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OPINION: Our free market economy is better off without capitalism

In America, 10% of the population controls half of the wealth. Businesses grow to enormous sizes and destroy competition from small businesses. Capitalism is doing something dangerous to our free market economy.

The debate about capitalism is admittedly banal. However, I want to defend the free market economy and wash its name off of capitalists who praise it wrongly and socialists who genuinely hate it. Both sides often misunderstand it.

A persistent false dichotomy from the Cold War era suggests that a free market economy is identical to capitalism and that the only alternative to capitalism is Marxism, socialism, or communism. The misunderstanding bundles these complicated ideas into a jumble of meaningless “isms”.

Defining capitalism is not easy, but it is best understood in three sequential parts: private ownership of production, accumulation of profit and capital, and then the creation of a powerful ruling class.

It is worth noting that modern socialism and its many offshoots are conceived as opposites to capitalism. Modern socialism is a system in which a central power plans most, if not all, economic activity. The other “libertarian” form of socialism, sometimes referred to as democratic socialism, includes workers-owned companies that have their place in a free market economy.

The problem is that a small group of bureaucrats running the economy cannot improve conditions any more than a small group of industrialists. People’s wants and needs are too great for a single group to properly handle, so the system works best when it is democratized.

Both capitalism and socialism are dogmatic ideologies that serve no useful purpose in the real economy. As Rev. Martin Luther King said, “Communism forgets that life is individual. Capitalism forgets that life is social. “

The free market economy or classical liberal economy is a living ecosystem of exchange and trade. Naturally, it longs for a balance between supply and demand, investor and beneficiary, producer and consumer, and employer and employee in a concept known as “economic balance”.

This can only be achieved on the condition that everyone has equal opportunities and that they play by the same rules. These concepts are often discussed but rarely implemented. Capitalism stands in the way of a fruitful free market economy.

Capitalism is much younger than the concept of a free market. Capitalism has hijacked the free market economy and led it from a fluid system of exchange and regular wealth transfers to a rigid power structure from top to bottom, perverting individualism and endangering equality.

The cycle of wealth concentration and power consolidation in capitalism is designed exclusively for the short-term gain of a minority at the expense of long-term stability for all others.

Although capitalists claim to be against state interference in the economy, capitalists have historically benefited tremendously from influencing government, such as lobbying for the creation of public policies in favor of industrial interests under the guise of promoting “economic growth” or “Stimulation”.

Capitalism inevitably creates massive wealth inequality in any nation because it is one-sided. With a total inclination towards the owners of capital, all those who do not have capital, such as the working and middle classes, are left out of the equation.

There is no such bias in the free market economy. However, it works best when wealth and money flow like water and circulate throughout society. A natural redistribution of wealth takes place without the government having to force it.

According to The Atlantic, Adam Smith, known as the father of economics and often mistakenly referred to as the founder of capitalism, believed that a nation’s wealth and prosperity were measured by how well the poor are doing. Smith challenged the colonizing economy of mercantilism, a system that has more in common with capitalism than Smith’s classical economy ever did.

Smith is one of our best allies in proving the illegality of capitalism. He reminds us that power matters. Capitalism, like mercantilism and feudalism before it, ensures that power is concentrated in the hands of a few, but the free market system was a radical new invention that brought democracy to the economy.

Capitalism is a money-centered system while the free market was created for, by, and by people. To this extent, the free market is a system like language, culture and science, which is indispensable for the development of human society.

Against capitalism? We’re better off without it.

Eric Reingardt (he / he) is a freshman studying franchise. He is a freelance writer with a profile at Substack.

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