Leading economist warns of rise of 'Gen Z affordability socialism'

LAS VEGAS — At this year's Freedom Fest, a gathering of free‑market enthusiasts, libertarians and policy scholars, Diogo Costa, president of the Foundation for Economic Education (FEE), delivered a cautionary message: while artificial intelligence reshapes the economy at breakneck speed, the real threat to long‑term prosperity may be a revival of anti‑market ideas that use the cost‑of‑living crisis as a rallying cry.

"The biggest challenge today is the different ways that ‘anti‑economics’ keeps reappearing," Costa told the audience. "And this time, it’s reappearing through a new kind of socialism—cost‑of‑living socialism, affordability‑crisis socialism."

Costa, who grew up in Brazil during the hyperinflationary 1990s, recounted a childhood shaped by rapid price changes. "When I was 10 years old, yearly inflation was above 1,000 percent," he said. "Prices were changing literally every day. My parents had to turn a bedroom into a pantry because when they got their paychecks the first thing they did was go to the grocery store and buy everything they could." He also remembered the frustration of being unable to buy the latest video‑game consoles because Brazil’s protectionist policies limited access to genuine products. "I could get dupe video games, but I couldn’t get the real deal," Costa noted.

Those early lessons, he argued, illustrate why economic education must be refreshed each generation. "Milton Friedman said we never actually learn economics as a species, we learn as individuals, maybe as generations," Costa said, echoing Friedman’s observation that societies forget the lessons of hyperinflation and protectionism once the crises fade, making them vulnerable to the same mistakes.

The FEE president warned that many young people, while supportive of market economies in principle, are increasingly drawn to policies that impose price controls, rent freezes and government‑run grocery stores. "Young people, they want to live in a market economy," Costa said. "They don’t want to move to Venezuela or Cuba, but they want price controls in everything. They want to freeze the rent, they want free rides in buses, they want to make sure that groceries are either run by the government or price controlled somehow." He cautioned that this trend is not limited to a few urban centers. "This isn’t just a New York or California issue. It’s happening globally."

Costa also addressed the paradox of rapid technological advancement. "We’re in a golden age for technology, not necessarily for the ideas behind it," he observed. "When people talk about AI, they think all the jobs are going to be gone, that humanity is on the verge of extinction. There’s a lot of pessimism at the same time that you have these wonderful technologies. The ideas that help us explain and work with technology are what’s missing."

Referencing Austrian economist Joseph Schumpeter, Costa explained that capitalism tends to be economically powerful while culturally weak—companies produce marvels, but individuals can lose sight of how they fit into the intricate web of production. To counter that abstraction, FEE often turns to a humble example. "We sometimes go back to a pencil," Costa said. "We just ask people ‘do you understand how a pencil is made?’ Because if you see the complexity, the network, the amazing, marvelous market system around just building a single pencil, you start to understand how you’re part of that complexity and you benefit from it."

Leonard Read, FEE’s founder, warned that economics is always one generation away from turning prosperity into poverty. Costa echoed that sentiment, calling for continual re‑teaching of free‑market principles. "The good ideas need to keep being recycled, reframed, and communicated," he said. "If we don’t keep explaining how markets work, the next generation will be swayed by the next wave of anti‑economics."

The interview took place at Freedom Fest, an annual event that draws participants from across the United States and beyond. While the conference focuses on liberty and free‑market ideas, Costa’s message resonated with a broader audience: in an era when technology evolves faster than ever, the intellectual foundations of a market economy must be nurtured just as vigorously.

As policymakers grapple with rising housing costs, food prices and debates over government intervention, Costa’s warning underscores a central question for educators and public officials alike: can the principles of economic freedom be communicated clearly enough to offset the appeal of quick‑fix, price‑control solutions?

For now, Costa says the battle will be fought in classrooms, community forums and public discourse. "Education is the antidote," he said.