#703
Dear global readers,
In a world increasingly polarized by ideology, I recently found myself riveted by an electrifying conversation between fitness icon Jillian Michaels and the brilliant historian Victor Davis Hanson (VDH). They dissected one of humanity’s oldest debates: Socialism (and its toxic cousins — Communism, Fascism, and hyper-aggressive Nationalism) versus Capitalism. Hanson’s core argument struck me like lightning: these “-isms” are not separate planets; they sit on the same side of the scale — the side of centralized control, coercion, and the crushing of individual agency. On the opposite side, alone, stands Capitalism — imperfect, chaotic, but relentlessly proven.
What chilled me most was Hanson’s observation about today’s young generation in the West. Millions of 18–35-year-olds are drifting toward socialist, communist, or nationalist rhetoric — ironically, the very ideologies their grandparents or great-grandparents fled at gunpoint. From Cuba to the Soviet Union, from Mao’s China to Mussolini’s Italy and Hitler’s Germany, from Venezuela’s collapse to the perennial poverty traps in parts of rural northern India — the trail of broken promises is written in blood and famine. Yet here we are again, watching privileged university students in California or London wave red flags and chant for “equality” that has never once delivered anything but equality of misery.
Why Do Smart Young People Fall for Deadly Old Ideas?
Hanson nails the mechanism, and I agree 100%. It starts in an education system that has abandoned rigor for ideology. Too many teenagers are funneled into low-demand, low-rigor humanities and arts programs that sound noble but leave graduates with crushing debt and zero marketable skills. When reality hits — no job, no purpose, no way to pay rent — resentment festers. Self-loathing follows. And that’s exactly the emotional void that demagogues love to fill.
Enter the socialist, (The AOCs, Mamdanis, Bernie Sanders etc) the communist, (The Kim Jong Uns) the nationalist, (The Modis) the fascist (Thankfully, none in 2025) — all offering the same seductive drug: “Your failure isn’t your fault. The system cheated you. Give us power, and we’ll punish your enemies and hand you the life you deserve.” It feels like justice. It feels like hope. It is, in truth, the gambler’s last desperate throw of the dice after losing everything at the table — almost always ending in ruin.
History is mercilessly clear:
- Communism promised paradise and delivered the Gulag, the Great Leap Forward (50+ million dead), and today’s North Korean starvation state.
- Fascism promised national glory and gave the world Auschwitz and bombed-out European cities.
- Aggressive nationalism (the kind that puts “my tribe above all, forever”) fuels endless balkanization and war.
- Even “soft” socialism, when it dominates, collapses into hyperinflation and ration lines — look at Venezuela (once Latin America’s richest nation) or Cuba, where doctors earn less than tourist-tipping bellboys.
These systems fail for the same structural reason: they suffocate the only force that has ever lifted billions out of poverty — human ingenuity unleashed by individual incentives and free exchange.
Capitalism: The Only System That Rewards Reality
Capitalism is not a utopia; it’s a discovery mechanism. It doesn’t promise equality of outcome — thank God — because humans are not equal in talent, effort, or luck. What it does is ruthlessly reward value creation. Build something people voluntarily want? You eat well. Build something better or cheaper than the next guy? You eat better. Fail to do so? You learn fast, pivot, or get humbled. That feedback loop is brutal, but it is also the greatest anti-poverty machine ever invented.
Yes, the top 1% capture a huge slice today. That’s the price of a system that turns ambition loose. But look at the spillover: the iterative miracles that flow downward over time. In 1980 almost nobody had a mobile phone. Today a street vendor in Nairobi has better real-time information and computing power than the President of the United States had in 1990 — because capitalists competed like mad to sell him that phone for $30.
Capitalism gave us:
- The near-eradiation of extreme poverty worldwide (from 36% in 1990 to under 9% today — World Bank data),
- Vaccines developed in months instead of decades,
- Food so abundant that obesity is a bigger killer than starvation in most countries.
Even Communist China — still ruled by a party that dares not utter the word — has lifted 800 million people out of poverty in 40 years by selectively copying capitalist rules: private property, stock markets, profit motive, foreign investment. Beijing won’t admit it, but Deng Xiaoping’s famous line “To get rich is glorious” was the quiet funeral of Maoism.
China’s Quiet Capitalist Revolution: The Greatest Pivot in Human History
If you need proof that capitalism — even when disguised and half-heartedly adopted — crushes every other system, look no further than China after 1978.
For 30 years (1949–1978) Mao Zedong ran the purest large-scale communist experiment ever attempted:
Collectivized farms
State-owned factories
Central planning
Zero private property
No prices set by supply and demand
Result? Between 1958 and 1976, China suffered the Great Leap Forward (30–50 million dead from famine) and the Cultural Revolution (millions more persecuted or killed). By 1978, average income was ~$150 per year. Life expectancy barely topped 65. Hundreds of millions lived in absolute poverty.
Then came the turning point most people still don’t fully appreciate.
1978–1992: Deng Xiaoping’s “Socialism with Chinese Characteristics” (a.k.a. Stealth Capitalism) Deng never used the word “capitalism” — he knew the Party would revolt — but everything he did was textbook capitalist reform:
Household Responsibility System (1979–1983)
- Farmers were allowed to sell surplus crops on the open market after meeting state quotas.
- Agricultural output exploded 50–60% in just four years.
- Special Economic Zones (Shenzhen, Zhuhai, Xiamen, etc.)
- Foreign companies were invited in with low taxes, private land leases, and profit repatriation.
- Shenzhen went from a fishing village of 30,000 people in 1980 to 18 million and a bigger economy than Portugal today.
- Township and Village Enterprises (TVEs) Local governments and entrepreneurs started businesses that operated exactly like private companies. By the mid-1990s they employed more people than state-owned giants.
- 1992 “Southern Tour”
Deng, now 88, toured the new boom towns and declared: “To get rich is glorious.” That single phrase killed the last ideological resistance.
1990s–2010s: From Cautious Opening to Full-Throttle Embrace
Stock exchanges opened in Shanghai (1990) and Shenzhen (1991).
Hundreds of thousands of state-owned enterprises were privatized or forced to compete.
Private property rights were written into the constitution (2004).
China joined the WTO (2001) → became the world’s factory. (How India missed the bus, sticking to founding fathers' socialistic idealogy!)
Growth Chart 2000-2021 World GDP.
The Numbers Speak Louder Than Any Manifesto 1978: GDP ~$150 billion (smaller than the Netherlands) 2024: GDP ~$19 trillion (2nd largest in the world) 1978: 88% of Chinese lived on less than $1.90/day (extreme poverty) 2020: Officially 0% (first time in recorded history a country of 1.4 billion eliminated extreme poverty) Actual number lifted: ~800 million people — more than the entire population of Europe and the Americas combined. China still calls itself “communist.” The Party still controls politics and key sectors (banks, energy, telecom). But the engine of growth is now unmistakably capitalist: 120+ billionaires in USD terms (second only to the U.S.) Companies like Alibaba, Tencent, BYD, Huawei, and TikTok’s ByteDance — all private, profit-driven, globally competitive 600 million middle-class consumers who buy iPhones, Teslas, and Starbucks Even Xi Jinping, who has reasserted Party control since 2013, has not dared reverse the core capitalist mechanisms. Crack down on tech tycoons? Yes. Ban private profit entirely? Impossible — the economy would collapse overnight.
The Ultimate Irony The Chinese Communist Party remains in power precisely because it abandoned communism in everything but name. The moment it allowed people to own, trade, invest, and keep the fruits of their labor, the greatest poverty-escape in human history began. That’s not a victory for “Chinese characteristics.” It’s a victory for capitalism — smuggled in the back door, wrapped in red flags, and still unstoppable. Whenever you hear someone say “capitalism has failed” or “we need a third way,” just point to China. The third way was tried for three decades. It produced famine. The capitalist way — even the half-hearted, authoritarian version — produced the fastest improvement in human living standards ever recorded.
A Warning and a Hope
To the governments of the free world: wake up. If you let education become ideological indoctrination and allow credential inflation to bankrupt a generation, you are manufacturing the next wave of revolutionaries. Fix apprenticeships, celebrate vocational excellence, cut the bloat in universities, reward STEM and trades again. Give young people ladders, not lectures.
And to my younger readers flirting with “democratic socialism” or “national rebirth”: I get the anger. Life feels rigged sometimes. But please, study the actual track record. Every promise you’re hearing has been tested — exhaustively, tragically — and every single time the bill comes due in tyranny and misery.
Capitalism is slow. It is uneven. It offends our sense of instant fairness. But it is the only system compatible with human nature as it actually exists — diverse, flawed, creative, and hungry for better tomorrows earned, not seized.
I remain optimistic. Truth has a way of winning in the end, even if it takes a few extra laps around the track. The ideas that create iPhones, mRNA vaccines, and global supply chains that feed 8 billion people are not going to lose to the ideas that produced bread lines and concentration camps.
The future still belongs to freedom — to markets, merit, and the irrepressible human spirit.
Here’s to choosing the hard, messy, glorious path that actually works.
With hope from wherever you’re reading this, Karthik
18/11/25
Karthik 11/5/2001, In front of New York Stock Exchange. The symbol of Capitalism.
No comments:
Post a Comment