The very prosperity created by capitalism can obscure its benefits, fueling discontent even when we’re much better off.

Recently, as I sat in my small undergraduate economics class, another student raised his hand to share a thought about the current state of markets. Though quite well-spoken, he quickly began expressing disdain for the system of capital markets that has created the prosperity and flourishing of modern life, encapsulated in the oft-cited sentiment that “the elites are getting richer while the rest of us are held down!” 

The student cited the success of entrepreneurs such as Jeff Bezos and Elon Musk, along with the growth of wealth inequality in the United States and between the developed and developing worlds. This sentiment has only grown in light of political division and rampant populism, and has now spread to both left and right, albeit with different “flavors.” While my classmate may have been speaking to sentiments that are deeply felt for Americans across the political spectrum, the quantitative and qualitative reality could not be further from the truth. In fact, the very market forces now blamed for inequality have quietly delivered more concrete improvements to ordinary life, especially for the poor, than any system in human history. Arguments for aggressive government redress of inequality often risk undermining precisely the innovations that benefit consumers most.

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