Capitalism

Context: AOC made some comments about Capitalism and Thomas Sowell responds to her comments

Alexandria Ocasio-Cortez: Capitalism is an ideology of capital. The most important thing is the concentration of capital and it means that we seek and prioritize profit and the accumulation of money above all else. And we seek it at any human and environmental cost. That is what that means. And to me that ideology is not sustainable and cannot be redeemed.

Thomas Sowell: Let me start with something I’ve said for years. People who think they can remake the world to suit their visions usually end up breaking it instead. Miss Oasiac Cortez statement is a textbook example of that - a stew of buzzwords and moral posturing that collapses under the weight of facts and history. She’s not describing capitalism. She’s caricaturing it - and badly. Let’s take this apart piece by piece because there’s too much ignorance here to let it slide.

First she calls capitalism an ideology of capital that prioritizes profit above all else. That’s a slogan, not an analysis. Capitalism isn’t about worshiping money. It’s about voluntary exchange. People trade goods services and ideas because both sides benefit - not because someone’s hoarding a pile of gold. Wealth isn’t concentrated like some cosmic injustice. It’s created. Take Henry Ford. He didn’t steal his fortune. He built cars millions could afford, revolutionizing transportation and employing thousands. Or look at Steve Jobs. Apple’s innovations didn’t concentrate wealth. They generated it lifting living standards worldwide. The World Bank says global extreme poverty fell from 36% in 1990 to under 10% by 2019. Over a billion people lifted up, not by socialism’s promises, but by market spreading opportunity. Compare that to Venezuela. Under socialist rule since 1999 GDP per capita crashed over 60% by 2020, Inflation hit 1.7 million% in 2018, And people starved while oil wealth vanished. That’s not sustainability. That’s collapse.

She says capitalism seeks profit at any human and environmental cost. That’s another myth. Greed exists in every system. Socialism just redirects it to power instead of money. Capitalists profit by meeting demands, not destroying lives. The US went from 94% extreme poverty in 1800 to 1% today because markets drove innovation. Electricity, medicine, sanitation, not because of government edicts. Socialist regimes, the Soviet Union’s ROC shrank 90% from forced irrigation schemes, man-made ecological disaster. China’s great leap forward killed 30 to 45 million and left scarred landscapes. Socialism’s the one with the body count - human and environmental.

AOC implies wealth accumulation comes at others expense. Nonsense. It’s not a zero sum game. Hong Kong had no resources in 1945. By 1997 its per capita GDP topped $36,000 - higher than Britain’s, through free markets. Singapore’s went from $500 in 1965 to $82,000 today. Wealth grew. It didn’t steal from anyone. Socialism’s alternative? Cuba’s average wage is $30 a month after 60 years of fairness. The Soviet Union’s GDP per capita peaked at $7,000 while the US hit $20,000 by the 1980s. Socialism doesn’t spread wealth - it spreads misery. And this unredeemable line? She’s enjoying capitalism’s fruits - her iPhone, her Netflix, her congressional salary - while decrying it. Hypocrisy aside socialism is the one with no redemption. Every try - Venezuela, Cuba, the USSR, ends in rationing, stagnation and tyranny. Why? It ignores reality. But here’s what she misses. And I’ve said this for decades.

First: capitalism isn’t about concentrating wealth. It creates it and society benefits. The top 1% pay 40% of US taxes - $600 billion a year funding roads, schools, hospitals. Second: government can’t eliminate poverty. It redistributes it - stifling the innovation that actually solves it. The US spent $22 trillion on welfare since the 60s. Poverty still here. Markets cut global poverty in half in 25 years. Third: socialism fails everywhere - not from bad execution but because it denies scarcity in human nature. People work for incentives - not slogans. Mrs AOC can clutch her pearls all she wants. But history’s not a suggestion. It’s a warning. Capitalism’s lifted more people than her ideology ever will. She’d see that if she traded her rhetoric for a ledger and some numbers.

AOC: You know, just as there’s all of this fear-mongering that government is going to take over every corporation and government is going to take over every business or every form of production, we should be scared right now because corporations have taken over our government. And in my opinion, we should be wary of any entity in which both of those things are combined - whether it’s through one way or the other. And that’s why the emphasis in democratic socialism is on democracy. And it’s not about, it it’s it’s just as much a transformation about bringing democracy to the workplace, so that we have a say and that we don’t check all of our rights at the door every time we cross the threshold into our workplace. Because at the end of the day, as workers and as people as society, we’re the ones creating wealth, not a corporate CEO. It’s not a CEO that’s make that’s actually creating $4 billion a year. It is the millions of workers in this country that’s creating billions of dollars of economic productivity a year. And our system should reflect that.

Thomas Sowell: Mrs Cortez keeps piling on the rhetoric, but still light on facts and heavy on fantasy. This idea of democratic socialism and workplace democracy sounds noble. Who doesn’t like democracy? But it’s a recipe for economic disaster wrapped in a feel-good slogan. Let’s cut through the noise and deal with reality because that’s what matters. She says workers alone create wealth and CEOs are just parasites skimming the profits. That’s a fairy tale. Wealth isn’t conjured up by labor in a vacuum. It’s the product of capital risk and vision working together. Take a company like Ford. Workers built the cars. Sure, But Henry Ford invented the assembly line, invested his savings, and took the gamble when 90% of new businesses fail. US Census data shows over half collapse within 5 years. CEOs aren’t sitting in ivory towers twirling mustaches. They’re making decisions - where to invest, what to produce, how to compete. Jeff Bezos didn’t steal Amazon’s $4 billion in annual profit. He built a system that employs 1.5 million people and delivers value worldwide. Workers matter but without capital and leadership, there’s no factory, no jobs, no wealth. Socialism’s tried her experiment. Soviet collective farms run by workers produced famine - 5 to 10 million dead in 1921 to22 - because no one’s accountable when everyone’s in charge. Venezuela’s state-run oil industry, once a global powerhouse, now pumps less than Iraq under sanctions. Outputs down 75% since 1999. Labor without direction is chaos, not productivity. Then there’s this workplace democracy notion - that businesses should be run like town halls. Businesses aren’t governments. They’re voluntary associations. You don’t vote on how to build a car. You do it efficiently or lose to someone who does. Imagine voting on every decision at Apple. The markets would still be flip phones. Markets reward merit and results, not feelings. Yugoslavia tried worker managed firms in the 20th century. Productivity tanked, inflation soared, and the system crumbled by the 90s. Why? No one risks their own skin in a collective. Incentives vanish. Capitalism’s voluntary exchange, workers trade labor for wages, owners risk capital for profit, beats utopian experiments every time.

Now her claim that corporations have taken over government - that’s half right - but she’s got the wrong villain. Free markets don’t cause cronyism. Government overreach does. When politicians control $4 trillion in annual spending, 20% of US GDP corporations lobby for favors. That’s not capitalism, it’s corporatism. A distortion of markets by the state. Look at the 2008 bailouts Banks got handouts because government picked winners not because markets demanded it. Hong Kong thrived with a 15% tax rate and minimal meddling. Per capita GDP hit 49,000 by 2020. Singapore is at 82,000. Contrast that with socialist meddling. Venezuela’s government owns everything. Yet 96% of its people live in poverty today per Encove data. The threat isn’t corporations. It’s bureaucrats with too much power.

Let me wrap this up with three truths she keeps dodging.

1. First wealth comes from capital risk-taking and labor combined not labor alone. Workers need tools and direction. CEOs provide them.
2. Second the real danger isn’t corporate power. It’s government intervention that rigs the game creating cronyism. Socialism loves to exploit.
3. Third businesses run on voluntary exchange, not workplace democracy. Force that and you kill efficiency and innovation. Look at history. East Germany’s Turbons versus West Germany’s BMWs. One side voted with its feet over the wall.

Mrs Cortez wants a system that reflects her vision. Reality doesn’t bend to visions, it breaks them. She’d see that if she looked at the numbers instead of the mirror.