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OPINION: What AOC supports is everything that's wrong with Latin America

Despite AOC’s addiction to the cosmopolitan comforts of capitalism, she uses her platform to promote the same far-left policies that have kept Latin America impoverished and struggling for decades.

Alexandria Ocasio Cortez speaks about the importance of a Green New Deal.
Alexandria Ocasio Cortez speaks about the importance of a Green New Deal. | Rachael Warriner

April 1, 2022 12:36pm

Updated: April 13, 2022 8:40am

U.S. Rep. Alexandria Ocasio Cortez is known for using theatrics to criticize capitalism on social media. But while heralding anti-capitalist tantrums to her 12 million social media followers on the one hand, she also enjoys the spoils of a free-market economy on the other. The former Bronx bartender turned Congresswoman who has been spotted driving a Tesla, and selling $58 Tax The Rich sweatshirts, fits the perfect mold for what we in Latin America call “the caviar left.”

Yet, despite her addiction to the cosmopolitan comforts of capitalism, she uses her platform to promote the same far-left policies that have kept Latin America impoverished and struggling for decades.

Using the same overidealized high ground that so-called ‘democratic socialists’ in the region use to defend communism, AOC is at it again, railing against the billionaire class on Instagram and insulting her constituents by suggesting the rest of us just don’t get it.

"Let me tell you a secret," she whispered in a recent video gone viral. "Most people don't really know what capitalism is. Most people don't even know what socialism is. But most people are not capitalists because they don't have capitalist money—they're not billionaires," she concluded.

Just as Judge and Supreme Court nominee Ketani Brown Jackson struggled to provide a simple definition for 'woman', although she is capable of recognizing one, people don't need to be billionaires to know how they can benefit from capitalism. 

But since AOC enjoys sharing secrets, we decided to share a few not-so-secret facts. 

No capitalist gets our money unless we voluntarily choose to exchange it for whatever they are selling–just as AOC did with every item she used to record that video. Everything was manufactured or produced by people seeking profit from the phone, internet service, clothes, mascara, or glasses she used. AOC’s productions are just another demonstration of a capitalist promoting themselves and their product.

And while innovators increase their wealth from capitalism, the biggest benefit flows to society in the long term. Yale University professor and Nobel-Prize-winner William D. Nordhaus analyzed the role of innovation in economic growth and came to the conclusion "that only a minuscule fraction of the social returns from technological advances over the 1948-2001 period was captured by producers, indicating that most of the benefits of technological change are passed on to consumers rather than captured by producers." 

As markets liberalized and capitalism flourished the world has seen a historical reduction in extreme poverty.  As a result, "the share of people living in extreme poverty around the world has fallen continuously over the last two centuries."

World population living in extreme poverty
World population living in extreme poverty | • CC BY

No other system has done more to reduce poverty than capitalism. Thanks to a free-market economy, innovation has flourished over the last two centuries and life expectancy around the world has doubled, according to Our World in Data

According to the World Economic Forum, the number of people worldwide living on less than two dollars per day today is now less than half of what it was in 1990. To be sure, the most significant gains in the fight against poverty have occurred in countries that have opened up their markets to allow more competition from their otherwise centralized economies, such as China and India.

Capitalism has also allowed more government spending to take place, which pays for higher salaries for government employees and public officials. This includes AOC’s $174,000.00 annual Congressional salary, which has steadily increased for U.S. Representatives throughout the years. As GDP has grown substantially in the last century, most governments have access to more resources today than before due to taxation generated from the wealth created by capitalist economies. This leads to governments having more opportunities to engage in public spending and redistribution through social programs, which would not have been possible without the rise of capitalism. 

Total government spending, including interest government expenditures, as share of national GDP
Total government spending, including interest government expenditures, as share of national GDP | • CC BY

Ironically, NY's 14th district, which has a 49% Hispanic population, elected a representative with the same collectivistic rhetoric that led millions of Latinos to leave their home countries.

Why is AOC so focused on attacking the same system that allowed her to be in this position of power? 

Austrian political economist Joseph Schumpeter may have an answer.  He feared the success of capitalism would create a distinct class of academic intellectuals–and people whose worldview comes from textbooks instead of real-life experiences, blaming capitalism for all of society's social ills. 

Schumpeter argued that the wealth created by capitalism would lead to another collectivist political ideology known as corporatism with values hostile to capitalism, that let large interest groups control the state. He said this was particularly true among intellectuals  who are "in a position to critique societal matters for which they are not directly responsible and to stand up for the interests of other classes" and want to  be seen as caretakers of society's general well being—anoint[ing] themselves as leaders of the labor movement." 

Neither Intellectuals nor politicians are innovators who create jobs and wealth, and many are unsatisfied as they "easily become psychically unemployable in manual occupations." Yet it is these same "intellectuals"– or the jobless educated – who push for restrictions on entrepreneurship and undermine the capitalist order. Simply put, these types of folks figure if they can’t figure out how to succeed as an entrepreneur or innovator, why should anyone else get to be?

AOC, a Boston University graduate and a bartender turned politician, fits this group of the underemployed educated who see themselves as the caretakers of society. Despite her double major in International Relations and Economics, AOC's voting record and her rants to the public suggest she is utterly ignorant of the latter, just as Schumpeter feared.

AOC's mischaracterization of the free-market economy should not surprise us since she seems blinded by an ideologically driven fairy tale world. But this is understandable since she is not a scholar, but rather a college grad bartender turned politician who probably believes her degree qualifies her as the former. As Hayek would say about  Marxists who denied the benefits of industrialization, AOC does not acknowledge capitalism's successes. Instead of approaching capitalism with the impartial rationality of a scholar, she attacks it with the ideological driving force of a propagandist.

AOC's struggles with the system are inconsistent with knowledge and facts. Despite her beliefs, there is a core reason why people, even without "capitalist money" [we will assume she means capital instead of magic tokens] or even her expensive college degree support the free-market system; because no other system guarantees every individual the personal liberty to pursue widespread social wellbeing, prosperity, and peace. 

So here’s a little secret of our own: AOC would be wise to recognize how her own life has benefited from capitalism instead of hypocritically pushing the same socialist ideas that have resulted in the poverty and misery seen in Cuba, Nicaragua, and Venezuela. 

Contrary to her misperception of reality, we get capitalism. We get socialism, too. We’re just not sure she does.