings to it because Nordic countries were expanding their welfare systems in the 1960s and ‘70s when his views were formed.
The White House economic team provides a more recent report:
Although they are sometimes cited as more relevant socialist success stories, the experiences of the Nordic countries also support the conclusion that socialism reduces living standards. In many respects, the Nordic countries’ policies now differ significantly from what economists have in mind when they think of socialism. For instance, they do not provide healthcare for “free”; Nordic healthcare financing includes substantial cost sharing. Marginal labor income tax rates in the Nordic countries today are only somewhat higher than in the United States, and Nordic taxation overall is surprisingly less progressive than U.S. taxes. The Nordic countries also tax capital income less and regulate product markets less than the United States does.
However, the Nordic countries do regulate and tax labor markets somewhat more; thus, American families earning the average wage would be taxed $2,000 to $5,000 more per year net of transfers if the United States had current Nordic policies. Living standards in the Nordic countries are at least 15 percent lower than in the United States.Let us all give thanks that America hasn’t made the big socialist mistake, and that voters in Nordic countries have corrected so many of theirs.
It may well be that American socialists are envisioning moving our policies to align with those of the Nordic countries in the 1970s, when their policies were more in line with economists’ traditional definition of socialism. We estimate that if the United States were to adopt these policies, its real GDP would decline by at least 19 percent in the long run, or about $11,000 per year for the average person.