Falling for Socialism

Gen Z’s rage should be against cronyism, not capitalism.

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Commentary

Across college campuses, on TikTok feeds, and in everyday conversations, a familiar narrative is gaining steam: Capitalism is broken.

Rising rents and stagnant wages fuel the claim among some young people that free markets have failed an entire generation. According to a 2024 poll by the Institute of Economic Affairs, more than 60 percent of young Britons now view socialism favorably. In the United States, the trend is similar, with Generation Z increasingly skeptical of capitalism’s promises.

But much of this idealism is rooted in distance—many of the young people romanticizing socialism have never lived through the economic dysfunction or political repression it often brings. For those who experienced Soviet shortages, Venezuelan collapse, or East Germany’s surveillance, the word “socialism” doesn’t suggest fairness or opportunity—it suggests fear, failure, and control. There’s a reason so many fled those systems to come to freer countries. What sounds utopian in theory has too often turned dystopian in practice.

But blaming capitalism misses the mark. The real culprit is cronyism, the unholy alliance between big government and big business that twists markets, blocks competition, and rewards political connections over genuine innovation.

The Myth of Market Failure

Capitalism, in its true form, is based on voluntary exchange. It rewards businesses that meet people’s needs and wants, with consumers deciding what succeeds and what fails. Competition drives improvement, innovation, and lower prices. No one is forced to buy or sell anything; choice reigns.

Cronyism is a different beast altogether. In a crony system, businesses succeed not by serving customers but by lobbying politicians. Profits come through subsidies, bailouts, and regulations designed to crush competition.

The 2008 financial crisis, often cited as proof of capitalism’s failures, actually showcased what happens when markets are rigged. Reckless banks, instead of collapsing as they deserved, were bailed out with taxpayer money. Ordinary people lost jobs and homes, while the politically connected survived and thrived.

This wasn’t free enterprise. It was cronyism.

The COVID-19 pandemic provided a grim sequel. Small businesses were forced to shut their doors under government mandates. Meanwhile, corporate giants such as Amazon, able to operate under looser restrictions or pivot online, soared to record profits. Policies, written in the name of public health, often privileged the biggest players while leaving Main Street devastated.

Cronyism on Both Sides of the Atlantic

Cronyism is not limited to one country or one political party. Across the United States and Europe, the symptoms are the same.

In the United States, Canada, and the UK, the dream of homeownership slips further away for young people. Sky-high housing prices are blamed on “market failure,” but the real cause lies in layers of government-imposed barriers: restrictive zoning laws, burdensome permitting requirements, and endless bureaucratic delays. Big developers who can afford to navigate or influence the system survive. Everyone else gets locked out.

In Europe, the pattern repeats. France’s labor laws, designed to protect workers, instead stifle opportunity. Hiring becomes risky and expensive, especially for young people. Large corporations, with the resources to manage compliance costs, consolidate their dominance. Small firms and start-ups never get off the ground.

There’s also a persistent myth that big business fears government intervention. In reality, the largest corporations often embrace it, because it keeps them on top. Tech giants such as Facebook and Google now lobby for more regulation, knowing that complex new rules will strangle smaller competitors who can’t afford fleets of compliance officers. Green energy subsidies, meant to combat climate change, often end up showering billions of dollars on well-connected firms while locking out emerging innovators.

Cronyism doesn’t reward the best ideas. It rewards the best lobbyists.

Why Gen Z’s Frustration Is Justified

Gen Z values fairness, creativity, and freedom—the very principles cronyism undermines. When political influence matters more than merit, and when success depends on government favoritism instead of consumer satisfaction, opportunity shrinks and innovation slows. But they are wrong when they think that “socialism” would be a better option, not least because of the rampant cronyism that has existed in every socialist state.

The temptation to seek salvation through government power is not new. The Soviet Union began with a promise of equality and delivered oppression and scarcity (for everyone except the party elites). Venezuela promised 21st-century socialism and delivered hunger, economic collapse, and political repression. Meanwhile, countries that embraced market freedom—even imperfectly—created unparalleled prosperity. Free markets have lifted billions of people out of poverty and unleashed innovation that has reshaped the modern world.

Markets aren’t flawless. But they leave the door open for anyone to succeed, not just those born into privilege or connected to power.

Aim Your Anger at the Right Target

Gen Z’s frustration is real, and it deserves an outlet. But the answer is not to tear down capitalism; it’s to tear down cronyism. A freer, fairer future depends on separating business from political power, not binding them closer together. It means ending corporate welfare, simplifying the rules of the game, and making sure that competition, not connections, decides who wins.

The fight for fairness is worth waging. But it must be aimed in the right direction. If we rage against cronyism, not capitalism, we can build a future in which innovation thrives, opportunity is real, and every member of Generation Z has a genuine chance to rise.

From the Foundation for Economic Education

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.