Polls suggesting that millennials have a favorable view of socialism are well publicized. Less known are polls showing that 90 percent of millennials have a positive view of entrepreneurship, and 58 percent of millennial respondents believe they are more entrepreneurial than previous generations. So far, though, millennials have not been as entrepreneurial in practice as prior generations. But there is hope that this could change given their views on entrepreneurship and the currently robust economy.
Capitalism is facing high-profile criticism and challenges from politicians. But capitalism doesn’t need to be saved. Rather, we need to teach this generation the skills to prosper in a free enterprise system.
How Do We Respond to Millennial Pessimism?
It's important to understand the economic challenges that millennials face. But we do them a disservice when we let them dwell in their pessimism. If we care about their long-term success, the most useful thing we can do is help them develop a resilient entrepreneurial mindset.
It is not enough to counter bad policy on policy grounds alone.
We often hear the message that a skills-based economy requires continual learning. Because millennials have faced arrested development, one of the best places for them to begin their continuing education is by learning the basic skills of free enterprise such as resilience, pragmatic optimism, emotional intelligence, and the flexibility needed to adjust to market changes.
It is not enough to counter bad policy on policy grounds alone. To sustain capitalism, we must equip young people with the tools needed to improve their well-being in a way that government policy will never be able to.
1. Define Terms
Millennials’ skepticism of capitalism and their subsequent embrace of socialism stems, in part, from a misunderstanding of terms. Harvard economics professor Edward Glaeser writes, “The unhappiness that many millennials have with the status quo [of our economic system] reflects an economy that has too often protected insiders at outsiders’ expense.” They have conflated cronyism between government and business with capitalism, cementing their distaste for what they believe to be free markets.
Prosperity is more than just salaries or gross domestic product.
Those of us who understand capitalism and socialism recognize the faultiness of this thinking. If we hope to see millennials turn a corner, we must educate them on how a healthy capitalist system functions and how they can personally flourish in it.
2. Acknowledge Hardships
It’s clear that millennials’ economic adversities are real. According to Ben Steverman, writing in Bloomberg, the combination of stagnant wages and the student loan quagmire significantly contributed to this generation’s delayed prosperity. As a result, millennials are not saving enough for their retirement. In addition, young adults will shoulder the burden of mounting federal debt and have reason to fear that Social Security may not be fully funded when it’s their time to retire. These economic woes have led to pervasive pessimism, as reflected in Rep. Ocasio-Cortez’s recent lamentation that her generation has never known prosperity as adults.
In the face of economic challenges, millennials have fallen behind other generations in certain adulthood milestones, including buying homes, marriage, and childrearing. Although this data paints a discouraging picture, comparing quality of life from one generation to another can be difficult.
3. Make the Case for Optimism
Prosperity is more than just salaries or gross domestic product. Contrasted with previous generations, millennials live in an enviable period. With smartphones, smart homes, on-demand music, video streaming, ever-present information from Alexa and Siri, and the consumer cornucopia that is Amazon Prime, the number of ways one can entertain themselves and connect with the world around them is unprecedented.
After experiencing the Great Recession, the weakest recovery in modern history, and growing income disparities, the economic outlook for millennials may finally be improving as productivity and wages increase and unemployment falls. Millennials are now the largest contingent in the labor force and arguably the most powerful consumer demographic.
Millennials are still writing the book on their generation. Each one will choose whether to give in to pessimism or act with confidence.
On top of these conveniences of the digital age and sharing economy, the economic growth of the past two years has millennials feeling more optimistic financially. This newfound optimism has led to several encouraging behaviors, such as a significant uptick in marriage rates and an increase in home purchases. Millennials are now responsible for 42 percent of new mortgages, outpacing both baby boomers and Gen X.
Millennials are still writing the book on their generation. Each young person will have to choose whether to give in to pessimism or act with the confidence that their own decisions matter. Individuals on the short end of income inequality can improve their financial prospects by their own efforts more than any politician or policy ever could.
4. Help them Reimagine the American Dream
For decades, the American Dream has been defined by a definition of prosperity that couldn’t account for the technological advances ushered in by the Digital Revolution.
By reimagining the American Dream in a rapidly changing economy and labor market, we can guide millennials away from futile comparisons of the 20th-century version of success and into an understanding of prosperity that matches our highly mobile, innovative world. A 2019 American Enterprise Institute report found that Americans may no longer be defining the American Dream entirely in purely material terms. Instead, as if to echo the Declaration of Independence, Americans seem to be defining the American dream as the “pursuit of happiness.”
According to the report,
Americans of all demographic groups believe being free to live your life and having a rewarding family life are more essential to the American dream than owning a home, becoming wealthy, or even having a better life than their parents.
The pursuit of happiness and prosperity is inherently active, willful, and hopeful. A conviction that one’s actions and decisions matter liberates us from the fatalist belief that forces beyond our control shape our lives.
5. Become a Mentor
Those of us who believe that free enterprise leads to prosperity should educate millennials and Gen Z about how to be capitalists. Merely cheerleading capitalism when we see aggregate GDP growth will neither persuade millennials nor teach them how to take control of their own lives.
Schools are failing to teach the skills and traits necessary for enterprise and entrepreneurship. The media is more interested in clickbait about the latest scandals than devoting pages or pixels to improving quality of life through economic literacy and skill development. So, economic mentorship should become the new activism.
We need to teach the next generation that entrepreneurship, agency, and optimism are not only possible but necessary for their economic freedom.
You don’t need an MBA or PhD in economics to be an economic mentor. And you don’t have to be in a formal mentorship program or startup accelerator. Don’t wait for anyone’s permission. Look for “teaching moments” to explain the basics of how the market works. Most importantly, preach agency. Spread the message that personal choices and effort affect us more profoundly than any policy or governmental program.
Ultimately, if we want to be free, we don’t need to go on an apology tour for capitalism. Instead, we need to teach the next generation that entrepreneurship, agency, and optimism are not only possible but necessary for their economic freedom. We may not change millennials’ perception of capitalism overnight. But as they discover that their choices matter and that making wise economic decisions produces good results, we might end up winning the war on free enterprise and save capitalism for the next generation.