The Democrats' generational split over capitalism

The Democratic Party has a yawning generational divide.

In recent years, this first became acutely apparent during the 2016 Democratic primaries, when younger voters flocked to Bernie Sanders over Hillary Clinton. Though Sanders was the oldest person in the race, his appeal to the younger generation had little to do with age; millennials were attracted to the senator's progressive vision and "democratic socialism," while voters of Sanders' own generation were far more supportive of Clinton's brand of centrism. For many older Democrats, Sanders seemed like a throwback to another era, but for millennials the septuagenarian socialist was promoting an agenda that felt fresh and relevant.

In the three years since, the party's generational divide has grown only wider. It's become only more obvious, too, now that 29-year-old Rep. Alexandria Ocasio-Cortez (D-N.Y.) has replaced Sanders as the most talked about democratic socialist in America. By sparring with older Democrats like House Speaker Nancy Pelosi (Calif.), she is once again highlighting the political divisions between younger and older Democrats — particularly between millennials and baby boomers, the two largest generations.

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These divisions have manifested themselves in a number of ways, but if there's one underlying issue that seems to divide these two generations most it's probably capitalism. While younger progressives have grown increasingly critical of capitalism over the years, embracing the socialist label and rejecting the "neoliberalism" of the past few decades, older progressives remain largely committed to capitalist ideals.

This is evident in Sen. Elizabeth Warren (D-Mass.), who, with Sanders still on the sidelines, is probably the most progressive Democratic candidate to enter the 2020 presidential race thus far. Though Warren is very far from a free market ideologue, she has also been careful not to criticize capitalism too much either. In an interview last summer, for example, she reiterated that she is a "capitalist" who believes in "fair markets" with rules, telling CNBC's John Harwood that markets create opportunity and "make us rich." Shortly after this interview Warren introduced her bill The Accountable Capitalism Act, which aims to crackdown on political corruption and overhaul corporate governance in America by introducing a co-determination system similar to those found in European countries like Germany. The bill's goal is, essentially, to make capitalism accountable and fair, or as liberal economist Robert Reich put it in his 2015 book, Saving Capitalism, to make capitalism work for "the many and not just the few."

Both Warren and Reich are advocates of what is commonly called stakeholder capitalism, which prevailed during the post-war era (1945-1970) when corporations considered the interests of all stakeholders — from employees to community members to customers — when making important business decisions. Sometime in the mid-1970s this model was swept away by the shareholder revolution, which ushered in the era of what is now called neoliberalism. As labor became collectively weaker in the 1980s and capitalists began cultivating and wielding political power, the social contract between corporations and stakeholders eroded. Under "shareholder capitalism," as critics call it, the only person that mattered was the shareholder, and the only thing that mattered to the shareholder was profit. The era of neoliberalism spread globally in the 1990s, wiping out many of the economic gains made by workers during the 20th century.

Baby boomers like Warren and Reich grew up during the so-called "golden age of capitalism," when Western countries embraced social democratic reforms that curbed the worst excesses of capitalism while staving off more radical alternatives. They also came of age during the height of the Cold War, when the communist threat hung over the country and most Americans associated "socialism" with Soviet-style communism.

No wonder, then, that progressives who lived through the Cold War and grew up during a time of great prosperity under post-war capitalism are wedded to the idea of saving capitalism from itself. Warren and Reich are like most of their generation in this sense. According to a YouGov Omnibus poll from 2018, a majority of Americans over 65 have a favorable view of capitalism, while only 30 percent of 18-29 year olds see capitalism in a favorable light.

This trend among millennials is clearly represented by Ocasio-Cortez, who grew up after the fall of communism and came of age during the worst financial crisis since the Great Depression. "Capitalism has not always existed in the world and it will not always exist in the world," said Ocasio-Cortez during an interview last summer. The idea that the free market system could come to an end is inconceivable to those who have lived their whole lives under the impression that it's simply the natural order of things.

During a CNN town hall in 2017, the generational divide over capitalism was evident when a NYU college student asked Nancy Pelosi about her thoughts on young people embracing socialism. "We're capitalists, and that's just the way it is," she responded, unwilling to engage in any kind of debate about capitalism. Unfortunately for Pelosi and other Democratic Party elders, the question of whether capitalism is a system worth preserving isn't going away. As long as economic inequality continues to widen, wages continue to stagnate, and debt levels continue to rise, we can expect younger generations to become even more skeptical about the wisdom of markets.

The only way to bridge the generational divide is for Democrats to have an open debate about capitalism and other dividing issues. If older Democrats try to silence younger progressives and refuse to have an honest debate, they will simply end up pushing them further left and solidifying their anti-capitalist convictions. Perhaps capitalism really is worth saving, and perhaps older progressives can teach younger progressives about the merits of moderation. But they'll have to debate the issue in the first place.

The 2020 Democratic primaries would be a good place to start.