Former Republican presidential candidate Ron Paul once famously said, “Capitalism should not be condemned, since we haven’t had capitalism.”

Joseph S. Diedrich, a student at the University of Wisconsin-Madison and the campus Director of Operations of Young Americans for Liberty, agrees and then offers his own arguments defending the free market system.

So many wrongs in the world today are mistakenly linked with capitalism–on both the Left and the Right.

Proponents of free-market economics, and the most feverish detractors thereof, are all too eager to resign to the slogan, “Well, that’s capitalism.”

It must be capitalism that is responsible for the presence of inequality and exploitation, for example. Indeed, nearly everyone seems to believe that capitalism causes adverse side effects; they just differ on how they think those ills ought to be remedied, if at all.

Some favor a dismantling of the entire system, while others propose tinkering around the edges to correct a few “market failures.”

They’re all wrong.

…Unfortunately, true capitalism has never existed at any point in history. Nonetheless, the current war against capitalism as it operates in America today doesn’t help matters. Capitalism has received a very bad and undeserved rap.

The rich and the poor: A recurring indictment against capitalism is that the drive for profits serves the wealthy at the expense of the “common man.” However, a simple analysis of this claim proves it untrue.  In a completely capitalistic society—that is, one free of special privileges and subsidies and bailouts—entrepreneurs strive to make money in the form of profits. ..

Humanity and compassion: Along these lines, another common folly is the sentiment that capitalism—particularly its ostensible focus on money—is inhumane or uncompassionate.  But the real focus of capitalism is not on money itself, but rather on wealth in the form of goods and services…..

Income inequality: This assertion is true to a certain extent: income inequality does and will always exist in a capitalistic society. But we must ask ourselves if income inequality, in and of itself, is in any way negative…Pepperdine University economics professor Gary Galles adds: “Whatever level of wealth one starts at, the way to get wealthier in a market economy is not to make other people poorer but to make them better off.”

Idealism: Many assert that unadulterated capitalism is too idealistic….Capitalism, on the other hand, rests on the realistic presupposition that knowledge—both individual and collective—is severely limited, and that society functions best when individuals make decisions for only themselves.