What kind of economy should America have? In an August Gallup poll, Americans showed less certainty than at any point since Gallup began asking the question in 2010. Only a slight majority (54%) viewed capitalism positively, down from 60% in 2021, the last available survey (meanwhile, 39% of Americans viewed socialism positively). After a decade of relatively stable opinions, what factors could cause such a sharp decline?

The data suggests that politics plays a role. Among Republicans, positive opinions toward capitalism increased from 72% in 2021 to 74% in 2025, while positive opinions among Democrats declined from 50% in 2021 to 42% in 2025 (Independents trended with Democrats, with positive opinions declining from 59% in 2021 to 51% in 2025). Meanwhile, 66% of Democrats held positive views toward socialism, compared to 38% of Independents and 14% of Republicans.

Beyond that, the Gallup poll offers no explanation for why American attitudes are changing. Is the change due to a difference in education among younger Americans coming of age? Is it due to media narratives that seek to redefine the term? Has the character of American capitalism changed?

Definitions

Before attempting to answer these questions, it’s helpful to first define the key terms, as this topic is unusually susceptible to miscommunication based on varying definitions.

First, when many people use the term “capitalism” colloquially, what they really mean is better described as “the free market.” A free market economic system is characterized by the voluntary exchange of goods and services, so called because it is largely free from government coercion. Supply, demand, and the efficient distribution of resources are governed through the price mechanism instead of government interference. No market is completely free from government involvement; at a minimum, governments help to enforce contracts, but they also intervene through taxes, licensure requirements, safety regulations, fraud prevention, antitrust oversight, and more.

The term “capitalism” refers more properly to a system in which vast accumulations of “capital” (money, land, resources, etc.) fuel large-scale production. People who accumulate vast quantities of capital are called “capitalists.” It’s best to think of capitalist economies as a subset of free market economies, since most of them are. An illiberal economy with vast accumulations of capital is better described as an oligarchy. Thus: all (or nearly all) capitalist economies are free market economies, but not all free market economies are capitalist economies. It’s possible to have a free market economy without any vast accumulations of wealth that would qualify it as “capitalist.”

One further subset of capitalism is “corporatism,” which is where people pool their collective capital to achieve a greater accumulation of wealth corporately than they could individually. Any company whose stock is owned by more than one person classifies as such a corporation. Corporatism can be thought of as hyper-capitalism, since it enables even greater accumulations of wealth, thereby accentuating both the advantages and dangers of capitalism.

On the other hand is “socialism.” As a historical matter, socialism arose as a critique of the abuses of capitalism during the Industrial Revolution. As an ideology, it elevates the rights of the laborer at the expense of the capitalist. It dignifies labor but denigrates private property. As a political phenomenon, this means that socialists endorse policies that redistribute wealth from the “haves” to the “have nots.” Taken to its extreme, socialist principles would exert totalitarian control over economic activity, replacing market freedom with a system much closer (if not identical) to communism.

At a philosophical level, capitalism and socialism would seem to be opposites (with one stressing the value of labor, the other the value of capital). In practice, however, many nations have managed to combine elements of each. For instance, American society hosts a world-class stock exchange, massive wealth management firms, and some of the world’s wealthiest businessmen. At the same time, America operates a progressive income tax (where top earners pay a larger proportion of their money), various welfare programs for the poor or unemployed, and a pension fund for retirees, which is even called “Social” Security.

Because it appeals to the many against the few, socialist notions exert greater pressure on democratic societies than capitalist ones. (In his “Communist Manifesto,” Karl Marx expected this fact to usher in full-scale revolution, overturning capitalist systems.) But Western societies have more or less successfully blunted the force of socialist pressure by adding a social safety net, while still retaining the advantages of essentially capitalist economies. (This is what Marx failed to predict.) As Americans forget these benefits, it’s worth reminding ourselves what those advantages are.

Advantages of Capitalism

Several advantages pertain to any economic system with free markets. The most prominent of these reasons is efficiency, or the optimal distribution of scarce resources. It turns out that prices are much better at managing the distribution of goods than bureaucratic managers. They respond much more quickly to changing conditions (increases or decreases in supply or demand). They also reflect people’s actual preferences, instead of a bureaucrat’s estimation or imposition of preferences.

A second advantage of free markets is that property rights fare better under this system than one based on government control. “Property rights” refers to the notion that whatever a man owns and works for rightfully belongs to him (Acts 5:4). This principle builds on the creation principle that man was created to work (Genesis 2:15) and provides a powerful incentive to work as a means to live (Psalm 128:2; 2 Thessalonians 3:10). John Locke drew upon such teaching to articulate the Labor Theory of Property in his famous “Second Treatise on Government”:

“Every Man has a Property in his own Person. This no Body has any Right to but himself. The Labour of his Body, and the Work of his Hands, we may say, are properly his. Whatsoever then he removes out of the State that Nature hath provided, and left it in, he hath mixed his Labour with, and joyned to it something that is his own, and thereby makes it his Property.”

Socialists pay lip service to this principle, arguing that the labor of laborers should earn them a greater share in the profits in a capitalized economy. If business owners voluntarily raised wages, it would not violate free market principles (indeed, many businesses do so to retain skilled labor). By contrast, the socialist solution — coercive redistribution — actually undermines property rights by implying the right to private ownership expires (or diminishes) after a period of time.

A third advantage of free markets over controlled economies is the freedom they provide. In a free market, individuals may pursue any type of work they choose and use their earnings on the goods and services they most prefer, given their salary. This has led to an astonishing variety of options in housing, transportation, foodstuffs, and leisure activities — available not to the wealthy alone, but even to ordinary wage earners. A controlled economy not only provides fewer choices, but it also degrades human individuality by restricting people’s ability to choose — and choose freely.

In addition to these general advantages of all free markets, other advantages pertain specifically to capitalist economies, such as “economies of scale.” This term refers to the fact that it becomes cheaper and easier to produce a good (or service, theoretically) as more of it is produced. Taking advantage of such economies of scale requires massive inputs of capital (for more raw materials, assembly lines, tools, etc.), which capitalist economies are perfectly suited to supply.

In some cases, harnessing economies of scale has enabled capitalists to produce goods at a fraction of the previous cost. This makes it possible for human industry to feed, clothe, house, and otherwise supply the world’s population much more cheaply now than, say, before the Industrial Revolution. In other words, economies of scale — whose use is only possible with capitalism — have resulted in massive increases in human prosperity over the past few centuries. Even the poorest citizens in the richest nations are far better off than the oppressed factory workers who inspired Dickens’s novels.

A second, related advantage is that large accumulations of capital unlock certain gargantuan undertakings that could not be achieved with a more dispersed capital. For instance, in pharmaceutical research, a lab might spend $1 billion in R&D for every commercially viable drug it produces. Without the ability to pool such a vast capital, medical R&D would be a much riskier, and therefore less enticing field. From commercial space flight to Disney World to Amazon’s same-day delivery, the U.S. economy is replete with examples of commercial enterprises that would be impossible or greatly reduced if mass accumulations of capital were not available for investment.

Dangers of Capitalism

Yet, despite these compelling advantages, capitalism is also vulnerable to certain dangers. Although these dangers do not nullify the advantages brought by free markets and capitalism, they should caution human societies against unrestrained or immoral excesses.

Almost by definition, capitalist societies entail vast inequalities of wealth between their richest and poorest members, creating conditions that are ripe for (and often rife with) exploitation. This is because wealth is a source of power (Proverbs 10:15) and popularity (Proverbs 14:20), while the poor are vulnerable and oppressed (Psalm 10:2, 73:8; Ecclesiastes 4:1), even to the point that they cannot improve their economic status (Proverbs 13:23).

Because of man’s sinful, selfish nature, those with power and wealth often use their power and wealth to exploit and oppress those without these assets, leading to situations where “the poor use entreaties, but the rich answer roughly” (Proverbs 18:23). Opportunities for exploitation are myriad, from wages to debt to fraud to lawsuits, not to mention sexual harassment and worse. Sadly, rich oppressors often have the law on their side (or make the law on their side), leaving the poor no recourse except appeals to heaven. (Of course, this danger is not unique to capitalism; communist countries have an oppressive, wealthy elite, too.)

A second danger of capitalism is the ever-present, often overpowering, temptation to idolize wealth. Jesus warned that “No one can serve two masters,” meaning that “you cannot serve God and money” (Matthew 6:24). Because of this, “it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God” (Matthew 19:24).

This is less an argument against riches than against trusting riches. Those who trust in the abundance of capitalism can also be tempted to believe that human industry can do no wrong — that there are no moral downsides, for example, to human gene editing or AI innovation. “Whoever trusts in his riches will fall, but the righteous will flourish like a green leaf” (Proverbs 11:28). The danger is that riches are such an irresistible enticement to fallible human hearts. “Give me neither poverty nor riches,” prays Agur, “lest I be full and deny you and say, ‘Who is the Lord?’” (Proverbs 30:8-9).

A third danger of capitalism is that it can lead some to idleness. The man who trusts in his capital to earn a living for him may be tempted to avoid all useful labor. But human beings were created to work, even before the Fall, as our work images and therefore glorifies God. The man who neglects to work is neglecting his primary duty as a human being, and his consequent idleness will only lead to other sinful habits. (Of course, this danger is also not unique to capitalism, as shirkers exist in all societies, especially ones with socialistic safety nets.)

However, these abuses of capitalism are not justifications for destroying the entire system, but they should caution policymakers and businessmen against embracing an immoral capitalism that harms human beings who bear God’s image. The solution to capitalism’s moral pitfalls is not total abolition of the system but a recognition and rejection of them.

Of course, the only economic system that will not suffer from abuse is one in which every heart is perfectly surrendered to the will of God. Such a system will not be realized until Jesus returns and establishes his kingdom on earth as in heaven. Until then, freedom and flourishing are best realized through free markets, in a capitalized economy.