In, “Is Capitalism Sustainable?” Senior Fellow at the American Institute of Economic Research, Michael Munger, explains the benefits, and in fact the necessity, of capitalism in organizing human cooperation at scale, and urges the consideration of some problems inherent in capitalism.

Karl Marx called some of these problems “contradictions,” and while he was wrong about many things, including a value theory based on embodied labor, his perceptions of capitalism were very accurate.

The problem for Marxists is simple, Munger says: every flaw in markets is worse under socialism. At the micro level, every flaw in consumers is worse, and in fact much worse, in voters. Unless you are willing to advocate monarchism, or actual communist dictatorship, markets and democracy are the only two mechanisms we have for organizing society.

So while Marx’s theory about the flaws of capitalism has some merit, he was utterly blind to the problems of democracy. Looking back now, with the benefit of the contributions of the Public Choice branch of political economy, we are in a position to evaluate markets and democracy on an even playing field.

And most of the time, for most purposes, capitalism wins.

Michael Munger is a Professor of Political Science, Economics, and Public Policy at Duke University. His Economics PhD was awarded from Washington University in St. Louis in 1984. He worked as a Staff Economist for Dr. Wendy Gramm at the Federal Trade Commission in the first Reagan Administration, and has had academic appointments at Dartmouth College, University of Texas-Austin, and University of North Carolina-Chapel Hill. He directed the MPA Program at UNC, and chaired the Political Science Department at Duke from 2000 to 2010. He currently directs the interdisciplinary Philosophy, Politics, and Economics Program at Duke.

His research interests include regulation, political institutions, and political economy. His most recent book was Tomorrow 3.0: Transaction Costs and the Sharing Economy, published by Cambridge University Press in 2018. Munger is a Senior Fellow of the Independent Institute and the AIER, and is a former President of the Public Choice Society (1996-1998). He served as an editor of Public Choice (2005-2010) and Independent Review (2015 to present). He lives in Raleigh, North Carolina with wife Donna Gingerella and loyal dogs Murphy and Skippy Squirrelbane.