23 September 2021

Young people aren’t left wing, they just don’t understand capitalism

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It’s no secret that young people don’t really get capitalism. Just over half of Millennials, and just under half of Zoomers, even know the correct meaning of the word, according to research from the IEA. One in four mistake the definition of capitalism for the definition of socialism.

You could be forgiven for thinking that this means young people are instinctively drawn to left wing ideas, but don’t be discouraged. The staggering misunderstandings around economic systems actually suggest there is a large, potentially persuadable population that could be won round to the benefits of free markets with the right arguments.

Much of current left critiques of capitalism are aesthetic, as opposed to intellectual or economic. It is easy to point to high Tory, eccentric fat cats in bowler hats and denounce capitalism as a greedy, voracious beast eating its own tail. Left wing cranks blindly label any kind of injustice as a failure of capitalism and ignore the miraculous innovations it has brought us.

This paper thin rhetoric is epitomised by AOC’s recent Met Gala ‘Tax the rich’ sartorial gesture. In the UK, feats of imagination have seen Jeremy Corbyn cast as a Glastonbury-going, artfully dishevelled, magic grandpa revolutionary, even as the grumpy, drab reality stares us, cock-eyed in the face. This kind of elite virtue signalling might appeal to a certain crowd, but it probably puts off just as many people.

Rather than indulging in similarly superficial stunts, those of us who care about freedom should work to win younger generations round to the ‘choice, power, and individualism’ that market capitalism offers.

Unfortunately, this does not appear to be high on the Government’s priorities. Only 21% of 18-24 year-olds voted for the Tories in 2019, compared with 56% for Corbyn’s Labour. Perhaps that’s not surprising when young people are being taxed as if they have already succeeded, rather than people just starting out in the world. Graduates earning over £27,295 who are also paying back student loans will have a marginal tax rate of 42.25%, similar to what an older person earning over £90,000 pays. Recent policy moves, such as a tax hike for working people and a likely rolling back of planning reforms only add to the impression that the Conservatives are a party for the old. No wonder Dominic Cummings tweeted about the Government making young people ‘work harder to subsidise older richer people’.

What is needed is not bribing northern constituencies with extra government money, but higher wages, greater productivity, more affordable housing and greater investment opportunities. Ultimately, this requires a growing economy, and not one in which the youth are saddled with the debts of the old. With the recent reshuffle, and Number 10 seemingly wanting to change the narrative, intergenerational fairness should be a top priority.

As such, an acknowledgement from Boris that ‘levelling up’ should include extending the benefits of capitalism to younger people would be welcome. Allowing for greater housebuilding, reducing rather than raising the tax burden on the young, more business incentives for innovation, such as cash and prestige prizes, or opening up the student loan system for all young people to use the funds to set up business would all be worth looking at. Instead it feels as though young people are being written off as lost causes, duped by vapid lefty showboating. The Conservatives are the oldest political party in the world, but its continued electoral success isn’t guaranteed if they keep heading along a protectionist, gerontocratic path.

To be clear, the left certainly doesn’t have the answers either. ‘Taxing the rich’ might look good on a dress, but it won’t raise enough revenue to pay for things politicians promise, and many young people instinctively get this. That’s why Corbyn’s pledge of ‘free broadband’, intended as the ultimate Zoomer bait, didn’t fly. People understood that his fluffed together free-stuff frenzy wouldn’t add up.

But Labour’s electoral failure is no excuse excuse to ignore the young. The older voting block is a depreciating asset, and cannot be relied upon. For the good of the economy, and their own future prospects, the Conservatives need arguments and policies that will win over the next generation of capitalists.

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Rebecca Wray is a Research Intern at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.