OPINION | COMMENTARY
This Is No Time to Go Wobbly on Capitalism
As Democrats embrace outright socialism,
some CEOs and Republicans call for unwise compromises.
There’s an important debate happening in America right now, a competition among three distinct views of the world. The first view is held by those who think capitalism is the best and fairest economic system the world has ever seen. The second is held by those who think socialism is the answer to a host of problems from climate change to inequality. Then there are those who are pushing a watered-down or hyphenated capitalism, which is the slow path to socialism.
Mark me down as a capitalist. I grew up in South Carolina as the daughter of Indian immigrants. My mom started a small business selling clothes and gifts. She worked hard and showed my brothers, my sister and me what it meant to live the American dream. The U.S. is a country where people can find jobs that match their talents and passions. America has lifted up more people and unleashed more prosperity than any other country in human history.
In 1800, you were lucky if you lived to be 40. A third of children didn’t live past 5. Since then, the U.S. has become an industrialized nation. Average real income per person has soared by 4,000% since 1800. Medical breakthroughs mean Americans live much longer. In 1820, 94% of the world lived in extreme poverty, earning less than $1.90 a day, adjusted for purchasing power. Today that figure is closer to 10%. Because of capitalism, the world is cleaner, healthier and wealthier than ever.
As governor of South Carolina, I saw capitalism work. Pro-market policies helped bring our state more than $20 billion in capital investment and created jobs in every county. But I saw something different during my time as ambassador to the U.N. I was reminded that not every country enjoys the same freedom and prosperity. More than 1.5 billion people still suffer under socialist regimes.
Socialism is the dangerous proposition that government should control more of your life, including your property, your money and even your religion. From North Korea to China to Venezuela, socialism results in hunger, poverty and misery. It destroys communities, represses religion and crushes freedom.
In 2018, I stood on the Simón Bolívar International Bridge on the border of Venezuela and Colombia. I watched thousands of Venezuelans cross into Colombia for the only meal they might have that day. I held a beautiful baby girl. Her mother told me all she wanted for her daughter was a future of freedom. They were one of millions of Venezuelan families whose lives have been destroyed by dictator Nicolás Maduro’s socialist policies.
So imagine my surprise to find that socialism has become trendy here at home. Only in a free and prosperous country is it so easy to take capitalism for granted. American socialists claim they seek a gentler socialism, like the one found in Scandinavian countries. But over the years Sweden has cut taxes and introduced a school-choice program. Denmark has cut its business tax rate by more than half since the 1990s. Other democracies, including Israel, India and the U.K., experimented with socialism, only to abandon it. Socialism has failed everywhere it’s been tried.
An entire generation of American adults are too young to remember the suffering socialism caused during the 20th century. Collective historical ignorance is becoming a real threat. Those of us who remember have a responsibility to educate young Americans about the poverty and tyranny that inevitably follows socialism.
Socialism represents the greatest threat to American values, but another movement is also cause for alarm. Advocates of so-called stakeholder capitalism—a philosophy that retains the word “capitalism” but abandons its meaning—include the Business Roundtable. Last year, the chief executives of America’s largest companies changed their definition of business. They said companies should focus on customers, workers and communities instead of being the best business possible. This has a nice sound to it but makes no sense. In reality, a company that cheats its customers, mistreats its workers and abuses its community won’t be around long.
The Business Roundtable knows better, but corporate America is buckling under the pressure of political correctness. This is an unhealthy development that will make business the servant of politics. Few things are more dangerous than big government in cahoots with big business.
Then there are critics who call for other kinds of hyphenated capitalism. Some are conservatives who seem embarrassed by the free market. They advocate for more tax credits here, more subsidies there, more mandates for this, more regulations for that. But their new capitalism would merely give government more power over businesses, workers and families. It differs from socialism only in degree.
It’s true that some businesses are corrupt. That isn’t capitalism, and it isn’t legal. It’s also true that too many lobbying interests win special treatment. That isn’t capitalism either. It’s cronyism and corporate welfare, which should be stopped. Finally, it’s true that income inequality exists. But that’s infinitely better than the alternative. Under socialism, everyone is equal—equal in poverty and misery—except for those who control the government.
The socialist and hyphenated capitalist “solutions” will make these problems worse and lead to less freedom. The better answer is to double down on capitalism. President Trump has done that. Unemployment is at a 50-year low. Wages are rising at the fastest rate in a decade. Welfare is shrinking. Millions of Americans have found good new jobs. The stock market boom is helping millions of retirees. It’s time to embrace capitalism, not abandon the values that make America the envy of the world.
Ms. Haley served as governor of South Carolina, 2011-17, and U.S. ambassador to the United Nations, 2017-18. This op-ed is adapted from a speech she delivered to the Hudson Institute.