The next generation of illiberal left is gaining ground. It’s time to stand up to them.
The Economist
Something new is moving on the left. A new generation of socialists wants to remake the economy with price controls, heavy taxes on wealth and a wave of nationalizations. Fueled by anger over Gaza, they are winning voters at a frightening pace. Many of them have only recently come to the fore, like Zack Polanski, who leads the Green Party in Britain, or Zohran Mamdani, the mayor of New York. Others are old political figures: the seventy-year-old Jean-Luc Mélenchon is making a fourth attempt at the French presidency, but the support of young people in their twenties, or “Generation Z,” has put the Elysee Palace back on his horizon.
Call it Generation Z socialism. Not because all its supporters are young, or because it’s a new thing for young people to lean left, but because it’s the brand of leftism, created for the TikTok era, that today’s young revolutionaries support.
Forget heavy collectivist ideals or the seizure of the means of production. Gen Z socialism is a “me first” doctrine. Climate change and race, the main concerns of the 2010s and early 2020s, are now much less central. Even social issues have faded, except for Gaza. Anger over inflation, housing and artificial intelligence has replaced them all with something more gritty. “This country is full of wealth,” says Avi Lewis, the newly elected leader of the New Democratic Party in Canada, a country where productivity has been virtually unchanged for a decade. “We can have beautiful things.” Saying that prices should be limited to reduce bills while someone else pays for public services is a tempting message and one that spreads easily.
Many of the grievances that drive Gen Z socialists stem from real problems. Inflation has been too high, rent in big cities has often become unaffordable, and artificial intelligence could upend the job market. Ignoring these concerns would be foolish. However, Gen Z socialism is wrong about how to solve the problems of capitalism. It must be resisted, because it is a profound threat to well-being. No country has Gen Z socialists all the same. The realities of power have forced some of them, like Mamdani, to become more moderate. But they generally agree on three core principles.
First, that economic growth does little to help ordinary people. Theirs is a zero-sum mindset, where a better outcome comes not from creating more wealth, but from taking it: because they fear that a group of barons will soon control it on a large scale.
Second, that the costs can be paid for by the rich. The left used to demand higher taxes for everyone; Gen Z socialists demand benefits financed by billionaires.
The third principle is an extraordinary hostility to private enterprise. Generation Z socialists have no interest in letting the market function and redistribute income. They would like large parts of daily life, from housing to grocery stores, to be governed by state dictates.
Politics has always had its weird edges. The far right is no less crazy, and it is more dangerous. But what is so disturbing about Gen Z socialists is how deeply their ideas are penetrating the center left. Desperate to compete, even mainstream Democrats in America are now proposing crazy schemes like exempting more than half of taxpayers from federal income tax. In Britain, the Labor Party, after winning power on a centrist platform, has been cowed by the Greens and is reviving its thirst for higher taxes and state control. Increasingly, the ideas of Gen Z socialists may win even when their candidates lose.
This is bad news. Rent controls would worsen the housing shortage by destroying the incentive to build. The profit margins of the big supermarket chains, demonized by Generation Z socialists, are already incredibly low after years of cutthroat competition, a miracle of modern capitalism. Wealth taxes would become confiscatory and stifle innovation. Don’t assume that the failure of these policies, if implemented, would automatically bring about a course correction. Europe has struggled for decades to escape the low-growth stagnation caused by its overregulation; the rise of statist “Peronists” in Argentina helps explain its century of relative decline.
Countering Gen Z socialism is therefore an urgent task. The first step is for free-market liberals to stop apologizing. A series of popular critiques of capitalism, each with a grain of truth, have completely obscured the basic wisdom that private enterprise is at the root of human prosperity. Yes, people are not always rational, as behavioral economics shows. It is true that inequality matters, and that growth is best when it is widely distributed. Free trade and globalization create losers as much as they create winners. But this is the best time in human history to be born, given record real incomes, high life expectancies, and low levels of extreme poverty. A vigorous defense of capitalism would work better in the age of social media than handwritten lectures from uncharismatic centrists like Sir Keir Starmer.
Centrist governments must also address the problems that fuel popular discontent. “Affluence” liberals are right to want to build affordable housing and ample infrastructure. Politicians must stop burdening young people with the burden of financing overstretched pensions. The tax system must ensure that meritocracy prevails over inheritance; broader inheritance and property taxes would help. The most difficult challenge will be the disruption caused by advances in artificial intelligence. The Gen Z left has come up with its usual list of demands: a moratorium on data centers and a guarantee of government jobs. Liberals need to be more positive and imaginative in their solutions, using a mix of taxes, redistribution of capital ownership, and support for workers so that the benefits of labor market shocks are widely shared.
Populists have the wind in their sails; it can sometimes seem as if market liberalism is doomed to political failure. The Economist disagrees. A strong defense of the ideas that have brought unprecedented wealth has barely been attempted. Many of the problems that Gen Z socialists raise, such as high rents, are the result of markets that are not free enough, not too free. There is still time for liberalism to produce results again, and win the debate.