Millennials have a more pessimistic perception about their current and future financial situations than older generations have about their own. In 2013, the Brookings Institution published a report whose authors stated that 58 percent of millennials believe they are worse off than their parents. For comparison, 51 percent of Generation X-ers perceive themselves to be worse off than their parents and 45 percent of Baby Boomers believe that they are worse off. In 2011, researchers at the Pew Research Center published a study indicating that the more affluent and Republican members of the public are twice as likely to hold a favorable view of capitalism. Researchers noted in another Pew study that “faith in capitalism is another victim of the Great Recession.” It is reasonable to conclude that those who are pessimistic and have negative financial perceptions have less faith in their own economic system.
Yet, when it comes to terminology, there is an interesting discrepancy. The 2016 Gallup poll indicated that, overall, roughly 60 percent of Americans have favorable attitudes towards “capitalism,” while 85 percent hold positive attitudes towards “free enterprise.” While these terms admittedly differ in their root and meaning, the difference in attitudes is nonetheless striking. Similar results from a Reason-Rupe poll indicate that favorability among all Americans towards “free markets” rests at 69 percent, “capitalism” at 55 percent, “socialism” at 36 percent, and “government-managed economy” hitting 30 percent. College-aged Americans are significantly more supportive of a free market system than the average American, with 72 percent holding favorable attitudes. They are significantly less supportive of “capitalism,” with 56 percent having favorable attitudes. 58 percent of younger Americans have a positive view of socialism, yet 49 percent have favorable attitudes towards “government-managed economy.” Both polls share a common theme: people are not always certain about definitions and terminology. It stands to reason that young Americans may not dislike capitalism purely as an economic structure, but rather, harbor disdain for the term itself.
A 2016 Gallup poll also found that younger Americans and Democrats are also less likely to have favorable attitudes towards capitalism. Paul Taylor and Pew Research Center found that the younger generation is the most liberal in ideological leaning. Another Pew study found an increasing partisan and ideological gap between generations, with millennials having a larger portion of self-identifying liberal Democrats and Democrat-leaning independents. According to this study, 55 percent of millennials identified as either liberal Democrats or leaning Democrat, the highest percentage of any generation.
However, there are factors other than pure partisanship and ideological leanings that can explain the disdain for capitalism among young Americans. The Great Recession occurred when millennials were either entering the workforce or first becoming cognizant of economics. The downturn endured for two years, with a slow recovery. Wages remained stagnant while the cost of health care and education continued to rise. The “American Dream” that was attainable by Baby Boomers and Gen X-ers came to seem like little more than an eccentric fairy tale. Few millennials have experience in the pre-Great Recession labor force. All we know is the post-2008 reality, with capitalism serving as an easy and convenient scapegoat. Today, a college or graduate degree is largely necessary to attain a higher paying job. When our parents were our age, this was not always the case. Need for higher education is increasing, as is the cost of higher education, but the value is decreasing. The effects of the Great Recession and the lower return on higher education both fuel the cynicism and outright rejection of capitalism. The economic system known as capitalism is largely (and wrongly) attributed to be the root cause for this phenomenon.
Another factor that can explain the hostility towards capitalism is likely the confusion of free market capitalism with “crony capitalism.” Free market capitalism assures individuals earn their worth in a society through competition. It allows for prosperity by encouraging higher quality goods and services to be offered to reflect the needs of consumers. It affords consumers the ability to dictate their preferences and enables them to structure their lives and livelihood in accordance with their desires. The current and popular perception of capitalism among younger Americans is one of corruption, exploitation, and inequality. This perception is not of free market capitalism, but rather, of crony capitalism. Capitalism hinges upon productivity and innovation, while cronysm is predicated upon corruption—specifically between businesses and politicians.
The enmity that young Americans hold towards capitalism can be attributed to ideological and partisan predispositions, personal experiences during the Great Recession, the ensuing stagnant economy, and a fundamental confusion of capitalism with cronyism. This staunch opposition to capitalism will continue unless a better understanding of free market capitalism can be had. Short of that, the acerbic tweets about avocado toast will continue.