By Jacob G. Hornberger
The Future of Freedom Foundation
September 17, 2026
The false indoctrination that American children receive in their public (i.e., government) schools about America's "capitalist" economic system is now boomeranging in a big way. Indoctrinated with the notion that the United States has a "capitalist" economic system, young Americans are now exclaiming, "We don't like your capitalist system. We're going for something different. We're going for socialism."
I'd be willing to bet that if a survey were taken of American adults asking them what type of economic system they live under, the overwhelming majority would answer, "A capitalist system, of course." Many, if not most, of them will take that conviction to their graves. It's a real testament to the power of government to indoctrinate children so deeply that they are forever unable to break free of the indoctrination throughout their adult lives.
Exclaiming against the upsurge in popularity for socialism, especially among young people, right-wingers wax eloquent about the virtues of America's "capitalist" system. By the same token, left-wingers vehemently denounce America's "capitalist" system. Notice the common denominator: Both right-wingers and left-wingers have absolutely no doubts that Americans live under a capitalist system.
If there is some sort of big economic crash, many Americans will blame it on the failure of "capitalism." That's, of course, what President Franklin Roosevelt did during the Great Depression. In fact, his New Deal, he said, was intended to save America's "capitalist" or "free-enterprise" system.
There is one great big problem with this formulation: It just ain't true. Consider, for example, the following:
1. Social Security, Medicare, Medicaid, and all the other welfare programs. A welfare state - and especially a massive one like that which characterizes the United States - is not a "capitalist" system. It is a variation of a socialist system.
A capitalist system is one in which people are free to keep everything they earn and decide for themselves what to do with their own money. Many of them save part of that money, which goes into banks, which lend it to businesses, which convert it into technology, which increases productivity, which raises profits, wage rates, and overall standards of living.
A socialist system seizes the wealth that is being produced and gives it to people to whom it does not belong, in the fake and false name of being good, caring, and compassionate. Yet, the welfare state, which FDR adopted in the 1930s, without even the semblance of a constitutional amendment, and subsequently expanded, is considered part and parcel of America's "capitalist" system. Keep in mind that our American ancestors, say, in 1890, lived without a welfare state and a federal income tax.
2. The Federal Reserve and paper money, which have given Americans decades of monetary debasement through the inflationary expansion of the money supply. Of course, the central bank and the paper money system are considered an essential part of American "capitalism." Really ? Then why did our American ancestors live without a central bank and paper money for more than 100 years ? The fact is that monetary central planning is another variation of socialism. Sound money, preferably through the separation of money and the state, is what genuine capitalism entails.
3. The national-security state, along with the Pentagon's, CIA's, and NSA's foreign policy of interventionism, including wars of aggression, undeclared wars, coups, assassinations, torture, indefinite detention, sanctions, embargoes, blockades, foreign aid, alliances with brutal dictators, and the like. It's a system that has cost taxpayers trillions of dollars. Since Americans are convinced that they live under a "capitalist" system, all this military-intelligence mayhem is naturally considered to be part of that system.
Thus, if some young person decides he doesn't like all this military-intelligence mayhem, in his mind he is turning against "capitalism." It stands to reason that he chooses to go with the opposite of "capitalism," which is socialism.
But a genuine capitalist system operates under a limited-government republic, which was America's founding governmental system. It has only a relatively small, basic military force and a foreign policy of non-interventionism. It costs comparatively little. Remember: Our American ancestors lived without income taxation for more than 100 years and still maintained a military force.
4. A government-managed, government-regulated, and government-controlled economy. Many Americans rightly question President Trump's unilateral imposition of tariffs (i.e., taxes) on the American people. But hardly anyone questions the president's role as an economic planner. It's just taken for granted that the president's job entails managing the economy.
But a government-managed economy is the opposite of a genuine capitalist or "free-enterprise" system. A genuine free-enterprise system is one in which private enterprise is totally free of government management or control - that is, a separation of economy and the state.
5. America's system of immigration controls. This massive death-and-suffering-producing system is also considered part and parcel of America's "capitalist" system. The truth is that it is based on the core socialist principle of central planning, which is why it is characterized by permanent chaos and crisis. Moreover, it comes with a massive and brutal immigration police state that is now expanding beyond the borderlands and enveloping the entire nation. Only a system of open borders, like we have domestically in the United States, is consistent with the principles of capitalism, free markets, and free enterprise.
It makes total sense that young Americans are turning toward socialism. Why shouldn't they, given the horrific results of what they have been indoctrinated into believing is "capitalism"?
I too abhor what statists have done to America, but as a libertarian, I have the advantage of having broken free of the indoctrination to which I was subjected in the public schools that I was forced to attend. Thus, my solution to America's woes is different from that of indoctrinated young people: Acknowledge that American statism has failed and restore a genuine capitalist system to our land.
Reprinted with permission from The Future of Freedom Foundation.