Sept 2019
I am not against capitalism. (a response to my Dad)
My Dad commented in an email that I am Anti-capitalist. This is not true. His statement comes from this false set of assumptions: liberal means socialist means communist means anti-capitalist.
This is what I think. Capitalism only functions at its peak when regulated to protect it from its own tendency to self-destruction through greed and short-term thinking.
At this moment there is in process exactly that self-destruction by widening the wage gap so wide as to tend toward revolution. When a company ships jobs overseas the market shrivels because wages are so low at home. They destroy their own markets by short term gain resultant from reducing the wages of the employees or just creating fewer well paying jobs.
First are examples of the results of lack of regulation: the tobacco industry that knew their product was deadly but fought tooth and nail to prevent regulation, made their products more addictive, and paid movie studios to show people smoking in their movies; the oil industry that has known for years that their emissions are adding carbon to the atmosphere, that this was bad for it and the people, but went ahead and created the anti-climate “science” used today by trump, republicans, the right, they were so effective they cannot even stop trump from ruining their own plans for the future by removing emissions controls; the crashes of 1939, 1986, and 2008 were caused by a lack of regulation of stocks, electronic trading, and the housing bond market respectively (in the last example all of the minimal attempts to prevent a repeat have been removed by trump and the republicans—the Trumpian attempt remove the “black stain” from the white house); the 1911 shirt waist fire that killed 146 people, mostly women, who were locked into the building. Second there is a lack of oversight: Enron, the opioid crisis, and the violent anti-union movement before 1937.
Interesting the anti-union violence mostly stopped in the late 30’s. Between then and the late 60’s was the time of greatest prosperity for most Americans. The reason for this starts with WWII which was a large government economic stimulus package just like the one, though the latter only in monetary forms, that Obama implemented (a Bush II design) to end the 2008 crisis that started the massive growth that trump, trying to rid the black stain from the white house, is trying and succeeding in stopping and preparing to reverse.
The main success of this was the regulation of capitalism in several forms. One was to allow, by law, collective bargaining. Thus, the creation of unions: the right to have peaceful assembly (in order to form unions was added), the right to organize, free speech laws applied to the work place, laws requiring cause for termination; and implementing in law many of the things unions fought for: the eight hour day, child labor laws, the minimum wage.
Recently we have seen another method of controlling capitalism, the protest. Public protest in varying forms is a similar method to the union strike but for different reasons and manifestations. Walmart is considering lowering their gun and ammunition sales and not allowing customers to carry guns into their stores. This is a result of a shooting and public response to this product (there seems to be a hint that they just do not want to bother with the new background check requirements also—which would be pure cynicism on their part). I am sure Walmart has done the math and decided they can get public Brownie-points while not losing many of their customers. Another example is Fox News firing of Bill O’Reilly for sexual harassment allegations and the History of the channels cover-up of the same during his tenure there. Again, capitalism does the math. When advertisers threatened to pull their ad space from the network it fired O’Reilly. These are not moral decisions but capitalist, they are purely cost benefit analysis.
The other control of Capitalism that created the middle class we all think of was a high, actually gradual, income tax. This encouraged the rich to invest in new ventures, to invest in arts and culture, to create new jobs, and pay employees more. The tax revenue allowed the government to encourage and do Research and Development (e.g. the internet) which prospered business in the private sector, to invest in colleges, to spend on infrastructure like the interstate highway system, to do things like go to the moon.
This created and prospered the middle class.
These things created the growing, prosperous, and educated middle class that is what people think of when they think nostalgically of “making America great” (not the Trumpian Republican meaning). Keep in mind we are talking about white people mostly. This was the period when Blacks were fighting for the things given them a hundred years earlier at the end of the Civil War and women could not get bank loans and neither group gets paid the same as white men to this day.
But then it began to end. Cheap credit sucked the middle class, and lower classes (e.g. Visa made a conscious decision to send credit cards to the poor; they did the math that they would make more money from interest and late fees than they would lose by having to cancel and write off some debts—greed has no morals). Another cause, demonstrating the law of unintended consequences, Congress passed a campaign donation reform act to prevent the use of campaign funds in nefarious ways. This was to prevent a repeat of the Nixonian misuse of campaign funds. But it added money to campaigns which has led to policy through buying politicians and increasing lobbyist influence. These policies lowered taxes on the rich; began the exodus of money for tax avoidance; gutted the IRS–they mostly go after the poor now; and has resulted in the disenfranchisement of the poor and minorities through deliberate attempts by Republicans and through the over influence of lobbyists; destruction of unions; technology (which was coming anyway) which saved costs but did not get replaced by paying workers more but less; wage stagnation; shipping jobs overseas.
These are killing the middle class. Killing the very idea we use as the “idyllic America”. The Trump Republican administration is systematically destroying the middle class. The party for the white rich that began in the 70’s is now accomplishing its goals. Though Trump has the added goal of getting rid of the “black stain” on the white house that he demonstrates in a hundred ways. He is now making changes contrary to the very rich people and corporations, like the car industry in California, that supported him.
“We have always known that heedless self interest was bad morals, we now know that it is bad economics.”
― Franklin Delano Roosevelt
In conclusion, I am not anti-capitalist. I know, historically, capitalism must be regulated to function at its best for society, to curb its baser instincts. The debate should be how, where, and when to do this, not if. This is, in fact, what liberalism is, working through legal legislative means to improve the society for everyone. Once the regulations are passed then the tweaking to improve them starts. It is never-ending work with the goal being what we used to call fairness in America. Imputing a moral instinct to capitalism does not fit any historical record. Adam Smith felt that greed would make capitalism work, but short-term thinking and greed destroy capitalism, democracy, and America. The imputed success without restriction, the mythical “free economy”, has never existed in America and the historical record shows the worldwide disasters possible when regulatory needs are missed. Doing the best it can for everyone is liberalism; it is not the winners v. the losers; the rich v. the poor; whites v. the minorities; not the “natives” v. the immigrants. Everyone can win.
Hark 