In a robust defense of the free market, economist Philip Cross has challenged a recent sweeping critique of capitalism, arguing that its unparalleled success in lifting global living standards over two centuries is the most important fact often overlooked by its detractors.
A System Without a Serious Challenger
Cross, writing on January 20, 2026, addresses the arguments presented in Harvard historian Sven Beckert's massive work, Capitalism: A Global History. The 1,300-page tome offers a relentless criticism of the economic system. However, Cross poses a fundamental question: if capitalism is so deeply flawed, why does it remain the world's only credible economic model? He notes that while opponents frequently propose regulating it or redistributing its wealth, no serious alternative to the collectivist model has emerged since its discrediting.
Flawed Methodology Overlooks Economic Reality
Cross argues that Beckert's methodology, which employs "the tools of social history," critically excludes core principles of economic analysis and rigorous statistics. This leads to a significant blind spot: the failure to recognize the documented, close relationship between real wages and labour productivity.
This oversight, Cross contends, allows Beckert to subscribe to a popular but false narrative. This narrative claims capitalism's fundamental dynamic is the constant suppression of wages through evolving means like slavery, precarious work, and offshoring—a theory dating back to Marx's discredited prediction of capitalism's self-destruction through worker immiseration.
"If real wages did actually lag behind productivity... the resulting drop in mass consumption and decline in living standards would have undermined capitalism long ago," Cross writes. "The reality is just the opposite."
The Engine of Progress: Innovation, Not Just Efficiency
While firms naturally seek efficiency—exemplified by Amazon's low-cost, rapid delivery—Cross identifies the true source of capitalism's dynamism. It is not merely efficiency but relentless innovation, what economist Joseph Schumpeter famously termed "creative destruction."
He points to what economic historian Deirdre McCloskey called "the Great Enrichment," driven by the explosive introduction of entirely new goods and services. Today, average people possess technological wonders—from instant global communication to home environment control—that were unimaginable to the wealthiest elites a century ago.
Cross acknowledges that Beckert grudgingly admits some improvement in living standards over the past 200 years but dismisses these gains as limited geographically. Beckert also attributes them incorrectly to unionization and social-democratic politics, rather than the boost to real incomes from higher productivity. When other arguments falter, Cross notes, Beckert attempts to diminish capitalism's role by blaming it for climate change.
In conclusion, Philip Cross's central argument rests on the empirical evidence of history: capitalism works. Its ability to generate innovation, raise productivity, and dramatically improve living standards across the globe stands as its definitive rebuttal to critiques he views as long on ideological narrative but short on factual economic analysis.
