Socialism vs Capitalism: Five Myths That Refuse to Die

John Stossel’s recent YouTube video, “The Complete Guide to Socialism vs Capitalism (Myths Explained)”, tackles an argument that never seems to go away—despite a century of real-world evidence.

Socialism, we’re told, only fails because it’s never been done “properly.” Capitalism, meanwhile, is blamed for inequality, greed, exploitation, unsafe workplaces, and even unhappiness. Stossel methodically dismantles both claims by confronting five enduring myths about socialism and several equally persistent myths about capitalism .

Myth 1: “That wasn’t real socialism”

From the Soviet Union to Venezuela, defenders insist failures don’t count because they weren’t true socialism. Stossel points out the obvious: abolishing private property and placing production under collective (read: state) control is exactly what socialism demands—and exactly what produced shortages, repression, and collapse in practice .

Myth 2: Socialism fails because of bad luck or sanctions

Venezuela’s disaster is often blamed on oil prices, U.S. sanctions, or poor management. The video argues these are distractions. Other oil-dependent nations didn’t descend into mass hunger. The common factor was central planning’s inability to adapt to reality—a problem markets solve daily through millions of decentralised decisions .

Myth 3: “Democratic socialism is different”

Socialism may begin with elections, but once the state controls livelihoods, dissent becomes impossible. Economic dependence quickly turns political power into permanent power. History shows that economic freedom is a prerequisite for political freedom—not the other way around .

Myth 4: Scandinavia proves socialism works

Stossel reminds viewers that Sweden, Denmark, and Norway are not socialist economies. They are market economies with high taxes and strong property rights. When Sweden experimented with heavy state control in the 1970s, it reversed course after stagnation set in—cutting taxes, privatising industries, and restoring growth .

Myth 5: Capitalism enriches the few at the expense of the many

Capitalism isn’t a fixed pie. Entrepreneurs create new wealth, and research shows they keep only a small fraction of what they generate. The rest flows to consumers through lower prices, better products, safer workplaces, and higher living standards. The poor and middle class are vastly richer today than their grandparents—not despite capitalism, but because of it .

Stossel also addresses claims about monopolies, “robber barons,” unsafe workplaces, automation, and job loss—arguing that most genuine monopolies and inefficiencies are creations of government intervention, not free markets .

This video doesn’t pretend capitalism is perfect. It argues something more modest—and more important: no other system has lifted more people out of poverty, created more opportunity, or allowed more freedom of choice.

If you’re tired of slogans and want evidence instead, the video below is well worth your time.