Capitalism is the worst economic system

In 1947, Churchill said, ‘“democracy is the worst form of government, except for all those others that have been tried.”’ When quoted, people often leave off “that have been tried.” In subsequent years, this has been corrupted and paraphrased into, “capitalism is the worst economic system, except for all the others.”

I wish I knew who it was that first turned Churchill’s statement about government into one about economics. I have heard or read this statement repeatedly through my life, and have always assumed that it was coined by one of the world’s great quotable thinkers – Lincoln, Churchill, Confucius, Edison, Einstein… As a quote, it’s great – it hits all the best qualities of a quotable quote. It is pithy, humorous, self-effacing (for capitalists), and seems to evoke a deep truth. In addition to assuming it was created by a great thinker, I have always taken it to be true. However, I now believe that it may be one of the most destructive utterances of modern times.

[Side Note: I have tried to find the original source of that quote without success. Thus, it is possible that the capitalism quote predates Churchill’s quote about democracy, and Churchill converted a statement about economics into one about government. However, I doubt that. The democracy quote sounds so Churchillian. Also, every reference to the capitalism quote says that it comes from Churchill’s. Further, it is possible that the capitalism quote is relatively new and that I have not heard it all my life, but rather conflated it with Churchill’s quote.]

Granting to the maxim, “capitalism is the worst economic system, except for all the others”, the weight of a great orator, and easy care-free believability, allows a capitalist like myself the opportunity to ignore the possibility that another economic system, tried or not, might, indeed, be superior.

I believe that all but the staunchest Libertarian or Anarchist will agree that selfishness is part of human nature. I might give generously to the welfare of others, but only after I have secured the wellbeing of myself and my family (or tribe, or race, or nation.) Further, I fully believe that, for whatever reasons, some people are vastly more self-interested than others. Indeed, some people appear to feel that they must diminish the welfare of others in order make themselves greater. Sociopathy exists. It is a given that humans lie, cheat, and steal. We know there are people that will work for their own interests without a care for the cost to others, present or future. We also know that there those who will actively work against the interests of others.

Given these truths, modern capitalists admit that there needs to be some regulation of business to keep things tolerable (even if it might be a façade to simply make us feel like we are doing something noble.) Capitalists tend to believe that there is a dark side to monopoly power; that there are some industries (e.g. water distribution infrastructure) that are “natural monopolies”, and thus can be given into the hands of government or forced to endure greater regulation; and so forth.

The trick, the capitalist would say, is finding the right balance between regulation that constrains the evils that lurk in the hearts of men, and regulations that put an excessive burden on free markets. If capitalism is failing in any way, it is not because it is fundamentally flawed, but rather that we haven’t correctly balanced regulation with laissez faire.

I have basically believed this my whole life, bolstered by that pithy maxim that capitalism is less bad than any other system. But I have changed my mind. Maybe capitalism isn’t the worst except for all the others. Maybe there is a system that is less bad than capitalism. Maybe it is socialism, or (shudder) communism, or maybe it is a system that has not yet been tried.

I don’t know how to change our economic system(s) to create a better, more caring, less harmful social framework. But I do know that we must expel the terrible notion that is embodied in the quotation, “capitalism is the worst economic system, except for all the others.”