A recent poll from Harvard University points out that 51% of young adults between 18 and 29 years of age do not support capitalism. 🙁 Only 42% said they support it. Of course the results of these kinds of surveys are not easy to interpret. Capitalism doesn’t have the same meaning for everyone. One explanation for the outcome could stem from the fact that not all millennials understand what capitalism is. They may be frustrated with crony capitalism or corporatism, which is rampant in the world today. But those are not the same as capitalism.
The idea of capitalism simply means a free market system where individuals have the rights to personal property and the enforcement of their contracts. 🙂 That’s it. Another survey that included people of all ages found that only respondents who are at least 50 years old supported capitalism for the most part. Older people understand that capitalism works well because government intervention was measurably less in North America before the 70s so there were less lobbyists and public bailouts. The ratio of government employees to the general population in the United States has grown under Obama and Bush.
It’s ironic that the cohort most against capitalism is generation Y. They of all people are most dependent on the advantages offered by the free market system. 🙂 Millennial don’t really care about government pensions or public health insurance all that much. But they will be become very upset if you take away private services like Facebook, Amazon.com, Netflix, or any of Google’s services (Google Search, Gmail, etc.)
Popular TV personality Jim Cramer once created the acronym FANG. It represents 4 of the most popular and best-performing technology companies on the stock market. FANG stands for Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG) (GOOGL), which has now become Alphabet.
Last week I purchased 8 shares of Facebook at $164 each. 🙂 It’s a U.S. stock and doesn’t pay a dividend, so for tax purposes I bought it inside my TFSA at TD. Year to date all the FANG stocks have returned at least 25% to investors. Yay! I already had the other 3 stocks so by picking up FB I now have a full FANG portfolio. 😀 Amazon has grown to a market capitalization worth half a trillion dollars as of writing this post!
Millennials in general may say they don’t support capitalism. But they sure spend a lot of money, time, and attention helping some of the most capitalist entities in the world become even more profitable. As the saying goes; actions speak louder than words. And the trend is clear. For the sake of my financial goals I will continue to invest in large tech stocks and trust the free-market will provide growth over the long run. 😉
Random Useless Fact:
Carrots were originally white or purple. Then a yellow carrot appeared through mutation and the familiar orange carrot we see today was bred from it.
Free market do not exist, it’s utopian and never existed.
Because capitalism is very corrupt and will never allow free markets.
Even if one country tries to be as free market, the next country would eat it alive.
The richest countries are the ones with the best measures to protect and create “competitivity” for it’s own industries and financial markets… and they use all types of non-free market techniques for that. The very fact of a Gov giving incentives or investments to an economic sector, that may disrupt the free markets. Any regulation for anything will disrupt free markets … it protects some and put barriers for others… etc.
Those FANG companies are mostly Ad revenue companies (which is another bad thing of capitalism) and are almost semi monopolies in practice. Millenials are doomed in the complexity of current capitalism. They may not understand how bad it actually is.
I don’t like government giving incentives or choosing which sectors should win or lose. If there’s natural demand for something I’m sure the free market will step up. 🙂
15% FWT inside a TFSA. So why did you put it in there ?
Correct me if I’m wrong but the 15% FWT only applies to dividends, and Facebook doesn’t pay dividends. So I prefer to hold FB in my TFSA and use my finite RRSP room to shelter dividend paying U.S. stocks in order to maximize my tax savings. 🙂
I definitely agree with your strategy there.
Question though, considering how facebook has went up, you think it would continue to do so in the next two years? I am starting to get a bit concerned about the ROE levels of the general market.
I think it will continue to go up. One reason is because most stock analysts who cover Facebook have either “BUY” or “STRONG BUY” for the stock. And the consensus price target is $185 per share, or 7% higher than now. But that being said, I think it will go up more modestly over the next few years, like maybe 5% per year. Another reason is because out of all the large, stable tech companies that are growing fast, Facebook has a relatively acceptable P/E ratio. And at the end of the day people have to put their money somewhere. And lastly, based on the Graham formula, V = eps x (8.5 + 2g) Facebook stocks should be worth $269 today so it’s not overvalued yet.
[…] Freedom Thirty Five Blog wrote about millennials rejecting capitalism. […]