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May 31, 2015


The Constitution and its Bill of Rights nowhere set forth any requirement that we are to have capitalism as the working order for our economy, apparently with the view that that was taken for granted or that future generations could make their own choices of economic model to fit their times, or both. Though our forefathers were farmers, businessmen, shopkeepers, tradesmen and the like whose business activities can be roughly described as “capitalist” (probably following the English practices then in vogue), there was no legal or constitutional compulsion at the time to be a capitalist, socialist or whatever. It therefore left future choice to pragmatism, i.e., whatever works for whomever whenever.

So how is capitalism as our economic model working these days, and for whom? Is it as currently practiced repugnant to rule of the people by its purchase of their representatives and opposition to regulation of its conduct in the people’s marketplace? How responsible is the system as currently practiced to the needs and wants of the larger society in which it holds forth?  How well is the system as currently practiced serving all rather than a few of the people in this ostensible democracy? Would socialism or some form of libertarian Gilded Age capitalism run amok (see Cruz and Paul) serve the interests of all the people better, or are we the people with our battered and much-maligned democracy even to be considered in capitalism’s myopic pursuit of power and profits? In short, has “democracy” become excess baggage to be bought and controlled by capitalists via propaganda and “campaign contributions” and pretense of concern but without any real regard for the wants and needs of all the people? The answer is yes, so now what?

What are our alternative choices and what are their shortcomings? Are we too deeply mired in the present system to realistically have a choice? John Maynard Keynes, perhaps my favorite great economist of the 20th century, had this to say about capitalism: “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”

Keynes had a sharp sense of humor, so (though he died in 1946) I will respond in like fashion to the unanswered question he posed as follows: “Not to worry, Professor, corporate PR people will assemble propaganda from their right wing think tanks and take to the corporate air waves and corporate printing presses and square greed with democratic idealism. Greed is not only good; it is the heart and soul of capitalism and its pursuit a matter of freedom in a democracy. Corporations are job creators (in China) and occasionally pay chump change taxes to our IRS etc., so just who are you calling wicked?”

So with the foregoing commentary and mini-history in re our current mismanagement of the levers of economic power intermixed with those of government in mind, just where are we? What form of economic system should we embrace today with globalization and robotization of even expert labor upon us? There will always be right and left wing answers to this ultimate question based on ideology, of course, but what from an objective stance seems the best fitted economic system to serve all the people today in service of democracy (self-government) and the peoples’ best and abiding economic and social interests?

Perhaps surprising to some who feel that a liberal cannot be a capitalist, I vote for capitalism, but with several caveats. I vote for regulated capitalism, a system which proved that both corporations and the people can prosper after FDR’s New Deal came up with regulatory agencies that regulated the excesses of capitalists who had given us the Great Depression. Proof that regulated capitalism works is found in post-WW II’s boom times, when corporations paid their fair share of the tax load and the marginal productivity of their workers to their workers. The economy boomed, the middle class expanded rapidly as did both corporate profits and workers’ wages. Millions of new homes were built, the interstate highway system was constructed, the GI bill educated millions of Americans and, unlike today, there were concerns of too much money chasing too few resources (inflation).

Regulated capitalism can work, but capitalists and their congressional toadies these days are very much opposed to any form of regulation and loudly proclaim that regulation is “anti-business” and “anti-free enterprise.” Apparently greed is good but regulation is not, and Wall Street propagandists have persuaded many that government should leave business to its own devices (though we tried that recently with under-regulation of investments in derivatives and blind regulatory eyes to massive mortgage fraud engineered by the big banks which wound up in bailouts and the Great Recession, from which we the people – but not Wall Street – have not yet fully recovered).

It seems to me that if we are to have a capitalist economy that it must be a regulated one. We have seen what happens (a near world-wide depression) when our regulators are asleep at the switch. Simply stated, yes, regulations designed to protect the system and the rest of us from failure may require that corporations and others alter their conduct in pursuit of the buck and that greed take a back seat to caution. We all have to realize that this is our marketplace and that traders and others are only players in our playpen and don’t own it. As such, they should either follow our rules or go home because what they think is best for them may not be the best for the rest of us, and we have a right and even duty to protect our own property.

If we are not to have public regulation of corporate activities, then I think our democracy will finally and totally fail and that our economy will become that of the new owners, the corporate oligarchy, a rather dreary if temporary prospect before chaos sets in. We’ll see.   GERALD     E


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One Comment
  1. billy1926 permalink

    I agree with your final surmise. If compared, I probably see it as further along in its maturation than you. Or perhaps I should say that it is already more deeply imbedded in our system than you believe it to be. It will come to the surface more noticeably with our next war – perhaps to its full extent.

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