You’re going to miss me when I am gone

No, I am not talking about myself. I am just quoting a line from the cup song made famous in the movie Pitch Perfect. Instead, I am talking about capitalism. It may be unsurprising coming from a banker but in my view, capitalism is one of the best inventions humans have ever made.

Capitalism is responsible for creating more wealth and progress than any other economic system ever invented. It has lifted more people out of poverty than all charitable efforts and aid organisations put together. It has taken us out of the Malthusian trap and increased agricultural productivity to a level where we can feed more than 8 billion people on the planet, most of whom would have died of starvation or never been born without the financial means to develop modern agriculture. And it has provided the foundations on which health standards have increased so much that global life expectancy has more than doubled in the last 100 years.

Yes, scientists invented artificial fertilisers, antibiotics, and other wonders of modern life, but without capital and capitalists these innovations would never have spread globally but instead would have remained accessible only to the select few (like most things in the thousands of years until the start of the Industrial Revolution).

Yet, it is open season on capitalism. Admittedly, I have lots of criticisms about capitalism and its failings, but I am fully conscious that this is complaining about the details of an otherwise marvellous system. But it seems in my enthusiasm for capitalism, I am in the minority, at least if a survey in 34 countries by Rainer Zitelmann is to be believed.

The survey asked a total of 34,550 people on all continents about their attitudes toward capitalism and their perception of its benefits and drawbacks. And the headline numbers look awful. The chart below uses normalised scores for the aggregate answers across three major blocks of questions. All answers are normalised in such a way that a score of 1.0 shows an equal share of the population agreeing with pro-capitalist and anti-capitalist statements. Higher scores indicate a relatively higher share of pro-capitalist responses than anti-capitalist responses. Zitelmann considers an average score between 0.9 and 1.1 as value-neutral about capitalism, while scores above 1.1 indicate a society that is largely in favour of capitalism and free economy. Conversely, a score below 0.9 indicates a society that is largely critical of capitalism and free economy.

Attitudes toward economic freedom in 34 countries

Source: Zitelmann (2023).

But let us dig deeper and look at the associations people have with capitalism. The chart below shows in how many countries a specific statement ends up in the top 5 most agreed with statements about capitalism among a pool of 18 statements. As you can see the idea that capitalism is dominated by the rich is in the top 5 answers in 33 out of 34 countries. Fair enough, if you have a lot of capital, you dominate a system like capitalism. I can live with that.

Number of countries in which the listed statements rank in the top 5 of 18 statements

Source: Zitelmann (2023).

But look at the other end of the list and you will find the notion that capitalism is an efficient economic system in the top 5 statements of only one country. And the statement that capitalism has improved conditions for ordinary people only in the top 5 of 2 countries (read the second paragraph of this post again to know what I think about that). I could go on, but it is fair to say that capitalism needs to hire a good PR agency.

And as you may have guessed, criticism of capitalism is more prevalent among people leaning left on the political spectrum. But among conservative people, things are not always the same in every country. Zitelmann identified a set of ten countries (among them the US, Sweden, and Switzerland) where people are more pro-capitalist the more to the right they are on the political spectrum.

Countries where the far right is most capitalist

Source: Zitelmann (2023)

Yet in more countries than that (16, to be precise), being on the far right of the political spectrum is associated with being more critical of capitalism than being on the moderate right. In these countries (among them the UK, Germany, and France) the moderately conservative people tend to be most in favour of capitalism.

In my view this matches well with the populist right parties in these countries which have quintessentially anti-capitalist views and goals. Whether it is the Brexit Party in the UK (now Reform UK) which is against free trade and a more isolationist country, or the Alternative für Deutschland and Rassemblement National in France both of which are mostly defined by anti-immigration and pro-socialist government redistribution policies.

Countries where the moderate right is most capitalist

Source: Zitelmann (2023)

In the end, then, capitalism seems to be under threat. It is being attacked from both the left and the populist right and it desperately needs some defenders because as I stated above, much of what we take for granted today would have been impossible without capitalism and is indeed a product of capitalism, directly or indirectly. And if we abolish free markets, free trade, and capitalism in general, we are pretty quickly going to miss it.