In the public square, where capitalism is blamed for everything from climate change to poor sleep, its actual achievements are often left unspoken. The free market economy—also known as capitalism—has produced unparalleled prosperity over the past two centuries.
Yet, many of our so-called leaders seem to have lost faith in it, evidenced by , , regulatory assaults on , large subsidies for green energy initiatives, and the expansion of social programs like , and . Taxation proposals, such as and protections for industries, further complicate the picture.
Fortunately, freedom still has defenders, including Johan Norberg, a Swedish economist and author of (2023). His argument is compelling.
The book's preface notes that, whereas capitalism and free trade were once demonized by the left, today even conservatives have turned against them, criticizing "globalism" and its impact on industrial towns and offshoring jobs. However, as Norberg argues, there is hope that today's anti-globalists may eventually reconsider their aversion to market liberalization and increasing trade freedom.
Norberg points out that opening markets and reducing regulations, which once hindered economic growth in both advanced and developing countries, have led to a significant decline in global poverty. Extreme poverty (defined as living on less than $3 per day in 2017 dollars) fell from 38 per cent of the global population in 1990 to 8.4 per cent in 2022.
Sub-Saharan Africa, however, has mostly missed out on this progress. The reason for the disparity is clear: countries with greater economic freedom see higher economic growth, according to the Fraser Institute's 2022 Economic Freedom . Nations with oppressive, corrupt, or unpredictable laws—like North Korea, Somalia, and Afghanistan—are less likely to attract business and investment. Strong institutions and credible, honest governments help ensure that sound economic policies bear fruit.
In Canada, per capita Gross Domestic Product grew by only t since 1981 and has been flat since 2015. This stagnation results from unfavourable government policies that have reduced business confidence, leading to low capital investment and, ultimately, slower productivity growth.
Business-friendly policies and economic conditions foster capital investment. Unsurprisingly, capitalists, in their quest for profit, invest where the most significant opportunities lie, benefiting from their success. However, Norberg notes that most of the benefits of new products or services—just 2.2 per cent of the social value—accrue to inventors and shareholders while the rest is distributed to society at large.
Examples include smartphones, medical imaging devices, HD televisions, inexpensive air travel, Internet services, and synthetic materials—all of which have become more affordable, improving lives.
Norberg also highlights the occasional failure of companies and their products. But these failures don't erase the fact that capitalism's successes far outweigh its losses.
Ultimately, does capitalism lead to happiness? According to a 2022 UN survey, countries with the highest levels of economic freedom are also among the happiest.
Despite being caricatured as the villain, capitalism's quiet success continues to speak louder than its critics.
While capitalism faces increasing opposition in the public square, its achievements cannot be denied. It has been the primary force behind unparalleled prosperity and poverty reduction worldwide.
The evidence, both historical and contemporary, clearly shows that markets, not state intervention, are the key to long-term economic growth and improved living standards. And while critics will continue to attack capitalism, its enduring benefits will always outshine the flaws they focus on.
Ian Madsen is a senior policy analyst at the Frontier Centre for Public Policy.
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