Crushing Capitalism: How Populist Policies are Threatening the American Dream

by Norbert J. Michel

Have you heard this narrative? The middle class has been hollowed out because of an overreliance on free markets. Americans can’t compete with low-cost labor and imports, so all the good jobs in America have disappeared, especially those in manufacturing. It’s a dismal argument that many politicians, even some on the right, have spent the past few years spinning. They say that the American dream is dying and that only wealthy Americans have been successful for the past few decades. Supposedly, free trade, immigration, and unabated technology have resulted in an economy that no longer works for Americans. The problem with this bleak story is that it is completely wrong.

They’re misreading both the current level of prosperity in America and how it was created. Americans have been growing richer since the end of the 19th century and now enjoy levels of abundance and opportunity unimaginable 150 years ago. More recently, American incomes have not stagnated, lower-income Americans have done much better, and the middle class has grown robustly. The American economy is not perfect, but moving further away from free markets and implementing industrial policy, as these politicians want to do, will make Americans worse off. More government intervention and restrictions on economic freedoms will kill the American Dream, not save it. In Crushing Capitalism, Norbert J. Michel makes the case for maintaining perspective on how well Americans have done during the past few decades and nurturing the institutions that have enabled Americans to succeed.

Genres: Politics, Economics

205 pages, Paperback

First published April 22, 2025

Reviews

[Robert · Rating 5 out of 5]

As a long time supporter of the Cato Institute I have always supported economic freedom and I am pleased that academic research provides evidence to support the premise that maximizing freedom maximizes economic outcomes as well "feeling best" for myself as an individual. This book helped me banish an number of false narratives from my worldview that have been corrupted by mass media propaganda. The one I found most surprising was that it is NOT true that economic inequality was growing, it in fact, is the opposite, the middle class is only shrinking because so many people have earned above the arbitrary threshold used to define it, i.e. they graduated to the upper-class! And this was not the only surprise in this book; another surprise was that the lowest income group has actually seen the largest increase in purchasing power, which is a far better measure of economic welfare than their annual income. When attempting to measure outcomes over decades, one must not only adjust for inflation, but quality of life issues. In 1960, no-one could buy a supercomputer that fits in their pocket, has access to almost all of mankind's knowledge, and can communicate with anyone instantly anywhere on the planet. Now, even the "poor" carry these things. Is this not an increase in wealth? All modern electronics, computers, widescreen TV's, smart washing machines, self-driving cars these devices contribute to the quality of our lives and are affordable because of the division of labor, and a world-wide supply chain. These qualitative differences in how we live are hard to quantify and put in a spreadsheet. Also, author point's out that these so-called "high paying manufacturing jobs" are a bit of nostalgia, the truth is many manufacturing jobs in the past exposed employees to toxic chemicals, repetitive strain injuries, and mind-numbing boredom. They are not jobs any young people would tolerate today. Let us do a better job of reflecting upon our gifts and do our best to not kill the golden goose that provided these benefits, the free market, capitalism. And let us not take for granted that America is the country people from around the world come to for the opportunity to improve the circumstances of their lives. We must have been doing something right to get where we are, let us not wreck it for future generations. Read this book and pass on the truth which is worth celebrating!

[Josh · Rating 4 out of 5]

For years, the Cato Institute has been the gold standard for think tank research. As such, I had high expectations for this book. It's really good, but contains some editorial flaws.

Michel provides numerous metrics debunking claims of statists and populists. Contrary to President Trump's claim in 2015 that America doesn't make anything anymore, our manufacturing output is at near-record levels. Our ability to make more with less man-hours is not a sign of weakness. The greater productivity raises our standard of living. Chapter 7 provides an avalanche of data to validate these points: quantifying America's increased standard of living for all income brackets, exposing flaws in how income inequality metrics are reported, showing the "time price" for basic commodities fell by 75%.

However, the book could have used more oversight. With a subtitle calling populism a threat to the American dream, I expected the policies of the most consequential populist president in American history to come under greater scrutiny than what occurred. How were communities devastated by his first immigration crackdown? The question is never addressed. Regarding Trump's first trade war, the harm done is relegated to a statistic-free footnote --why isn't this expanded into the main narrative with statistics? This is another missed opportunity. Also, if you're going to make an argument on how immigration "prevented economic decay" in small towns (a point I don't dispute), don't use as an example immigrants working for Tyson Foods in Perry, IA--the plant closed 10 months before Crushing Capitalism was published.

When it comes to books explaining the benefits of global free markets, I prefer Daniel Griswold's Mad About Trade and Johan Norberg's The Capitalist Manifesto. Michel's book serves to complement their work, but falls a bit short of their high standards.

[Passionate · Rating 5 out of 5]

Canary in the coal mine. Will the world listen? Socialism kills and never works. Sad to see the American Dream twisted, heading toward the American nightmare with people like Zohran Mamdani.