We’re at a moment where support for free-market capitalism is slipping—and it’s not hard to see why. From both political parties, we’re hearing the same kinds of ideas: cap prices, punish profits, and have the government take a more active role in managing markets. 

Politicians are increasingly trying to pick outcomes, override prices, and direct capital. And history is clear: this doesn’t fix capitalism's weaknesses—it replaces markets with politics.

In today’s episode of This Week’s Economy, I break down why prices and profits matter—how they act as the heartbeat of the free market, sending signals, shaping decisions, and fueling the competition that improves our quality of life. 

You can also catch the full episode on YouTube, Apple Podcast, or Spotify, and visit my Substack newsletter for show notes and more information.

Free-market capitalism remains the best system ever discovered for human flourishing. Yet political support for it is wavering — and that should alarm anyone who cares about prosperity and freedom.

A recent Gallup poll on Americans’ views of capitalism and socialism found that just 54% of Americans now view capitalism favorably — the lowest level Gallup has ever recorded.

The partisan breakdown is striking:

• Republicans remain strongly pro-capitalist, though support has softened.
• Independents now only narrowly favor capitalism.
• Among Democrats, fewer than half view capitalism positively, while nearly two-thirds view socialism favorably.

The data reveal a hard truth: those of us who defend free-market capitalism are unlikely to persuade most Democrats anytime soon. Many Democrats appreciate the outcomes of capitalism — jobs, innovation, rising living standards — yet reject the label itself, often associating it with inequality, corporate favoritism, or cronyism.
That means the task before us is bigger than winning a policy argument. It’s about reclaiming the moral case for capitalism.

In today’s episode of This Week’s Economy, I lay out that moral case, explore why criticisms of capitalism are gaining traction, and discuss how we can renew support for the system that has lifted more people out of poverty than any other in history. Tune in to the full episode on YouTube, Apple Podcast, or Spotify, and visit my website for more information about Ginn Economic Consulting and vanceginn.substack.com for show notes.

Originally published at The Daily Economy. 

If you only followed the political feed, you would think the world is splitting into billionaires on yachts and everyone else eating instant noodles forever. Then you see the data, and the narrative gets awkward, fast.
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A recent Economist graphic, in the article “The world is more equal than you think”, underscores something many people do not want to say out loud: global living standards have been converging, meaning poorer countries have been catching up in ways that matter for real life. 

That is not a victory lap. It is a reality check.

The inequality debate matters because it shapes policy. When lawmakers believe the world is growing less fair by the day, they reach for bigger government as the default response. But if the real goal is upward mobility, opportunity, and a decent life for regular people, the biggest obstacle is not “the rich.” It is the policy machinery that blocks competition, inflates costs, and quietly transfers wealth toward the politically connected.

What The Global Story Actually Says

Researchers at Brookings point to two forces behind global inequality trends: the “between-country” gap (the difference in average living standards across countries) and the “within-country” gap (inequality within each country). They find that the between-country side has been an equalizing force because many developing countries have grown faster than advanced economies. They note that in 2000, cross-country income differences accounted for about 70 percent of global inequality, with that share falling as countries converge. They also highlight that the within-country component has been mixed but roughly constant on average since 2000, and is projected to become more important going forward. The share of global consumption for the world’s poorest half rose from about 7 percent in 2000 to 12 percent in 2025. That is still low, but it is movement in the right direction. (If you are scoring at home, “the poor getting more” is not supposed to happen in the apocalyptic version of this story.)

Now layer in a second data stream that is even easier to understand: are the poor in a given country seeing their incomes rise?

The Our World in Data chart tracks the annualized growth rate of real income or consumption for the bottom 40 percent of a country’s population, based on household surveys and the World Bank’s Poverty and Inequality Platform. It is not perfect, but it is grounded in the question people actually care about: are those nearer the bottom moving up?
This is what a healthy “inequality conversation” should sound like: less sermonizing about billionaires, more focus on whether people are gaining purchasing power and options.

The Alternative View Deserves a Hearing, Then a Cross-Examination

Oxfam’s 2026 report, “Resisting the Rule of the Rich”, argues that billionaire wealth is rising rapidly and that extreme wealth can undermine democracy. It claims billionaire fortunes have grown at a rate “three times faster” than the previous five years and that the number of billionaires has surpassed 3,000, while “one in four” people face hunger.

That is the kind of framing that fuels the “eat the rich” mood. But here is the problem: it often treats “wealth” as if it were a pile of cash stolen from everyone else, rather than a constantly changing market valuation of businesses that create products, jobs, and productivity. It also slides between important concerns (cronyism and corruption) and a very different claim (free enterprise itself is the culprit). That bait-and-switch is common.

If the real concern is political capture, that concern is understandable. The solution, however, is not to hand more power to the same institutions that create capture in the first place. The way to weaken oligarchy is to eliminate the deals, carve-outs, and barriers to entry that make oligarchy profitable.

And yes, big tech and “superstar” companies raise real governance questions. Even The Economist has highlighted the “superstar dilemma” in corporate pay and talent markets, a complex issue that is not always pretty. But the cleanest way to discipline superstar firms is not to freeze the economy into a regulator’s version of fairness. It is to keep markets contestable, meaning new entrants can actually challenge incumbents.

The Uncomfortable US Lesson: Growth Beats Dependency

Here is where the inequality myth really breaks down. If the concern is that markets cannot deliver broad progress, then we should look at periods when broad progress actually happened.

​A new NBER working paper by Richard Burkhauser and Kevin Corinth provides a blunt historical comparison of poverty trends before and after the War on Poverty. They build a consistent post-tax, post-transfer measure and find that from 1939 to 1963, poverty fell by 29 percentage points, and that the pace of poverty reduction after 1963 was no faster when measured consistently. They also emphasize that the pre-1964 reduction in poverty was driven mostly by market income growth, not by expansions in transfers.

That is not a claim that safety net programs have no value. It is a reminder that the most powerful anti-poverty program is still called a job in a growing economy, supported by rising productivity and competition. 

When politics replaces growth with managed redistribution, it can reduce measured poverty in a narrow accounting sense while trapping people in low-mobility systems and higher cost structures.

So what is the real driver of inequality, perceived or real? Policy.

If people feel the game is rigged, it is usually because it is, but not in the simplistic “the rich did it” way. It is rigged through four main channels.

Spending

Government spending is not “new money.” It is a transfer of scarce resources from private activity into political allocation. Once spending becomes the main tool for solving every social problem, the economy becomes a contest for subsidies, grants, and contracts. That is how you get corporate welfare and permanent bureaucracies that grow regardless of results. The cost is what you do not see: businesses not started, wages not earned, inventions not funded.

Taxation

Tax systems loaded with carveouts reward the people who can hire the best experts to navigate them. High rates plus Swiss-cheese loopholes do not produce equality. They produce lobbying. If lawmakers want more fairness, the answer is simpler and more neutral taxation that stops picking winners and losers.

Regulation

This is the quiet cartel-maker. Complex rules do not crush giant firms first. They crush the next competitor. Licensing, zoning restrictions, compliance mandates, and paperwork costs operate like a moat around incumbents. That means less competition, higher prices, and fewer ladders for people trying to move up.

Monetary policy

Central bank discretion can amplify inequality by inflating asset prices and distorting capital allocation. When money is too loose for too long, assets can surge while wages lag, and the gap between owners and non-owners widens. You do not need a conspiracy theory. You just need incentives and a printing press.

Put these together, and you get a simple but unpopular conclusion: if inequality is your headline concern, you should be far more skeptical of the modern policy state.

A Classical Liberal Approach That Actually Helps People Move Up

The goal is not equality of outcome. That is a slogan that turns into control. The goal is mobility, meaning the ability to improve your life through work, saving, entrepreneurship, and choice.

That requires a strict limit on government spending growth so the state stops sucking the economy’s oxygen. A simpler tax system that lowers the penalty on work, saving, and investment. Deregulation that targets barriers to entry, especially in sectors where families feel crushed. Clear fiscal and monetary rules that stop politicians from buying today with tomorrow’s prosperity.

If someone still insists that “inequality proves capitalism failed,” point them to the global convergence evidence in Brookings and the mobility-focused reality behind the Our World in Data bottom-40 growth rates. Then ask the question that separates economics from activism: if government expanded massively and the best eras of poverty reduction were still powered by growth, why are we so confident that more government is the answer?

The punchline is not “stop caring.” The punchline is “stop being fooled.” If you want a world where more people can thrive, the most reliable path is still the boring one: freer markets, real competition, and hard rules that prevent government from rigging the economy while claiming it is saving it.

Originally published on The Daily Economy.

Free-market capitalism still delivers the goods. But its political coalition is fracturing — and that should worry anyone who cares about prosperity and freedom.

Recent Gallup polling on Americans’ views of capitalism and socialism shows that just 54 percent now view capitalism favorably, the lowest Gallup has recorded. Views of socialism remain much lower at 39 percent, but the direction matters. Support for capitalism has fallen notably over time, especially among independents and younger Americans.

The partisan breakdown is even more revealing. Republicans remain strongly pro-capitalist, though support has softened slightly. Independents now only narrowly favor capitalism. And among Democrats, fewer than half view capitalism positively, while nearly two-thirds view socialism favorably. As earlier Gallup polling on capitalism and socialism shows, this pattern has been developing for years.

Here’s the hard truth: those of us who defend free-market capitalism are unlikely to persuade most Democrats anytime soon. The data confirm it. Democrats often like the outcomes of capitalism — jobs, innovation, higher living standards — but reject the label, associating it with inequality or corporate power.

That alone wouldn’t be alarming. Political disagreement is normal. What is alarming is where capitalism is losing ground next.

A System of Liberty, Not Privilege

True capitalism is grounded in private property, competitive markets, voluntary exchange, and the rule of law. It treats individuals as decision-makers in their own lives — not subjects of top-down control. It decentralizes power, rewards value creation, and invites experimentation, allowing people to say “yes” to opportunity without asking permission from bureaucrats or politicians.

This idea is old — and proven. Adam Smith’s explanation of voluntary exchange captured it 250 years ago in The Wealth of Nations: “it is not from the benevolence of the butcher, brewer, or baker that we get our dinner, but from their regard to their own interest.” In a system of voluntary exchange, people seeking to serve themselves must first serve others. Prices convey information, profits signal value creation, and losses expose waste — the core of the price mechanism in a free-market economy.

The process isn’t perfect, but it’s far superior to the alternatives. As Milton Friedman argued in his critique of big government, markets work because they respect people’s ability to decide, adapt, and improve through cooperation — not central command.

The Real Warning in the Gallup Data

The most troubling signal in the Gallup polling isn’t Democratic skepticism. It’s the erosion among independents and younger Americans — groups that historically decide elections and shape long-term political trends.

Independents still lean pro-capitalist, but their support has fallen. Younger Americans overwhelmingly support small business and free enterprise, yet are increasingly ambivalent toward “capitalism” as a system. That suggests confusion, not rejection.

Even more concerning is what’s happening on the right.

A growing faction of Republicans — often labeled “national conservatives” or “populists” — is openly abandoning free-market principles in favor of state-directed outcomes. They argue for industrial policy, trade protectionism, expanded subsidies, and heavier regulation, all justified as necessary to achieve cultural, national, or political goals.

This matters because it breaks the traditional coalition that defended markets across parties.

When Both Sides Drift Toward Bigger Government

Gallup’s data show Americans are overwhelmingly positive toward small business (95 percent) and free enterprise (81 percent), while holding deeply negative views of big business. That gap tells us people still believe in markets — but not in a system that feels rigged and political.

The left responds by calling for more government control. Some on the right now respond by calling for different forms of government control. The mechanism is the same.

Whether it’s progressive redistribution or nationalist industrial policy, the solution offered is top-down power — politicians picking outcomes, overriding prices, and directing capital. History shows this doesn’t fix capitalism’s problems; it replaces markets with politics.

As the fallacy of corporate subsidies makes clear, once the government starts steering the economy, competition weakens, insiders win, and ordinary people lose. Bigger government doesn’t become more precise — it becomes more entrenched — regardless of which party is in charge.

Capitalism’s Problem Is Not About Performance

The Gallup results don’t show a rejection of capitalism’s benefits. They show a rejection of cronyism mislabeled as capitalism. Americans like choice, competition, small businesses, innovation, and opportunity — all products of free-market capitalism.

What they don’t like are bailouts, favoritism, barriers to entry, and rules that protect the powerful — outcomes caused by policy distortions, not markets. Policies such as occupational licensing that create barriers to opportunity or housing restrictions raise costs and block entry, especially for younger Americans. When those failures are blamed on “capitalism,” skepticism grows.

This is why the fight matters most outside the Democratic base. If independents, young people, and market-friendly conservatives drift toward bigger government — just with different slogans — the long-run prospects for freedom dim.

The Moral Case — and the Evidence

Beyond efficiency, capitalism rests on a moral foundation. Markets respect individuals’ dignity to pursue their own conception of the good life. They reward service, not status. They generate progress through experimentation and feedback. And they decentralize power, protecting against tyranny.

The evidence is overwhelming. In 1820, more than 90 percent of the world lived in extreme poverty. Today, that figure is under 10 percent, as shown by data on extreme poverty over time. Life expectancy has doubled. Child mortality has collapsed. Access to goods and services, once considered luxuries, has become common.
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What drove this transformation? Not redistribution or industrial planning. It was the spread of market institutions: open trade, secure property rights, sound money, and the freedom to invest and innovate. The comparisons are instructive — East v. West Germany, North v. South Korea, Venezuela v. Chile. Where markets are embraced, prosperity follows. Where they’re suppressed, poverty and repression prevail.

Reclaiming Capitalism

The polling tells us the challenge ahead is not convincing Democrats who already favor more government. It is rebuilding confidence among the persuadable middle and preventing the right from abandoning markets in favor of control.

The path forward isn’t to redefine capitalism, but to reclaim it: restore sound money, limit government favoritism, secure property rights, open competition, and remove barriers that trap workers and families. And we must explain — not just defend — why free-market capitalism remains the best path to prosperity.
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Public skepticism is rising, yet the moral and empirical case for capitalism has never been stronger.

​Washington never runs out of ideas for spending money it doesn’t have.

This episode of the Let People Prosper Show takes on one of the latest examples: so-called “Trump Accounts.” Marketed as a pro-family, pro-capitalism idea, they’re actually another case of federal social engineering through the tax code—layered on top of an already broken fiscal foundation.

To unpack it all, I sat down with Veronique de Rugy, one of the sharpest and most honest fiscal minds in America. She’s the George Gibbs Chair in Political Economy at the Mercatus Center and a nationally syndicated columnist who has spent her career calling out budget gimmicks, cronyism, and policies that trade long-term prosperity for short-term politics.

She was last on the show in Episode 102, discussing immigration and American values. This time, we dive into deficits, tariffs, inflation, entitlement pressure, and why Washington’s obsession with using the tax code to “fix” social problems often makes things worse.

🎧 Watch or listen to the full episode on ⁠YouTube⁠, ⁠Apple Podcast,⁠ or ⁠Spotify⁠, and visit ⁠my website vanceginn.com⁠ for more information about my work at Ginn Economic Consulting.