I am not usually a Matt Yglesias fan, but there are worse thinkers out there, and he's not stupid. He makes an observation that instantly makes sense to me, that young people complaining about capitalism are not only not talking about a formal system of private property rights and reinvestment, not even about a general free market, which is the term I have preferred to use for clarity. They mean, with vague hand-waving, "the status quo." That instantly rang true about the knuckleheads I read on social media complaining how capitalism clearly doesn't work, and impervious to statistics and reasoning about it. They are talking about something else and don't know it.
Over at Slow Boring he put up To save capitalism we need radical land-use reform. (From Emma Camp at the WSJ Free Expression, whose own article Capitalism Gets a Bum Rap is excellent as well. It's about refrigerators!)
If you’re young, your experience of the economy is dominated by the housing situation. And the housing situation in the United States is not very good. So I think for most young people “capitalism” means something like “the status quo system,” and they perceive the status quo system to be pretty bad because they are super exposed to the single most dysfunctional element of the status quo economic system.
Now, in my capacity as a lawyer for capitalism, I am happy to point out that not only is housing the most dysfunctional element of the status quo economy, but it’s also the element that is run in the least capitalistic way.
Far and away the number one thing that could improve young people’s living standards in America would be to embrace more market-oriented housing policies.
I might even get suckered in to making myself miserable for a few days by responding to them again, by beginning with "What you are describing is not capitalism, but the status quo in America, which is a mix of socialist, free market, bureaucratic, and sometimes corrupt elements. The free market parts are actually the parts that are working the best." It won't help, but it's fun to say.
6 comments:
It seems that much of regulation and taxation in real estate is rent seeking and tax farming. I grow weary of both.
I had some fun countering euro-friends during the US baby-formula shortage; with some friends who took the "this is because of capitalism" line.
The US baby-formula market is clearly and extensively documented in the business press and academic literature for having government control of the majority of the market as both buyer and seller, and the government prohibiting new entries.
He has matured quite a bit, which is only fitting.
I've been surveying early socialists from the late 18th through the late 19th centuries. It was interesting to me that capitalism and the free market were seen as different things. Many early socialists were pro-free markets. Capitalism was specifically defined as investing money to make interest -- money making money instead of labor making money. Even CS Lewis pointed out that all three Abrahamic faiths forbade usury, which was commonly understood as charging interest on loans.
I've since stopped thinking about the free market and capitalism as the same thing. You could have a capitalist system with highly regulated markets or even a centrally planned economy, and you can have free markets that don't allow for charging interest on loans & investments, classifying that as usury.
I'm not saying we should have those systems, but it's possible.
I love/hate it when there are so many angles to think about.
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