Lika Kobeshavidze at the Foundation for Economic Education explains why angry Gen Z’ers are blaming capitalism but should instead be blaming crony capitalism for the economic plight they find themselves in:
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Across college campuses, on TikTok feeds, and in everyday conversations, a familiar narrative is gaining steam: capitalism is broken.
Rising rents and stagnant wages fuel the claim among some young people that free markets have failed an entire generation. According to a 2024 poll by the Institute of Economic Affairs, more than 60% of young Britons now view socialism favorably. In the United States, the trend is similar, with Generation Z increasingly skeptical of capitalism’s promises.
But much of this idealism is rooted in distance — many of the young people romanticizing socialism have never lived through the economic dysfunction or political repression it often brings. For those who experienced Soviet shortages, Venezuelan collapse, or East Germany’s surveillance, the word socialism doesn’t suggest fairness or opportunity — it suggests fear, failure, and control. There’s a reason so many fled those systems to come to freer countries. What sounds utopian in theory has too often turned dystopian in practice.
But blaming capitalism misses the mark. The real culprit is cronyism, the unholy alliance between big government and big business that twists markets, blocks competition, and rewards political connections over genuine innovation.
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Cronyism is not limited to one country or one political party. Across the United States and Europe, the symptoms are the same.
In the US, Canada, and the UK, the dream of homeownership slips further away for young people. Sky-high housing prices are blamed on “market failure”, but the real cause lies in layers of government-imposed barriers: restrictive zoning laws, burdensome permitting requirements, and endless bureaucratic delays. Big developers who can afford to navigate or influence the system survive. Everyone else gets locked out.
In Europe, the pattern repeats. France’s labor laws, designed to protect workers, instead stifle opportunity. Hiring becomes risky and expensive, especially for young people. Large corporations, with the resources to manage compliance costs, consolidate their dominance. Small firms and startups never get off the ground.
There’s also a persistent myth that big business fears government intervention. In reality, the largest corporations often embrace it, because it keeps them on top. Tech giants like Facebook and Google now lobby for more regulation, knowing that complex new rules will strangle smaller competitors who can’t afford fleets of compliance officers. Green energy subsidies, meant to combat climate change, often end up showering billions on well-connected firms while locking out emerging innovators.
Cronyism doesn’t reward the best ideas. It rewards the best lobbyists.
