When people hear the word capitalism, what comes to their mind?
Rich people in top hats riding around on zebras sipping 60-year-old bourbon? Mole-faced fat guys in suits ‘n ties laughing maniacally while soot-stained workers beg for a little more soup? Paris Hilton’s closet full of the finest nonsensical luxuries celebrity fame can buy? People trampling each other enduring fisticuffs and bedlam at the mall, driving themselves into piles of debt, trying to get the hot new toy that every kid wants while executives rub their hands together in greedy anticipation?
That is “capitalism,” or at least that is the portrayal of capitalism that progressives like to embrace to shamelessly advocate for more centralized authority over the economy.
While there are certainly examples in market-driven societies that can be used to exploit the broader scope of free-market capitalism, which inevitably leads to people clamoring for more government control, it is indeed not the rule.
The insidious hobgoblin that leftwing pundits like to scare their children with is the horrifying social maleficence known as consumerism.
What is consumerism?
In short, it is the social theory that constantly increasing consumption is economically desirable for a society. Consume as much as you can and save as little as possible.
In leftwing speak, it is companies trying to expand their profit by endlessly advertising to you a bunch of things that you do not need or want so that they can make themselves wealthy. It is racist, sexist, exploitative, and wasteful. As such, it will lead to the destruction of the planet and the solar system.
Every leftwing publication constantly warns people not to get trapped in the vicious cycle of consumerism, brought to them by the "evils of free markets". Only buy what you need, don't let their advertising work on you!
But is capitalism really to blame?
So where does free-market capitalism actually fit in?
Libertarians believe in free markets, which is the voluntary and free exchange between consenting individuals, without coercion, fraud, or force. Since we do not believe it is ethical to interfere with the trading of free and peaceful people, somehow that amounts to advocating for corporations to be able to beam advertisements directly into our brains while we sleep.
If you want to max out a credit card by buying some status object that makes you feel good about yourself, then that is between you and your credit card company. It is none of our business what you buy for yourself or what you choose to spend your money on.
The reality is; however, this is not something that libertarianism inherently promotes.
The free-market model does not encourage the behavior of wantonly buying luxury items incessantly until an individual is in a mountain of debt. Quite the contrary is true. The supply and demand mechanics of capitalism prevent overproduction the same that it does overconsumption.
The Tragedy of the Commons
Recall the lessons of the tragedy of the commons. Now, think about that concept in a modern framework.
If you went to the mall and money was absolutely no object, you could just consume anything you wanted, how would that look for the average person? Would they have regard for equitable distribution? If there was one awesome purse left on the shelf, would they let someone else have it?
No. They would leave the mall with more bags than Santa Claus on crack.
What stops them from hoarding more than they could ever use? Capitalism. Prices are dictated by market forces without the need for centralized control. The reason there is a mall full of products and not a desolate wasteland is that consumers can only take home what they can afford to buy.
As such, manufacturers receive those signals and produce what will likely be consumed. Attempting to place this relationship under a central system of planning is not only unnecessary, but it is also absolutely absurd.
Think of the word public. What does that bring to mind? That's right, a public toilet, which is foul and disgusting but represents socialism admirably.
When consumers calculate how much they can spend or charge on their cards, they must make the decision of which item is the most valuable to them. Or they can forgo the purchase altogether.
This is why the free market works so well. Individual choice.
Capitalism promotes investing and innovation
Now another good thing about capitalism is that despite its reputation for encouraging banal shopping frenzies, it rewards the consumer by eschewing consumption altogether in favor of investing their income or earnings.
If you have $1,000 in your hand, you could get yourself a nice new gun or a suit, or dress, or some jewelry, but you could also invest the money, which will benefit you and society immensely later down the road.
Capitalism works so well because investing is what strengthens the economy, it is a win-win-win situation for the companies, investors, and consumers.
It allows for innovation and revolution in the markets that make basic goods, technology, and medicine far more accessible to all people. There is no need for a government to be involved to decide who gets what amount. Remember, government cheese?
Without investing, the industrial revolution could not have happened. Without capitalism, the standards by which socialists want every person in the world to live would not exist today at all.
Some consumption beyond basic needs is required for evolution
While buying a $3.8 million handbag and $1.9 million dollar bottle of liquor might come across as vacant and frivolous to some; a level of consumption beyond what you absolutely need to live is beneficial to all of humanity. It is beneficial because it inspires the markets to come up with better versions of existing products that can lead to a much higher quality of life for a vast majority of individuals.
People should be able to treat themselves to luxury items from time to time. We shouldn't have to pick shit with the chickens just to live a life of mediocrity. Capitalism gives us this without driving us into squalid waste. Individual ambition, the urge to want more, newer, and better things, as Adam Smith said, serves the common good.
What was once considered fantastic luxury items, such as indoor plumbing, refrigeration, electricity, and easy access to food, entertainment, medicine, and shelter are now mere everyday necessities.
In essence, capitalism promotes the proper level of consumerism. Not too much, not too little, which leads to the greatest advancements in civilization.
And it is only through capitalism that you can prevent needless wasteful production and consumption, it is only through free markets that we can improve the quality of lives for all people, and it is only through capitalism that every socialist dream for humanity can be achieved.
If you enjoy reading this article, make sure you check out Why You Should Be Grateful for Free Market Capitalism.