The Corner

Economy & Business

Capitalism Isn’t Broken

Modern capitalism occasionally imposes indignities (see the tweet above) in its effort to get the most out of workers. Absurdities of excess exist as well, including paper straws and the margarita that costs $1,200. And many are concerned about inequality, economic injustice, and corporate power.

But are critics of capitalism — including those who argue that we are in a “stage” of capitalism described as “late capitalism,” in which the system is spent and exhausted, reduced to entrenching the elite — correct to be so concerned?

In my latest Bloomberg column, I argue that these concerns are wildly overblown.

* Now is a bizarre time to argue that capitalism is broken. The unemployment rate is at a half-century low, and employment (for prime-age workers) has recovered fully from the Great Recession.

* From the beginning of the Great Recession in 2007 through 2016 (the most recent year for which data are available), the Congressional Budget Office finds that inequality of post-tax-and-transfer income has fallen by 7 percent.

* Technology innovators — who receive a lot of criticism in “late capitalism” discussions — have created trillions of dollars of value for the American people.

* Median household income (after taxes and transfers) is up 44 percent since 1990.

Check out my column for my full argument. Your comments, as always, are very welcome.

Michael R. Strain — Michael R. Strain is the director of economic-policy studies and the Arthur F. Burns Scholar in Political Economy at the American Enterprise Institute.  

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