Professor Leonard Hitchcock recently declared that capitalism has “had its day.” It is a remarkable conclusion, especially because he never tells us what should replace it.
That omission matters. Anyone can criticize an imperfect system. The real challenge is identifying a better one.
Capitalism was never designed by a single philosopher sitting in an office. It evolved over centuries through trial and error, countless individual decisions, and the accumulated experience of millions of entrepreneurs, workers, inventors, investors and consumers seeking to improve their own lives. Before dismissing that experience, one ought to present something demonstrably better. Professor Hitchcock does not.
To his credit, he acknowledges that capitalism replaced feudalism because it rewarded productivity, innovation, competition and private ownership. Those were not small improvements. They transformed civilization.
No economic system in history has fed more people, housed more people, extended life expectancy, reduced infant mortality, developed more life-saving medicines, produced more technological innovation or lifted more people out of poverty than capitalism. It has generated unprecedented prosperity while continually improving the standard of living for ordinary people. That record deserves more than casual dismissal.
Professor Hitchcock next criticizes consumerism. But what exactly is wrong with consumers freely deciding how to spend money they earned? If someone wants a new pickup, a better television or the latest smartphone, why is that someone else’s concern?
Consumer demand is not a defect of capitalism. It is precisely what drives innovation. Businesses compete to build better products at lower prices because consumers demand them. Yesterday’s luxuries become today’s necessities. Air conditioning, automobiles, personal computers, smartphones and countless medical advances became affordable because companies competed to serve consumers better than their competitors.
He also criticizes planned obsolescence and discarded goods. Yet discarded goods rarely disappear. Used cars become transportation for first-time drivers. Secondhand clothing helps struggling families. Refurbished computers find their way into the hands of students. One person’s upgrade often becomes another person’s opportunity. That is not simply waste. It is wealth continuing to create value.
The professor condemns pollution, and here we actually share some common ground. Businesses should bear the costs they impose on others. If a factory pollutes my property or contaminates my water, it should be responsible for the damage. But that is not an argument against capitalism. It is an argument for enforcing property rights and requiring businesses to internalize the costs of their own operations. Those principles fit comfortably within a free-market system.
He argues that capitalism depends upon endless growth. But economic growth is not merely producing more “stuff.” Increasingly, growth comes from producing more value with fewer resources. A smartphone has replaced cameras, calculators, maps, encyclopedias, music players, flashlights, newspapers, libraries and dozens of other products. Innovation often means doing more with less.
Professor Hitchcock also suggests that human beings are naturally cooperative rather than competitive. This presents a false choice. Markets require extraordinary cooperation. Every loaf of bread represents farmers, equipment manufacturers, truck drivers, mechanics, bankers, software developers, wholesalers, retailers and consumers cooperating voluntarily without anyone directing them from above. Competition simply determines who serves others most effectively. Far from discouraging cooperation, capitalism rewards it.
He points to Social Security, Medicare, food assistance and disability programs as evidence that Americans prefer socialism. I see it differently. Those programs exist because capitalism generated the wealth necessary to pay for them. Wealth must first be created before it can be redistributed. No government has ever distributed prosperity that someone else did not first produce.
Throughout the article, however, one question remains unanswered.
If capitalism has truly had its day, what replaces it?
Central planning? History answered that question. State ownership of industry? History answered that as well. Some undefined version of socialism? Again, history has provided abundant evidence.
Before declaring the most successful wealth-creating system in human history obsolete, a serious writer should explain precisely what system should replace it and why it would produce better results. Professor Hitchcock instead offers readers moral judgments and philosophical preferences while leaving the central question unanswered.
That strikes me as the greatest weakness of his argument.
There is a certain arrogance in believing one has discovered that centuries of accumulated economic experience have become obsolete while offering no workable alternative. It is easy to throw stones. It is much harder to build a stone house.
Capitalism built the modern world. It is not perfect, and no serious defender claims that it is. Every human institution has flaws. But anyone who wishes to tear it down bears the burden of showing us something better.
Professor Hitchcock never does.
