The Triumph of Capitalism: Why It Works, Why Socialism Fails, and Why the “Rich Took from the Poor” Myth Collapses Under Modern Reality

There is a reason socialism, communism, and every Marxist derivative have failed everywhere they’ve been tried — and why capitalism, despite imperfect people living within it, has transformed human life more profoundly than any economic system in history.

Capitalism may not be perfect — only God is — but no system has created more prosperity, more advancement, or more human flourishing. No other system has lifted more people out of poverty, hunger, disease, and ignorance; brought more scientific progress; expanded more freedom; or served as a greater patron of the arts, creativity, and human potential. Capitalism, not socialism, is responsible for the modern world as we know it.

Socialism, on the other hand, is rooted in the forced taking of private property. And if you do not have the absolute right to your own property — the fruits of your labor, your savings, your home, your business — then you do not have liberty. You are a subject, not a citizen. At scale, you become something even worse: a slave to the state.

This is not theory. It is the whole of recorded history.

Capitalism Was Born in America — Literally

Before America, there was no capitalism. There was mercantilism, where kings dictated what could be grown, built, shipped, or sold. Business was a privilege granted and controlled by the crown. Most of your profits went back to the king’s treasury. Ordinary people had no economic freedom.

What’s often forgotten is that mercantilism wasn’t just economically restrictive — it was inherently expansionist and aggressive. Because trade was controlled from the top down by monarchs, not by entrepreneurs or free individuals, the only way for a kingdom to “grow” economically was through conquest and colonization. If the king wanted more gold, more sugar, more tobacco, more spices, or more trade routes, he didn’t encourage innovation or free enterprise — he sent ships and armies.

Mercantilism required colonization because it was built on a zero-sum mindset: one nation could only become wealthier at another’s expense. And because economic power flowed upward to the crown, expansion became a matter of political and military force, not voluntary exchange. The state had to seize new lands, impose monopolies, and control distant markets at gunpoint.

Capitalism is the exact opposite.

Capitalism is based on voluntary association, competition, and mutually beneficial exchange. It does not require conquest — and in fact, conquest actively harms capitalist systems. Military rule, forced monopolies, and subjugated populations all undermine the very principles capitalism is built on: free markets, voluntary trade, open competition, and consumer choice.

Under capitalism, wealth grows by creating value, not by seizing territory. A capitalist does not need colonies to prosper; he needs willing customers and a free society where he can innovate, invest, produce, and trade without coercion. Colonization doesn’t enrich capitalism — it destroys it by replacing voluntary exchange with political power, violence, and dependency.

Mercantilism grows by conquering people.

—Capitalism grows by serving people.

Mercantilism is inherently imperialist.

—Capitalism is the opposite — it thrives on voluntary exchange, not domination.

That difference is not subtle; it is the dividing line between oppression and liberty, between state power and individual freedom.

America — and Adam Smith — changed everything.

Capitalism emerged naturally in the United States because it was rooted in the same principles as America’s founding: property rights, personal liberty, free association, and freedom from government interference. It was not a system imposed by rulers — it was the spontaneous economic expression of a free people.

Interestingly, the word capitalism did not exist until Karl Marx coined it in 1847 as a criticism. Before that, in America, it didn’t need a name. It was simply how free men and women lived and conducted their business.

Capitalism: The Individual, Not the Government, Provides

At its heart, capitalism is simple: individuals identify needs, create solutions, and provide goods and services. If the entrepreneur is right, he prospers — and so do his employees, his investors, and the customers whose needs are met.

Capitalism “trickles down” not as a political slogan, but as economic fact. Factories must be built, workers hired, raw materials purchased, transportation arranged, energy consumed. Wealth and opportunity ripple outward from every productive act.

Capitalism creates. —Socialism consumes. Capitalism rewards value. —Socialism confiscates value.

That is the difference.

A History Lesson Socialists Hate: Plymouth Colony’s Brush With Extinction

The Plymouth Colony attempted socialism long before socialism had a name. All land and production were held in common; all goods distributed equally regardless of effort. Predictably, output collapsed. People starved. Human nature — not greed, but the simple reality that individuals will not work hard for someone else’s rewards — destroyed the system.

Governor William Bradford saved the colony by instituting private property and personal responsibility — one of the earliest examples of capitalism in America. Productivity soared. Abundance returned. Plymouth survived because capitalism replaced socialism.

History speaks clearly, if one is willing to listen.

http://www.independent.org/news/article.aspid=1423

Debunking the Marxist Myth: “The Rich Got Rich by Taking from the Poor”

Marxists insist that the rich become wealthy by “exploiting” the poor. But that claim only works if you believe the economy is a fixed pie, as Marx did — a world where one person’s gain is automatically someone else’s loss.

That belief was mistaken then and is indefensible now.

Modern wealth is not seized; it is created. Wealth today is innovation, technology, logistics, intellectual property, capital investment, entrepreneurship, research, and value creation. A smartphone, a life-saving drug, a new microchip, a better tractor — these are not stolen from anyone. They are created, and they create new prosperity for everyone who uses them.

If Marx’s theory were true, the poor would be getting poorer. Instead, the opposite is happening.

Over a billion people have risen out of extreme poverty since global markets expanded. Life expectancy has increased. Education and medicine have spread. Hunger has plummeted. Standards of living, even for the poor, have improved dramatically.

These are not the results of exploitation. These are the results of economic freedom.

Where exploitation does occur — cronyism, state monopolies, corruption, oligarchies — it happens because of government power, not capitalism. Those systems resemble the top-down authoritarianism Marx claimed to oppose, not the voluntary exchange of free markets.

Capitalism is voluntary.

Socialism is coercive.

Capitalism Rewards Value; Socialism Punishes It

Under capitalism:

• You choose where to work.

• You choose what to buy.

• You choose how to create, produce, and trade.

• You can quit a job.

• You can start a business.

• You can become the competition.

Under socialism:

• The state decides for you.

• Property is seized.

• Wealth is redistributed by force.

• Innovation is punished.

• Success is treated as theft.

• Dissent becomes disloyalty.

Capitalism says: “If you create something valuable, you may prosper.”

Socialism says: “If you prosper too much, we will take it.”

Which philosophy produces abundance, innovation, and progress? And which produces shortages, oppression, and collapse? History answers this decisively.

The Final Reality: Capitalism Is the Economic Expression of Liberty

Capitalism endures because it is built on the principles that make liberty possible:

Property rights. Voluntary exchange. Free association. Individual sovereignty.

If you are free to own property, keep your earnings, build, save, invest, and pursue your dreams, then you are free.

If the government can take what you earn, seize what you build, direct what you produce, and control what you trade, then you are not free — no matter how noble the rhetoric.

Capitalism is the economic expression of human liberty. Socialism is the economic expression of state control.

Capitalism has lifted more people out of poverty than any system in history .Socialism has produced only misery, shortages, dependence, and authoritarianism — every time, everywhere.

Capitalism built the modern world. Capitalism made America prosperous. Capitalism remains the greatest engine for human progress and freedom ever conceived.

And it all began with a simple idea: That the individual — not the state — is the true owner of his labor, his property, and his destiny. © 2025 Timothy Tobin. All rights reserved. First publication: The Red Pill. This essay may be quoted or excerpted with proper attribution to the author and source link.