According to a recent survey at ZeroHedge.com, Americans age 18-29 respond negatively on net to the word "capitalism" (47/46), versus a net favorable (49/43) response to "socialism."
A lot of the blame for response this can be laid at the feet of the capitalists themselves. As I've said many times, if the "free market" meant what capitalist apologists mean by it, I'd hate it myself. Young people constantly hear "free market capitalism" used as if it were one word. And hear see politicians, corporate spokespersons and media talking heads explaining that stuff like patent-inflated drug prices, skyrocketing CEO pay and stagnant wages, the Keystone XL corporate welfare scam and the Bain Capital model of strip-shop capitalism are all parts of "our free enterprise system."
Twenty-somethings are presumably reacting to the connotations "capitalism" = "everyone gets screwed over so the rich can get richer, and "socialism" = "people are treated like human beings." These connotations are promoted by both mainstream coalitions in our society; the only difference is people like Romney talk like it's a Good Thing for people to get screwed over to make the rich richer.
Meanwhile, the dirty little secret of the Democratic side is that all these "progressives" promoting state intervention to make capitalism less onerous to those under its yoke (aka "help working families") are just another wing of the same capitalist ruling class. The main reason they do this, and the main reason they expanded the social safety net under FDR and LBJ, is to stabilize capitalism — to enable it to extract profits on a more sustainable basis on the long run.
As Marx said of the Ten-Hour Day law in Britain, the primary function of "progressive" legislation by the capitalist state is to overcome Prisoner's Dilemma problems among individual capitalists and force them to act in the collective interest of capital — in his words, to come to an agreement on the manuring of their fields so individual farmers don't strip the soil in the interest of short-term profit.
I like to depict conservatives and liberals as farmers. The conservative farmer thinks she'll come out ahead giving her livestock short rations, working them to death and replacing them. The liberal thinks she'll get a higher margin in the long run by taking care of them and working them in moderation. What the Democrats and Republicans don't tell us is that they both represent different factions of capital — both of them interested in us primarily for our services as livestock.
This is a huge opportunity for us on the libertarian Left to propagate the meme of freed markets as an egalitarian force against corporate power and plutocracy.
This target demographic, for the past several weeks, has had its YouTube videos repeatedly interrupted by Thomas Peterffy's pearl-clutching at the idea of equality as if it were an abomination straight out of the Communist Manifesto. They're wide open to be exposed to the truth: Present levels of inequality exist because billionaires, CEOs and corporate welfare queens are the primary beneficiaries of state intervention in the market.
What's happened is, the 18-29s have bought into the meme that what we have now (corporate plutocracy) is what naturally happens when there's no state interference in the market. Because neither the Democratic nor the Republican wing of the corporate ruling class has any interest whatsoever in challenging this misconception, these young people have predictably decided that Western European-style social democracy isn't so bad after all. Of course! If I thought the only alternatives were the kind of banana republic people like Tom Delay and Dick Armey want, and German-style work hours and a social safety net, I'd choose social democracy myself.
So we need to be telling as many people as possible that these are not the only alternatives. We need to be promoting the hell out of the meme — something many have yet to hear for the first time — that the state is the chief culprit behind the system of corporate plutocracy we have now. We need to share the truth — carefully concealed by both Obama and Romney, that it's the capitalists' state.