Below is my column in The Hill on the importance of capitalism to not just the foundation but the future of our Republic. The Trump Accounts could prove critical in the revival of capitalism in the United States.
Here is the column:
Capitalism is under attack from classrooms to town halls to voting booths. According to polls, a rising segment of the population is calling for socialism or even communism as young people embrace a radical chic in the country. And this week, another socialist looks ready to join a growing “squad” in Congress.
On our 250th anniversary, the fight over capitalism and economic freedom could prove critical to the future of this republic. However, there is an unexpected change that could help reverse this trend.
Treasury Secretary Scott Bessent recently announced that one million families have already signed up for the new tax-privileged Trump Accounts, which will be seeded with $1,000 in taxpayer funds for children born between Jan. 1, 2025, and Dec. 31, 2028.
With an anticipated 25 million participants, the initiative is one of the most ambitious and potentially impactful in U.S. history. But its true impact may be far greater than the wealth that it could generate for families. It may just be the determinative factor in preserving this Republic in this century.
This month, Simon and Schuster released my new book on the founding and the future of the American republic — “Rage and the Republic: The Unfinished Story of the American Revolution.” The book asks whether this unique republic can survive in the 21st century amid growing economic, political, and social challenges.
What many celebrating our 250th anniversary do not appreciate is that this is also the 250th anniversary of Adam Smith’s Wealth of Nations, released around the same time as the Declaration of Independence. The book was not a great success in Great Britain. In addition to its foundational support for capitalism, it challenged the mercantilist policies of the British Empire and supported the claims of the colonies in seeking greater economic freedoms.
Smith, however, was immediately embraced by the founders, who saw his work as the perfect economic theory to advance their political theory. Ours was the first Enlightenment Revolution based on a belief in natural rights that came from God, not governments.
Yet, the founders knew that true individual liberty could not be achieved without economic freedom. Smith’s idea of the “invisible hand” offered an idea of individual economic freedom where whole economies were driven by the individual tastes and choices of citizens.
The combination would prove transformative, as the U.S. became not only the world’s oldest large-scale democracy but also history’s greatest economy. We will need that combination in the years to come to maintain what I call a “liberty-enhancing economy.”
The book looks at the expected impact of new technology, from robotics to AI, in the possible creation of a large population of unemployed, unproductive citizens. The question is how the likely state support for a large segment of our population will change their relationship to the government, changing the dynamic of what it is to be a citizen.
The danger of a “kept citizenry” is that we will lose the essential independence that our founders wanted to instill in new Americans from their government.
As we face these challenges, we are seeing a rise in support for socialism and communism in the West. It is the rage among young people who have no experience or memory of the socialist governments that collapsed in the prior century. Their understanding of socialism comes from armchair revolutionaries in colleges and the sloganeering of figures like Zohran Mamdani about introducing them to “the warmth of collectivism.”
That brings us back to the Trump accounts. The insidious aspect of past socialist systems is that their consistent failure often resulted in demands to “double down,” to increase state subsidies, nationalizations, and central planning. For their part, citizens can become accustomed to government support.
When socialist François Mitterrand came to power in France in 1981, promising a “rupture with capitalism,” he quickly destroyed the country’s economy. However, he continued to dazzle French citizens with promises of free money, even appointing Andre Henry as the Minister of Free Time to assist citizens in their new socialist leisure.
The same seductive appeal is evident today in the U.S. and other Western countries. Sixty-five percent of Democratic voters have a favorable view of socialism. An even greater percentage of young Britons want to live under socialism, and 72 percent favor nationalization of industries.
Capitalism was key to the success of the American Republic, and it will be even more important in the coming years. As jobs are wiped out through robotics and AI, we will have to shift to homocentric jobs and productivity to preserve not just economic but also political liberty.
We cannot preserve that liberty as some arts-and-crafts citizenry, entertained with state-subsidized leisure and distractions. The $6.25 billion gift of Michael and Susan Dell (now augmented by dozens of corporations) could offer the single best hope for the survival of our system. Millions of young people will be able to experience the benefits of investments, savings and, most importantly, economic independence.
It has the benefit of being a tangible lesson about capitalism — not simply an abstraction pulled from the pages of the Wealth of Nations. As socialist experiments replicate the failures of past eras, these accounts will offer a stark contrast for a rising generation. It is an investment that must be extended beyond 2028 to inculcate values of economic and political independence in the 21st century.
For young Americans, there has been a continual barrage of anti-capitalist sentiments. However, there is still muscle memory in this country of the gifts that free markets brought to a free people.
Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”
I’m all for capitalism. But it needs to be modified. To pick a pair of examples,
Google and Amazon built their global empires by reinvesting profits as pre-tax business spending. Look at the havoc. Malls and retail gone, information controlled by three major corporations, and China has us in their bullseye.
This is our American success story.
It is my belief that there should be a tax burden prior to expansion investment, thus encouraging distributions as dividends. This is not Adam Smith’s America anymore. It is self funded retirements, Social Security, medical expenses, and rising state and local taxes to replace revenue generators who vanished. Our solution? Bring in cheaper and cheaper labor!
Excessive efficiency can starve a country.
In less than 10 years, when your children might need employment, experts predict A.I. (Artificial Intelligence) could replace more than 50% of every job in the United States.
Without common sense government regulation, this would likely result in the next economic Great Depression.
What would happen first is that the Stock Market would reach record highs – huge profits for corporations’ shareholders by eliminating most human employment.
The “Demand-Side Economics” – unemployed consumers without spending money would quickly collapse Wall Street after the boom. This was one of the top causes of the Great Depression in the early 1900’s.
A.I. could be great curing cancer, Type 1 diabetes, Parkinson’s, etc., but without sufficient government regulation it will destroy the economy here and abroad. This warning was recently made by the CEO’s and founders of A.I. companies.
We may be seeing this happen already, Trump’s tariffs are not resulting in huge hiring of “human” workers. Corporations are instead automating with A.I. and robots – not hiring more human workers.
Capitalism only benefits working class Americans with sufficient government regulation.
Socialism is not the answer. But, neither is closing one’s mind to the glaring challenges of regulated capitalism. Feel free to label these “imperfections” — but not if that’s a euphemistic token of resignation to just accept the status quo:
• half of young adults don’t feel economically strong enough to enter into marriage
• too many who are married have decided raising children is way beyond their means
• the political majority feels no longer powerful enough to regulate harmful corporate overreach
– our privacy rights are put up for sale in a vast info-broker market
– our children are groomed into social media and video-game addicts
– chemical giants are allowed to poison the environment with forever chemicals decades after the risk is exposed
– young adults are lured into habitual online gambling
– the tobacco giants can reinvent addiction products (vaping, nicotine drinks) as quick as old ones are outlawed
– privacy-invasive software is allowed to spill over into our TVs, personal vehicles, vacuum cleaners…
– AI is destroying livelihoods, making children lazy about learning, and weakening corporate accountability
– Congress is bought off at every stage of possible corrections by corporate lobbyists
The idea that American capitalists have to subordinate their business plans to majority political will is a joke. They only have to live under laws that were devised for a bygone past with natural technological barriers — ones now removed.
Majority will is having a hard time boxing in anything new in the past 40 years.
A pitted deathcage fight between capitalism and socialism is a futile dichotomization trap — nothing more than escapism on both sides. We know that pure capitalism and pure socialism each are exercises in overreach and lead to exploitation, subjugation and loss of freedom.
I thought we had learned coming out of the Teddy Roosevelt years that regulated capitalism was a necessary adaptation to prevent it from cannibalizing a culture steeped in morality and goodwill towards others.
Nothing has changed in that conclusion — except huge, wealthy corporations are once again able to overpower the will of The People in deciding what is good for society. We’re once again finding that votes cast every 2 or 4 years are no match for lobbyist gifting every day of the week.
And that loss of People power is what the left wants to fix — by giving absolute power to “reformists” who have no appreciation for the good that comes from freedom to innovate and be rewarded for it.
It’s the fact that conservatives are conflicted about making calibrated, systematic improvements to regulated capitalism in realtime ( keeping up with technological change ) — that opens the door for revival of 1930s leftist derangements. We’re blindly walking into a dichotomization trap that is self-defeating.
Pbinca: Some of what you say seems correct but this statement is questionable: “The idea that American capitalists have to subordinate their business plans to majority political will is a joke.” Bud Light, Target, and Cracker Barrel in the recent past learned how the majority political will can still affect profits and earnings.
Must see documentary “Saving Capitalism”: a non-partisan documentary starring conservative Republicans and Bill Clinton’s former economy advisor (the last president to balance the national budget deficit).
The take away, capitalism only benefits the American working class with some government regulations and rules of the road. Capitalism without rules would destroy the middle class of America.
“The take away, capitalism only benefits the American working class with some government regulations and rules of the road. Capitalism without rules would destroy the middle class of America.”
What does this mean ?
Absolutely we need laws. But there is absolutely no positive good EVER served by ANY government involvement specifically in the economy.
What are normally called regulations – economic laws, efforts to control capitalism are ALWAYS negative.
Myriads of economist have proven that in theory and in practice over the past two centuries.
Coases law won a nobel for exactly that proof.
There are 4 requirements from government.
National defense.
Punishing the initiation of force or fraud against others – criminal law.
The use of force to compel those who freely enter agreements to keep them – contract law.
The use of force to compel those who directly harm others to make them whole – Tort law.
Torts are the ONLY legitimate regulation of the economy.
Key to the rule of law portions of all of the above is that they are all a posteriori.
They punish conduct that has already happened,
they do not perscribe non violent conduct a priori.
I would further note that in every case where you can point out some regulation of capitalism that you think has been beneficail.
The exact same benefit has occured elsehwere in the world without any laws.
Why ? because every single “regulation” that we think has been beenifical or successful is really just a luxury that we become able to afford with higher standard of living.
Child labor as an example is the norm everywhere and throughout history -until standard of livinng rises sufficiently that we do not need it and benefit little from it – then it is gone – laws or no laws.
OSHA and workplace safety laws in the US today have pretty close to ZERO relevance.
Nearly every business has heir own worlplace safety laws that are better tailored and more effective.
Why ? Because employers get sued when workers are injured – torts,
and even more consequential because losing skilled workers does significant harm.
Most every employer of non-adminstrative labor has XXX days since last time lost accident signs up all over.
And they reward teams for avoiding time lost accidents
Not out of altruism – but because the loss of skilled labor is expensive.
Capitalism does NOT need regulation and all regulation of capitalism outside the very limited rule of law is not only unnecescary but harmful.
Smith said that it is not the altruism of the baker or butcher that puts the food on our tables, but the self-interest of the baker and butcher to put food on their tables that motivates them. This simple and self-evident claim undermines the free market and shows the fallacy of collectivism. Remove the motivation for me to put food on my table, and quickly you shall have none either. Interestingly, if you look at the handful of models of communism in the world, whether Cuba or North Korea, the biggest public gripe is a lack of food and essentials. In 1997, President Ronald Reagan, upon observing the starvation in Ethiopia, said, “A hungry child knows no politics.” He was not the first or only one to say this, and it is as true today as ever.
I sit here today retired with greater wealth than I ever dreamed possible. I look back at where I started and where I am now and see the mistakes I made and the decisions that led me to this place. I was never an entrepreneur. I always worked for others. One opportunity that placed me on the trajectory that led me here was the creation of the IRA. Even though I made little money at the beginning of my career, the pretax treatment of the deposits was sufficient incentive to start investing in the market through mutual funds. The incentive was curtailed a few years later but it was enough to get me started on my financial education. There were many ups and downs but I stayed the course throughout my working life into retirement. I came to understand that wealth creation was really about the production of goods and services to meet the needs of others. Money is just a measure of how well you did that. A dollar in the hand of the one that earns it is economic freedom because he chooses how it is spent. That same dollar in the hand of government was taken from the labor of others and makes us less free. I liken government to a bathroom in a business. It is a necessary expense but contributes nothing to the wealth of the nation. It should be kept small, clean and stocked with paper products.
Whaaaat? Can’t you see Smith is a COLONIALIST that advocated for the racist development of the Western World – at least that is what my lefty woke book club agreed was the answer once the bored divorced KARENS told us how to think! Haha, the greatest invention of modern times is the development and flourishment of capitalism and all the silly faux talk of building the Western World on the back of “enslavement” and racist colonialism is pure Bipolar GARBAGE. Not one other economic system can point to a track record of success (Communism – Nope; Socialism- Nope; Shariah – Haha Nope) and HISTORY PROVES IT. All of those systems create HAVES and HAVE NOTS so stop whining about inequity and start thinking and working.
I’m a little confused, the government giving children $1,000 in honor of Dear Leader teaches them independence and freedom, and isn’t socialism? Maybe the kids can use the money for a couple weeks of daycare or give it to Dad to cover that month’s health insurance
Prof. Turley
The disruption from technology such as AI today will be no more consequential than the disruption from spinning jennies or industrialization in Adam Smiths time.
Technology does not drive free markets – Free markets drive technology.
Standard of living = production of what we need / human effort needed to produce.
Rising standard of living REQUIRES producing more with less human effort.
rising productivity means rising standard of living.
If you are doing the same thing in the same way for 20 years,
you should not expect your wages to rise, or your life to improve.
AI or ANYTHING that significantly decreases the human effort to produce does NOT raise standard of living.
Standard of living rises when the human resources that are freed by AI are put to other uses – any other use.
But standard of living rises the most if those freed resources are put to uses that humans value greatly.
Nearly every major technological advance has lead to the fear of a large unemployed class that would have to be subsidized
This has never happened. The disruption of human resources that occurs as a result of huge technological advances in productivity
is real, but it is also temporary
One of the corollaries of the laws of supply and demand is that supply creates its own demand.
When a mexican farmer kills a chicken for dinner – 50% of that chicken goes into the garbage when he is done.
When Tyson foods, processes a chicken – 99% of the chicken turns into a product.
The parts that do not become chicken nuggets or boneless things and breasts, turn into dog food or fertilizer or myriads of other products.
In some cases those products are even sold below cost – because it is cheaper to lose money selling them than to haul them away as garbage.
Regardless the point is that “Supply creates its own demand”
An oversupply of human resources will ALWAYS be put to some productive use – and that – not AI or technology is what will raise human standard of living.
This threat to Western Civilization began, of course, with Karl Marx, and received new life in the 1960’s with the emergence of the NeoMarxism of the Frankfurt School, with such enemies of Freedom of Speech such as Herbert Marcuse, who came to the USA, inspiring the radical Left, such as Tom
Hayden, the SDS, and the Weather Underground, now allied with politically correct identitarian politics which is marching through the universities, DEI saturated bureaucracies, the mainstream media, and the Democratic Party. It has further allied with Radical Islam, in the Red/Green intersectional Axis of Evil, bent on destroying Western Civilization, and establishing their respective dystopian dictatorships. This despite the fall of the Berlin Wall.
The Clash of Civilizations is upon us, and the Barbarians are inside the gates.
May the Enlightenment Ideals of Freedom and Liberty continue to shine, and defeat these benighted forces attempting to establish their respective benighted dystopian dictatorships.
Have any of you read the Honor Harrington series of fiction. It was written in the mid 90’s. It speaks to live under socialism.
Every dystopia ever written as well as ACTUAL history speaks to the horrors of life under socialism – whether it is brave new world, Anthem, 1984, animal farm, Atlas Shrugged,
or in real life – The Gulag Archepelego,
Nazi Germany, Stalins Russia, the Khmer Rouge, North Korea, Maoist China
Speaks? No it does not. Socialism was not a concept until Marx made it up.
Perhaps you have heard of the french revolution ? That was an early form of socialism.
Marx did not make up socialism – it significantly predates him.
We need to BREAK Democrats. The plan to decentralize power and Defund them!
– Cut 50% of Fed gov spending
– Move 75% of DC to Heartland
– End fed aid cities, states, college, unions & non-profits
– Cut SNAP 75%
– 2% tax Gross wall street trans & money goes offshore
– 20% duty on ALL imports
– Tax all non-profits anyone gets $100k: colleges, hospitals, etc
– Remove tax credits renewables, affordable housing, etc
– Jail Trump persecutors & Dems protectors, illegal helpers, etc
– Outlaw public union, they are a political army for democrats
– Ban union/company $ politics, only voters can fund politics
– voting 1 day, in person, with ID, I don’t care if you vote, I care if you cheat
– 12 year limit on federal office….judge, president, senate, congress
– Roundup all illegals to raise wages and give Americans Jobs
– END all bonuses financial world till every dime of FED money is paid off
We can certainly hope for at least some of these.
– Cut 50% of Fed gov spending
A start
– Move 75% of DC to Heartland
yup Government needs to reflect the people.
– End fed aid cities, states, college, unions & non-profits
Simplify – End Federal Aid
– Cut SNAP 75%
100%
– 2% tax Gross wall street trans & money goes offshore
nope. You can not prevent the flow of capital, and overall you WANT the freest flow of capital that you can get.
If you make it hard for capital to get out of the US you will make it less likely to come to the US.
Trump has purportedly secured $16T in investment in the US.
We WANT that capital to start russhing out when left wing nuts start making poor choices.
Just as we do not want to interfere with the capital flight from blue states and blue cities.
Capitalism is the carrot and the stick – it rewards everyone – including government for wise choices and punishes them for bad ones.
– 20% duty on ALL imports
NOPE.
We must pay for government somehow, Sales taxes are the most efficient and least economically damaging way to do so,
Tarriffs are a limited form of sales tax. Trump has proven that Tarriffs are among the least damaging form of taxation.
So yes, the funding of government should be by taxes like sales taxes.
All taxes are economically damaging. protectionist tarriffs have proven to damage the industries they protect.
While the goal should be zero or very low tarriffs, Trump does have one thing basically correct.
Tarriffs should be reciprocal – you lower yours we lower ours.
And the goal should be lower not higher.
– Tax all non-profits anyone gets $100k: colleges, hospitals, etc
What does this mean ? Taxes are generally on profits, if an organization is a non-profit – then it has nothing to tax.
While we should not have taxed and tax exempt institutions,
In truth we should not tax businesses at all.
We should have a single tax scheme, not multiple ones,
That has the least unintented consequences
and we should fund government exclusively through sales taxes.
We want zero tax on investment.
– Remove tax credits renewables, affordable housing, etc
Ena ALL subsidies.
– Jail Trump persecutors & Dems protectors, illegal helpers, etc
NO!
Jail lawbreakers. Full due process, and zero concern for politics.
Enforce ALL laws and get rid of laws we do not enforce.
– Outlaw public union, they are a political army for democrats
They are just a bad idea.
– Ban union/company $ politics, only voters can fund politics
NO! Government shoudl stay completely out of how people spend their money.
– voting 1 day, in person, with ID, I don’t care if you vote, I care if you cheat
Absolutely.
– 12 year limit on federal office….judge, president, senate, congress
should be 20 years, but include ANY position that gets a government pay check.
– Roundup all illegals to raise wages and give Americans Jobs
Just not practical. Trump is deporting bout 1M/year.
There are between 35-45M illegal immigrants in the US.
We have fairly effectively shut the border. We should continue that.
That is really important.
We should continue the deportation of illegal aliens that commit crimes.
as well as those caught as we seek and deport those who commit crimes.
We should continue to encourage Self deportation.
But we actually MUST increase legal immigration.
Currently legal immigration into the US is about 1M/yr it must minimally be 2M/yr and probably close to 3M/yr
Mass illegal immigration has negatively impacted the US working class.
But in reality we have more jobs that current citizens can fill, and contra Turleys claims about AI,
We will ALWAYS benefit from more human resources. We just must do so legally.
– END all bonuses financial world till every dime of FED money is paid off
Again – the government should stay out of things that are not any of its business
Maybe the youth of today should study the life of Eugene V. Debs. He also started out as a Democrat and ended up running for president as a socialist 5 times.
You also forgot to mention the failure of the Labor Party in the UK. They basically replaced the Liberals as opponents for the Conservatives. They won Parliament in 1945 and then a series of Labor governments started seizing major industries such as railroads and coal and rapidly contracted the economy of the UK (some people would say they almost destroyed it) before the conservatives got their act together and unraveled the Labor program. They gave Labor such a bad name that Tony Blair had to rename it New Labor and promise they were not socialists. And they are trying to do it again. I guess the only cure for socialism is to live under for awhile. The only problem with Socialism is that once you’re in the program they bring out the big guns to force you to stay in until you have to have another revolution. They really don’t like to give up power once they have it.
Remember NAZI meant the National Socialist German Workers Party (a favorite of Adolph and his boys)
The Wealth of Nations should be required reading in every high school. It’s long, but it’s readable, and it gives a basic grounding in common-sense economics.
How is it that the Ivy League students are so much more easily seduced by socialism than the lower income kids at state schools and trade schools? Even with the current problems at the Ivy League, these kids can walk into great jobs because of capitalism, yet they rail against it. They are cutting off their own nose to spite their face. Turning out kids like this is another failure of our elite schools.
“. . . Trump Accounts, which will be seeded with $1,000 in *taxpayer funds* . . .” (emphasis added)
A number of Trump policies are pro-capitalist, e.g., a dramatic reduction of government regulations, and a hefty tax cut.
But those Accounts are not one of them. They are a wealth redistribution scheme — aka a *socialist* policy.
Young people are free to embrace Socialism when Capitalism has provided them previously unimaginable material benefits.
Morning Prof. Turley. Is this a guest writer? One of your students’ essays?
Turley was interviewed recently and expounded pretty much this theme.
He claimed to have always had an interest in economics and free markets.
He was also self identifying more as conservative/libertarian than liberal.
Purportedly there is significant similar material in his new book.
From what I have seen his interested and understanding of free markets is relatively new.
While I have not perceived him as a socialist or communist, he has come off as a traditional
60’s liberal who sees government and government benefits having a significant role in the economy.
The failure of every singly facet of the economy that government significantly involves itself with should disuade anyone of
that quasi socialism.
If you want something to be good and affordable – keep government as far from it as possible.
Government has had minimal involvement in advanced technology and the results are incredible value for humans dirt cheap.
The greatest threat to human advancement right now is Washington DC taking the slightest interest in AI or technology.
Nothing will stiffle the benefits more than government help.
Our poorest performing institutions – healthcare and education – both of tremendous importance are also the most heavily entangled with government.
The rise in standard of living delivered by free markets is directly proportionate to the freedom of the markets.
Economic studies throughout the world, and accross the past 250 years prove that true ALWAYS AND EVERYWHERE
Queue Olly please.