Is capitalism falling out of favor? We analyzed 400,000 news reports to find out
Capitalism, communism, and socialism are the three major economic systems in the world. While the term “economic system” sounds like a yawn, countless people fought and died in a major war that was supposed to be led by one side.
The switch from one system to another, like the fall of communism in much of Eastern Europe in 1989, changed the lives of millions of people. Although researchers know that a country's economic systems greatly influence people's living standards, less is known about how attitudes toward these systems change over time.
We are professors at Boston University's new Ravi K. Mehrotra Institute, which is dedicated to understanding how business, markets, and society interact. Given the many recent criticisms of capitalism, we were surprised to see that positive sentiment toward capitalism is slowly rising over time.
Main economic systems explained
Capitalism, communism and socialism are economic and political systems with different principles and organization. Capitalism emphasizes private ownership of resources and means of production, driven by profits and market competition, with minimal government intervention.
Communism, on the other hand, advocates a classless society in which all property is publicly owned. In communism, wealth is distributed according to need, private ownership does not exist, and the purpose is to eliminate inequality and oppression.
Socialism lies somewhere between these two extremes. It focuses on collective or state ownership of key industries and resources. This allows some private businesses to reduce inequality and achieve a more equitable distribution of wealth through social welfare programs.
Modern economies blend capitalism with socialism to address challenges such as inequality, market failures, and negative externalities (such as corporate destruction of the environment). Governments intervene through regulations, welfare programs, and public services to address problems such as pollution and income inequality. This creates what economists call a “mixed economy.”
The extent of state involvement varies from country to country. On the one hand, there is market capitalism, where the market dominates and the role of government is limited. The United States is one such example.
At the other end of the spectrum is state capitalism, where, as in China, the government directs economic activity while incorporating market elements. The goal is to combine market efficiency and innovation with measures to curb the social and economic costs of capitalism.
How to measure people's attitudes toward economic institutions
Some surveys directly ask people how they feel about these systems.
For example, Pew Research's most recent survey on the issue found that the share of Americans with a positive view of capitalism or socialism has declined slightly since 2019, but that overall, capitalism remains more popular. Still, Americans are deeply divided along partisan lines. About three-quarters of Republican voters have a positive view of capitalism, compared with less than half of Democratic voters.
Unfortunately, there are no long-term surveys tracking how people feel about these three systems. Because of this shortcoming, we used artificial intelligence to analyze references to the three systems in more than 400,000 newspaper articles published over several decades.
We used ProQuest's TDM Studio to identify all news reports discussing capitalism, communism, or socialism. Beginning in the mid-1970s, ProQuest has digitized nearly all articles from major English-language newspapers, including the Wall Street Journal and the New York Times, and preserved some archives from earlier years.
The AI model was designed to assess the tone of each article along multiple dimensions, including anger, surprise and happiness. After the model scores these qualities for each article, we classify the sentiment into three categories: positive, negative, neutral, or unknown. For example, an article discussing capitalism might be rated 60% positive, 20% negative, and 20% neutral.
Using AI large language models allows us to track changes in media attitudes over time – which, to be fair, may not be in line with popular opinion.
How opinions have changed since the 1940s
When we looked at newspaper articles from the end of World War II to the present, we discovered something unexpected. In the 1940s, capitalism was not taken very seriously. Articles containing “capitalism” or “capitalism” received an average of 43% negative sentiment score and 25% positive sentiment score. This is surprising since we study newspapers published primarily in countries with capitalist systems.
However, just because capitalism doesn't get high positive scores doesn't mean newspaper writers like communism or socialism. In the 1940s, articles containing these words also received high negative ratings: Articles containing “communism” or “communism” had an average negative rating of 47%, while articles containing “socialism” and “socialism” The average negative rating for articles is 46%.
Since then, however, positive sentiment toward capitalism has improved. In the 2020s, articles about capitalism received an average of a more balanced negative sentiment score of 37% and a positive sentiment score of 34%. While capitalism is clearly not loved by the media, it is not as disparaged as it was after World War II.
Over time, news media attitudes toward capitalism have improved more than attitudes toward socialism or communism. In the 1960s, positive attitudes toward all three were broadly equal. Today, however, positive sentiment toward capitalism is 4 or 5 percentage points higher than in the other two countries. This rise is not stable, as the number of positive articles about capitalism declines during recessions.
Still, some contemporary commentators worry that capitalism is in crisis.
Not long ago, the New York Times, a newspaper in the world's financial center, published an op-ed titled “How Capitalism Is Derailed.” A recent book review in the Wall Street Journal, the bastion of capitalism, begins: “Our universities teach us that we are living in the end of an era of 'late capitalism.'”
But while capitalism is clearly not loved by everyone, we find no evidence that it is being surpassed by socialism or communism. Instead, by using artificial intelligence to process the attitudes reflected in thousands of newspaper articles, we found that people—or at least the media—are slowly becoming interested.