Gen Z will change capitalism as we know it

America's Gen Zers aren't fully sold on capitalism.

In a new Business Insider survey of more than 1,800 Americans, 28% of Gen Zer respondents between the ages of 18 and 26 said they somewhat or strongly preferred the economic system of socialism over capitalism, the most of any generation. That was almost on par with the 29% of Gen Zers who said they preferred capitalism. The remaining Gen Zers said they didn't have a preference or weren't sure what they preferred.

The survey was conducted in July in collaboration with YouGov. Generation Z was born between 1997 and 2012, but BI only surveyed those above the age of 18.

Of course, exactly what makes an economic system capitalist or socialist depends on who you ask. Economies around the world operate with varying levels of taxation, regulation, and government support for services like education and healthcare. And it's not unusual to see younger generations further to the left on social, political, and economic issues than older generations.

But the high levels of support for socialism among Gen Zers are striking, and illustrate a lack of confidence in capitalism as an economic system. According to Gen Zers and experts Business Insider spoke with, it also reflects a dissatisfaction with the widespread economic inequality some young people feel is endemic in the US.

"Seeing corporate greed in the news every single day makes it understandable that we would want something better," Marianna Pecora, a 19-year-old communications director of the Gen Z-led organization Voters of Tomorrow, told Business Insider. "I don't necessarily think that means socialism. I think that means making sure the system that we're working under is really doing its best to support as many people as possible."

As young Gen Zers grow into the leaders of tomorrow, they will have the power to chart America's economic future. We spoke with experts about why Gen Z is down on capitalism and what changes could be in store for US citizens in the years to come if the generation gets its way.

Gen Z says high housing, healthcare, and college costs are failures of the current capitalist system

When young people are asked how they feel about private home ownership and entrepreneurship — both capitalist ideas — there is little pushback, Christina Elson, executive director of the Center for the Study of Capitalism at Wake Forest University, told Business Insider. But when the focus turns to how the current economic system is working for Americans, Gen Z's dissatisfaction begins to show.

"In the mind of most Americans and particularly younger Americans, healthcare is a broken system," she said. "Younger people tend to think the system would benefit from more government intervention."

Elson said the high costs of housing and education, in addition to inequality, are other key areas where many Gen Zers think the existing capitalist system is falling short.

"You hear about 'billionaires should be outlawed' — that really isn't the issue," she said regarding Gen Zer's concerns. "The issue is the bottom. What is the appropriate bottom living standard for an American citizen, and what role should the government have in ensuring that people don't fall below that."

Precisely when an economic system with significant government intervention becomes "socialist" is up for debate.

Paul Collier, economist and author of the book The Future of Capitalism, told Business Insider there are two kinds of capitalism: the "raise me up" type that gives workers opportunities and the "drag me down" type that leads to widespread inequality. He said the US has experienced much of the latter in recent decades, so he's not surprised if many Gen Zers are dissatisfied.

"It's not capitalism that's the problem. It's what sort of capitalism you get," he said, adding, "And the way it's turned out since about 1970 for most Americans has been shit."

In recent decades, Collier said US policymakers have focused on economic growth and wrongfully assumed the wealth would "trickle down" to everyone. As a result, the rewards of this growth have largely been captured by a "small elite," he said.

The top 1% of Americans earn over 26 times more than the bottom 99% and hold 21% of the nation's total income, per the Economic Policy Institute. However, there's some evidence that inequality has narrowed in recent years due to the strong wage gains of lower-income workers. In 2022, the average American's net worth reached an all-time high.

Gen Z leaders say the "game is rigged" and that corporate greed has gone too far

The internet has provided young people with almost unlimited information, and it's led many Gen Zers to believe that the "game is rigged" against them, Elise Joshi, the 21-year-old executive director of Gen-Z for Change, a collective of Gen Z activists that use social media to drive progressive change, told Business Insider.

"A system that centers overproduction, overconsumption, and perpetual growth is not sustainable," she said. "From increasing oil development in the midst of a climate crisis to jacking up food and energy costs, there's only a matter of time before we collectively agree that this setup cannot persist."

Pecora said the debate between capitalism and socialism isn't at the top of young voters' minds. She pointed to student debt relief, the Inflation Reduction Act, and the American Climate Corps as policies that have benefited young people and said that government investments in universal pre-K, free community college, and additional student debt relief are still needed.

"All of that is stuff that I think young voters really care about," she said. "And I think it's more about these individual economic issues that affect people's everyday lives than a question of capitalism versus socialism."

Reforming capitalism is easier said than done

For the Gen Zers who hope to tweak the US's capitalist system someday, many obstacles remain in their path.

"What young people are really worried about more than capitalism versus socialism is the possibility of a second Donald Trump presidency," Pecora said. "When you're looking at the next decade of our generation and what our economy looks like, I think it comes down to the 2024 election." Recent polling shows a close presidential race among young voters between President Joe Biden and former President Donald Trump.

In the decades ahead, Collier said Gen Zers who are eager to enact change will have to find a compelling way to sell Americans on some unpopular policies — like higher taxes — that could help reduce inequality.

"We need somebody as charismatic as Trump, but with a much more serious agenda," he said. "Or we need some social movements that are bottom-up and embrace a large majority of Americans."

The economist pointed to other countries around the world that he said have managed to retain capitalist values and reduce inequality, citing Denmark as a primary example.

Whether it's Gen Z or a generation to follow them, Collier said he's optimistic the US will eventually steer in what he thinks is the optimal direction.

"The arc of history is a long arc, but so far, the presumption that eventually things will get better has always been right," he said