On free markets and capitalism
Every economically developed country (as per the United Nations’ Human Development Index rankings) in the world is essentially capitalist, affording its citizens the fundamental markets freedoms to own, buy and sell. This is despite varying degrees of government intervention and regulation in the economies of these countries.
This map demonstrates how individual countries score on the Index of Economic Freedom, which measures how unrestricted each nation’s economy is. Hong Kong, a city that was a bastion of capitalism during the reign of Mao Zedong in mainland China and continues to boast a highly capitalistic economy today, scores highest. Now here’s the Human Development Index, which measures how developed countries are:
The correlation is self-evident. As of 2019, Hong Kong scores 4th overall on the HDI. The country with the highest score is Norway, which scores the 28th highest on the Index of Economic Freedom, not far behind the United States, a country which some see the extreme scenario of “capitalism run wild”. Switzerland and Ireland, the second and third countries on the HDI, score fifth and sixth for economic freedom respectively.
Nordic countries such as Norway and Sweden are by no means socialist, as some ill-informed individuals both on the economic left and right perceive them as. They are, as much as (if not more so than) the United States, capitalist countries with market economies.
Now, there are without a doubt pros and cons demonstrated by both the Nordic model and the American model.
Nordic countries have comparatively low relative poverty rates. Around 7 percent of people in Sweden and 7.5 percent of people in Norway are in poverty. The US poverty rate was 11.8 percent as of 2018. That said, poverty in the US is on the decline and has been for a number of years (see: Income and Poverty in the United States: 2018). Cost of living in Nordic countries also tends to be higher, however quality of life scores are likewise.
However, the United States boasts a higher average income. The average yearly income in the USA is around $60,000. This compares to around $45,000 in Sweden and around $50,000 in Norway. The average income in Norway is propped up to some extent by its abundant oil reserves, with 6 percent of Norwegians employed in the petroleum industry or related industries. GDP per capita in Norway declined significantly from 2013 to 2016, from $103,000 to $71,000. The US also boasts an unemployment rate (going by pre-coronavirus pandemic figures) which is roughly in line with Norway’s and far better than Sweden’s, which was 6.35 percent in 2019.
Capitalism drives innovation. Most things you own were invented, marketed and sold under capitalism, including your web browser, your phone and your laptop. These things show how people and society prosper when given the chance to do so.