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Debate: Has capitalism outlived its usefulness?

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Debate: Has capitalism outlived its usefulness?

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Side 1 argued by Samuel LeMarch and Ian Menke for Young Americans for Liberty

Side 2 argued by Mason Liagre from The Lode staff

Round 1

Side 1: Capitalism has consistently been proven to be the best economic system yet devised in terms of per capita output, technological advancement, and income. It has lifted more poor out of poverty than any other system in human history. The most economically successful regions of the world, namely North America and Western Europe, also tend to have the strongest capitalist systems. More authoritarian economic systems attempt to regulate production from the top down, putting central planners into the impossible and infinitely expensive task of determining the correct allocation of resources that are consumed by millions of people, each with different subjective needs and tastes. Capitalism, on the other hand, leaves allocation in the hands of the producer and consumer through private market forces. Even mixed systems have led to inadequate results. Income redistribution programs have a tendency to lead the poorest groups into welfare traps, where the earnings incentive is removed due to loss of benefits as earned income rises. Price regulations, such as the minimum wage, resulting in resource shortages and surpluses, leading to significant economic losses that often hurt the poorest populations the most. Subsidies, such as the federal student loan program, lead to significant price inflation and have the effect of further preventing disadvantaged communities from purchasing such amenities. The list goes on and shows that socialist programs almost always lead to negative consequences, and it is only reasonable to assume that the capitalist system is still very useful and should be allowed to continue unabated.

Side 2: Capitalism’s efficacy has been greatly exaggerated. The measures by which it is deemed to be successful are largely artificial, engineered to make the dominant system look better, and don’t actually signify the greater well-being of its people. Proponents of capitalism claim that it has lifted people out of poverty while defining the current global poverty line at only $1.90 a day. It’s easy to make your preferred economic system look good when you create the metric by which you say it’s successful. The fact is that people are suffering. America is portrayed as a thriving country with a high standard of living, but millions of Americans go hungry daily. An economic system that allows this many of its people to go without food has simply failed. Also worth noting is that the viability of alternate economic systems has been diminished by our government and education system. There are plenty of examples of current and past socialist successes. Oftentimes when a country does decide to democratically establish a non-capitalist government, the U.S. swoops in and puts a stop to it, also diminishing its perceived success. Another misconception is that socialism is “authoritarian” or “top-down”—this simply isn’t true. It puts the means of production in the hands of the workers so that they receive the full profit of their work, rather than a capitalist who then doles out as little to them as he sees fit. The greatest evil of capitalism is that it rewards profit over the well-being of its people.

Round 2

Side 1: Fifteen years after The Great Chinese Famine had killed upwards of 43 million people, Deng Xiaoping took control of the economy of China. He adopted many free-market policies, allowing the Chinese economy to rapidly expand to the point where they now have problems with obesity. In fact, several studies have found that poor people are disproportionately obese in America. While the excess of obesity from capitalism is not ideal, it is endlessly preferable to the suffering brought about by non-capitalist systems. Also, saying that capitalism would not incentivize something like renewable energy is absurd. Without profit, what reason will people have to fix the environment? The goodness of their hearts? The man who makes renewable energy affordable will be showered with ridiculous amounts of money in a capitalist system. Tax dollars can never be more effectively allocated, for any purpose, than dollars circulated through consumption. There is corroborated evidence that shows that taxation has a far higher negative effect on economic growth that can be counteracted by government spending, even in the most optimistic predictions. Furthermore, claiming that workers do not get paid what they actually earn is simply projecting your judgment of what his labor is worth onto his wage. This shows a fundamental misunderstanding of value. Goods and services are only worth what someone is willing to pay for them. Markets combine countless factors to bring about workers’ wages. Any redistribution of resources necessarily requires the use of coercion. Someone has to decide how much a worker’s labor is supposedly worth. In capitalism, the market decides. Socialism’s perversion of these markets is misguided idealism at best and malevolent egoism at worst.

Side 2: The idea that capitalism incentivizes what’s best for people is a myth. It is directly contributing to climate change and global warming and needs to be stopped in order to prevent catastrophe. Climate change scientists give us 12 years to prevent irreversible damage to the environment caused by air pollution. In a single hour, the amount of energy hitting the Earth from the sun exceeds what we use in a year. Capitalism hasn’t led to renewable energy, even though it is perfectly viable. What’s hindering us from switching to solar power is that it isn’t profitable to oil companies. If energy decisions weren’t motivated by sheer profit, we could solve the climate change crisis overnight. Capitalism’s tendency to only motivate what makes money also affects daily life in detrimental ways. Many sites of recreation are only interested in your money. Imagine a system where places like zoos and museums are funded by taxes and are open to not only those who can afford them like libraries are now. It’s only a question of tax dollars being allocated in better ways; this could also lead to affordable healthcare for all. Another testament to the failure of capitalism is that people go without medical care because it’s so exorbitantly expensive. The free market doesn’t efficiently allocate resources and has left us without affordable healthcare. Abandon the pervasive idea that taxation is theft. The true theft is the number of a worker’s wages that go to a boss instead of them. Laborers deserve the direct profits of their work, and it’s entirely possible to run a business without a manager. The question is not whether capitalism has outlived its usefulness—it’s how quickly we can abolish it.

*Note: This article ran 11/29/2018

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Debate: Has capitalism outlived its usefulness?