No Time for Socialists

May 17, 2016, 10:30 AM UTC
Alan Murray
contract Armin Harris
Photograph by Wesley Mann for Fortune

Bernie Sanders may not win the Democratic nomination, but he appears to be winning the hearts and minds of the next generation. A poll out this spring found 51% of Americans ages 18 to 29 do not support capitalism. Only 42% do.

That’s a remarkable finding, given the era in which these young people grew up. As World Bank president Jim Yong Kim told the Shared Value Leadership Summit recently, nearly half the world lived in poverty a quarter-century ago. Today it’s less than 10%. The reason? Not the World Bank, not government aid, not NGOs. Rather, it’s an extraordinary triumph of capitalism. If members of the next generation want to change the world, their own history should prove that private property, free markets, and the pursuit of profit are the most powerful tools they have for doing so.

Moreover, while China is the engine behind that striking transformation, the leadership role of the U.S. can’t be understated. Who would have guessed at the turn of the century that American business would remain as dominant as it is in 2016? Sure, dozens of Chinese state-owned behemoths have joined the global corporate aristocracy in the past two decades. But it’s still mostly American companies—including new tech giants like Amazon (AMZN), Alphabet (GOOGL), and Apple (AAPL); old stalwarts like GE (GE) and IBM (IBM); and a host of innovative startups, from Airbnb to Uber—that are paving the path to a new industrial revolution. When business leaders from around the world set out to understand the future of business, they don’t start in China. The U.S. is still their first stop.

Young Americans can be forgiven for focusing on the system’s warts. The financial crisis of 2008 taught them that blind pursuit of profit can have catastrophic consequences for society. And they’ve seen bad actors—drug company Valeant (VRX) is the latest poster boy—milking the system for private gain at public expense. Moreover, globalization and winner-take-most dynamics have contributed to inequality in the U.S. and hollowed out the middle class.

The incendiary rhetoric of Sanders, Clinton, and Trump, however, has painted the system’s failures as a failed system—and they have a responsibility to know better.

At Fortune, we celebrate business successes while shining a bright light on the ­lapses. In our June 1 magazine issue, we look at one of the more pronounced trends of recent years: the retreat from public equity markets. While public markets offer broader access and better transparency, they’ve come under attack for creating an unhealthy focus on quarterly earnings and short-term profits to the detriment of long-term value and job creation. Many public companies—Dell is a prominent example—are happily retreating to private equity, where they feel they can better retool their companies for the future. In the meantime, many startups—which once viewed the IPO as their threshold of success—are delaying listing in public markets.

We suspect this trend will turn. It’s encouraging to hear BlackRock (BLK) CEO Larry Fink—whose company’s $4 trillion of assets under management make it the 800-pound gorilla in public markets—decry the short-term focus of many investors and call on companies to lay out a “strategic framework for long-term value creation.” It’s also encouraging to see companies represented at the previously mentioned Shared Value Leadership Summit discuss how they can put the profit motive to work to solve social problems. Capitalism—that is, open, transparent, ­American-style ­capitalism—is still the best bet we have for building a broadly prosperous world. But it can, and should, do better.

A version of this article appears in the June 1, 2016 issue of Fortune with the headline “No Time for Socialists.”