Is Capitalism really true freedom? Does a predominantly free market system actually afford its citizens more freedoms, or do the ways in which the lower classes are then restricted outweigh the ways in which others are permitted? If I dared to ask these question in front of my Uncle Gary or anyone else known for their facebook posts on conspiracy theories surrounding Obama’s birth and their attendance at my bi-yearly family reunions, I may be lectured for an hour and branded a communist by the end of it. Now, let the record show that I am not a communist, nor am I a socialist, although I can admit that there would be benefits to this system.
The issue is that I am not capitalism’s biggest or most enthusiastic supporter either. I never noticed an issue with the system because I have always been a direct beneficiary it. In my junior year at Ursuline, I got the opportunity to go to Uganda. I had never been out of the United States before this trip, and I was ready to see the rest of the world in all its glory. I was, however, not met with the beautiful world I had imagined was beyond my acre-wide, swimming pool outfitted, picket fenced backyard.
In Uganda, at least as far as the locals my age were concerned, there are two types of people: “us” and “the people who live on the hills.” Uganda is a beautiful country. Living on one of its mountains would give you a wonderful view, a high rent, and a long commute to work if work was a fruit stand or somewhere like it. So, naturally, the only affluent white people in the entire nation live on the hills. Thus far naive and trusting of all governments and economic systems unless they were explicitly ingrained in me to be evil (socialism, for example), I was shocked to have my eyes opened to deliberate injustice on the part of one’s government, especially one which had convinced the world that it functioned in the most freedom-promoting way possible.
Uganda has a democratic government and is as capitalist as the United States, which is to say with limited but definite government intervention, but an otherwise free market. The democracy may be debated due to the current habit of the “president” pushing back the election date every time it rolls around, and the suspicious fact that the district where the president’s tribe resides having the best roads, but the capitalist nature of the economy cannot be challenged. But something about it does not seem to be working. Uganda is one of the poorest nations today, with 37.7% of the population living on less than $1.25 a day (“Poverty headcount”). But that is not to say that the country as a whole is not doing well economically. However, despite an average annual growth of 2.5% between 2000 and 2003, poverty levels increased by 3.8% and have not seen considerable improvement yet (“Economic growth”). In Uganda as well as in our very own country, state, and city, that capitalism has created momentous wage gaps such as this.
Yes, capitalism affords certain freedoms to people. We have the freedom to go to the store in search of a product, and choose between many different brands, types, and styles at all different prices, something that is not common in communist countries. We have the freedom to choose our own professions. We have the freedom to choose how we spend our time, money, and effort, every single day.
Well, at least the upper and middle classes do. The immense wealth gap often caused by capitalism greatly limits the lower economic classes. As Pope Leo XIII states in Rerum Novarum, economic power is “concentrated in the hands of comparatively few; so that a small number of very rich men have been able to lay upon the teeming masses of the laboring poor a yoke little better than slavery itself.” Those who live in poverty do not always have as much freedom of choice in buying products because their choices are often restricted by price. Additionally, for impoverished citizens, not all professions are available due to an inability to pursue a college education. So truly, freedom of choice is not available to everyone in a capitalist society. Capitalism may give freedom to some, but when it comes to those already living in poverty or close to it, there is much less. The lower classes are enslaved by their own basic human needs, with little left to lift themselves out and above the poverty line.
The disparity in wages and standard of living are not the only way our illusion of freedom in a capitalist system is shattered. Capitalism’s freedom of choice also sacrifices the freedom of the following generations to live on this earth in a sustainable way. A capitalist society driven by the profit motive may take decisions to maximise economic income in the short term, but at a cost of environmental problems in the long-term. Then again, all of this sacrifice could be for nothing. In a capitalist society, there is always the looming threat of monopoly. In fact, much of our economy is already run by monopolies. Pepsico, though not a complete monopoly, owns not only a variety of sodas, as well as the chip and snack company Frito-Lay, plus Naked juice and Quaker oatmeal, to name a few products. Not only this, Pepsico also owns restaurants KFC, Taco Bell, and Pizza Hut. This goes to show that all too often, when we think we are making a choice in whom we are buying our products from, we are only fooling ourselves. If capitalism does not truly give us freedom of choice, is it really worth it? We go to the grocery store and choose between a thousand Pepsico products, but are satisfied with the illusion that we have the power of choice.
However, it is not as if the beneficiaries of the capitalist system and the owners of these monopolies are in complete control either. Capitalism casts illusions of greater freedom on the producers themselves as well. Adam Smith acknowledges this phenomenon when he notes that “every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security… and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
If capitalism is not the economic system that affords all people the maximum amount of freedom, what could? While socialism almost ensures the freedom of adequate wealth, there is virtually nothing to use it on. Namely in the act of buying goods, there is no freedom of choice available, so there is no point in having the financial means to make a choice. Under socialism, all are granted the freedom to live relatively comfortably without fear of starvation or homelessness. However, in attaining this, we must sacrifice nearly every other economic freedom.
Socialism obviously is not the answer to finding a more free economic system than capitalism. Perhaps the answer lies with the church. With the publishing of “Easter and Economics,” John C. Médaille introduced the concept of distributism to the world. Distributism, as Médaille describes, “seeks to restore distributive justice to its proper place,” reduce the wealth gap, and is something of a mix of capitalism and socialism.
Socialism is not true freedom by any stretch of the imagination. Capitalism is not either, especially considering the way it limits a significant portion of a nation’s population. While distributism might be preferable, it would be difficult to regulate, let alone transition entire national systems to adhere to it. Even then, we cannot ensure that it would always provide the most freedom for all people. Incomplete capitalism with government intervention determined by a just leader may just be the closest we can get. However, we cannot always be sure that a just leader, who acts with the entire nation’s interests in mind, will always be in charge. It may be that the United States truly has found the most free type of economic system. Yet, there are still so many in our society who are enslaved not by their governments, but by monopolies, demand, and their own basic human needs. This is why I am led to believe that there is no perfect answer, or else we would have found it. There is no perfect system, or else we would be using it. This is not to say, however, that we should stop searching. We must continue to move forward, always observing, always challenging, so that one day we might be able to create a brighter world, one with economic freedom for all people, as opposed to just most.
“Economic growth and the MDGs.” Overseas Development Institute. May 31, 2011. Accessed May 1, 2015. http://www.odi.org/publications.
Pope Leo XIII. Rerum Novarum. Vatican: the Holy See, 1891.
“Poverty headcount ratio at $1.25 a day.” World Bank. February 10, 2012. Accessed May 1, 2015. http://data.worldbank.org/indicator/SI.POV.DDAY
Médaille, John C. Easter and Economics. New York: Catholic Publishing, May 201.
Smith, Adam. The Wealth Of Nations. New York: P.F. Collier & Son, 1909.