My Response to Time Magazine’s Cover Story on Capitalism

The case for true capitalism is a moral one that’s rooted in human nature and human rights.

Lawrence W. Reed – December 11, 2019

[FEE Editor’s note: The following is in response to the cover story, “How the Elites Lost Their Grip,” by Anand Giridharadas in the December 2-9, 2019 issue of Time magazine.]

The inventor of the now-famous “Overton Window,” the late Joseph P. Overton, was my best friend and a senior colleague at the Michigan organization I headed for nearly 21 years (1987-2008), the Mackinac Center for Public Policy. The Window postulates that at any given time, public policy options are framed by public opinion. Politicians who operate within it can get elected or re-elected, while those who offer proposals outside of it run the risk of public rejection. Move the Window by changing public opinion, and what was previously a losing proposition can then become politically possible.

The Overton Window concept is the springboard Anand Giridharadas uses in his recent Time article. He suggests that anti-capitalist candidates and proposals are now winning because the Window has shifted toward socialism.

While I appreciate the personal citations of both Joe Overton and me in Mr. Giridharadas’s article, I’m compelled to point out a few of its questionable assumptions. In doing so, I feel like the proverbial mosquito in a nudist camp: I know what I want to do, but it’s hard to decide where to begin.

A Stark Misestimate

Let’s start with the article’s assessment of the Democratic race for president. Polls showing that capitalist uber-critics Senators Bernie Sanders and Elizabeth Warren are “top contenders” are proof, Mr. Giridharadas suggests, that his wishful thinking about socialism is valid. This is a “window” that seems to have shifted markedly in the short interval between when the article was written and when it was published.

Warren recently put a price tag on her Medicare-for-All fantasy, a policy that would ban private health insurance. Her support collapsed. Sanders is languishing in third or fourth place, nowhere near the support he had going into the last Democratic convention. All the talk now is about how the rank-and-file are fleeing to the center.

Mr. Giridharadas points to the rise in membership of the Democratic Socialists of America—from 5,000 members in 2016 to at least 50,000 today. But that’s still half the membership (113,000) the Socialist Party claimed at its all-time high, which was in 1912. The Libertarian Party’s membership today is 10 times larger.

Among young people, the story that Mr. Giridharadas completely misses is the explosion of membership and activity among groups friendly to liberty, private enterprise, and free marketsorganizations like Young Americans for Liberty, Students for Liberty, Young Americans for Freedom, Young Americans Against Socialism, Turning Point USA, and the one where I serve as president emeritus, the Foundation for Economic Education. If Facebook following is any sign of relative popularity, it’s notable that the Democratic Socialists’ presence on that social media platform is a tiny fraction of that for those pro-capitalist youth organizations.

If I were a socialist, I’d be worried that these and similar organizations are where the genuine and lively intellectual ferment is. While the Left seems absorbed in suppressing debate, these groups are quietly broadening discussion and nurturing the next generation of thought leaders.

Americans Don’t Trust the Government

Meantime, reports the Pew Research Center, public trust in the government stands at historic lows. Pew finds that “Only 17% of Americans today say they can trust the government in Washington to do what is right ‘just about always’ (3%) or ‘most of the time’ (14%).” Mr. Giridharadas would do the American public a real service if he pointed out that this is the same government on which socialists want to bestow more power and money.

Socialist rhetoric always scores higher than socialist policies, and both score much better than socialist outcomes. Telling people they’re entitled to free stuff, or assailing the rich generally, appeals to a certain number, but those figures shift when rhetoric meets reality. This is one reason nobody—socialists, least of all—is conducting any polling in Venezuela.

What Is Capitalism?

The worst assumption in Mr. Giridharadas’s article, however, concerns what capitalism really is. Implicit throughout is his belief that capitalism is nothing more than cronyism, whereby the rich use political connections to line their pockets.

Mr. Giridharadas ignores the fact that those of us he would surely label as pro-capitalist are just as much against cronyism and corruption as anybody, and likely more so than any socialists are. We understand that the answer to cronyism and corruption is not to give government even more power and money. We support not some corrupted, capitalist straw man but genuinely free markets, limited government, private property, and the rule of law. When will mainstream media learn this distinction?

Moreover, to those of us who appreciate this distinction, the pursuit of money is not the principal objective in life. Critics of capitalism suggest endlessly that it is, but that’s infantile. The case for capitalism rests on something far more important than material wealth. It is not refuted by the occasional bad eggs who misbehave (socialism, by the way, produces bad eggs by the bushel and never creates anything resembling an omelet).

The case for true capitalism is a moral one that’s rooted in human nature and human rights. To create wealth and add value to society through invention, innovation, entrepreneurship, production, and trade is a birthright. One cannot be fully himself—or even fully human—if he must live his life and conduct his affairs according to the dictates of those with political power. It speaks volumes that capitalism is what happens when peaceful people are left alone; socialism, on the other hand, is a Rube Goldberg contrivance with a lousy track record fueled by envy and class warfare.

I’ve known a few business people who do indeed seem to worship “the almighty dollar” and will gladly cut corners or get in bed with government for money’s sake. For every one of those, I’ve known a hundred who are in business for the exhilarating fulfillment they derive from creating useful products, solving problems, and meeting the needs of happy customers.

The Overton Window is a remarkable tool for understanding the connections between ideas and political reality. But it matters that those who invoke it do so with clear thinking, proper definitions, and no axes to grind.

Lawrence W. Reed is President Emeritus, Humphreys Family Senior Fellow, and Ron Manners Ambassador for Global Liberty at the Foundation for Economic Education. He is also author of Real Heroes: Incredible True Stories of Courage, Character, and Conviction and Excuse Me, Professor: Challenging the Myths of ProgressivismFollow on Twitter and Like on Facebook.