Support for small businesses suggests socialism’s shine is overstated

A new Gallup poll finds a record number of Americans support socialism, with 43 percent of respondents viewing it favorably.

Judging by the dozens of breathless headlines , this seems like a significant and concerning ideological shift, especially alongside declining post-pandemic support for capitalism.

But on closer reflection, respondents are likely just fed up with the economic status quo, falsely labeled capitalism, rather than actually wanting more government control over their economic lives.

Ordinary Americans are facing a persistent affordability crisis driven mostly by the costs of healthcare, childcare, housing, and overall inflation. Ironically, these major financial hurdles result from big government and socialist policies, not capitalism.

Consider healthcare, which some polls suggest is Americans’ most significant economic concern. Per capita health expenditures have more than tripled this century. Four-figure monthly insurance premiums and five-figure hospital bills have generated a mass movement to socialize the system under a Medicare for All approach.

Yet the current system doesn’t resemble anything close to capitalism. In fact, big-government regulations that have essentially banned catastrophic insurance, association health plans, and other competing coverage alternatives are responsible for sky-high premiums. Certificate-of-need laws, bans on physicians owning hospitals, and burdensome medical licensing requirements prevent new provider competition.

As a result, hospitals and health insurers have consolidated into expensive oligopolies that can have terrible customer service, hide their prices, and overcharge for basic care and coverage. Such practices would never occur in a free market.

It’s a similar story for childcare, whose escalating costs have led some left-of-center politicians, such as Rep. Ro Khanna (D-Calif.) , to call for socialization. This is also true of housing, whose prices have increased by 60 percent since the beginning of 2020.

However, childcare and housing costs are inflated by countless burdensome state and local regulations that prevent new supply. In childcare, stringent regulations on caregiver ratios, occupational licensing, and square footage lock out competitors. In housing, strict zoning, rent control, eviction, environmental, and labor laws reduce housing stock and drive up costs.

Finally, there’s the runaway prices of general goods and services, which have inflated faster than average wages for most of this decade. Every time an American pays $18 for a burrito, $100 for a few groceries, or $250 to service their vehicle, they are reminded that the economic status quo isn’t working.

Yet rising costs aren’t the result of greedy capitalists. In fact, businesses constantly look for ways to lower prices to attract more customers and increase profits. The prolonged high inflation crushing ordinary families stems from reckless government deficit spending that increases interest rates and the money supply.

Recent federal deficits have approached $2 trillion annually , contributing to the current bond market turmoil that’s boosting borrowing costs and threatening the broader economy and financial system.

To monetize these deficits, the money supply has increased by 50 percent since 2020. More money dilutes the currency already in existence. In the words of Milton Friedman, “Inflation is everywhere and anywhere a monetary phenomenon.”

Expensive socialist programs to address the affordability crisis would only make inflation worse. Existing reckless social spending must end to finally whip inflation.

An honest media, a good education system, and integral politicians are desperately needed to explain these economic nuances. Unfortunately, they demagogue and simplify the issues to advance their partisan and ideological goals. The Democratic Socialists of America have stepped into this vacuum with claims that socialism is the savior — not the culprit — of today’s economic pain.

Nonprofit free-market organizations have never been more needed to educate the public about how socialism takes and capitalism creates.

The Gallup poll includes another finding that suggests support for socialism is overstated: It finds an incredible 95 percent of Americans support small businesses.

Small businesses are the embodiment of capitalism in today’s economy. They are characterized by entrepreneurship, investment, private ownership, competition, and voluntary exchange. They are also on the front lines of the economy and are the hardest hit by socialist policies such as high taxes, burdensome regulations and runaway inflation.

True supporters of small businesses can’t also support socialism — at least in practice.

To preserve America’s wildly popular small business economy, we need more capitalism and less socialism. The effects of such a transformation will be twofold: much-improved economic well-being for ordinary Americans and significantly reduced popular support for socialism.

Elaine Parker is president of Job Creators Network Foundation.