Let me start this by saying, I’m a capitalist. I like capitalism because I like the idea that, when you perform a service or manufacture a product that someone needs or wants, you receive compensation that bears some relation to the value of that product or service to the individual or group who purchased it.
For the record, I also like Ben & Jerry’s ice cream, but I realize that moderating my intake is wise, lest I blow up like a balloon. Moderation and proper perspective are our friends.
I’m not a socialist, at least with regard to whole economic systems. While I’m not much for cynicism, I simply don’t have enough faith in people to think such a system would work. Create a socialist economic system, and I'd almost guarantee someone or a small group of people who would want more than the system offered, and cause such a system to collapse. Look at China and Vietnam for two examples. Both systems are “communist/socialist” in name only; both are becoming strong capitalist economic powers. But there is a reason they work, and it's the same reason our system used to work extremely well, and for the last 30 years or so, it’s worked a bit less so.
For capitalism to work, it needs regulation. It’s also necessary to acknowledge the fact that, for capitalism to work, there has to be a small pool of available labor, and some folks will always be left out of the system, so we should have mechanisms to make sure a safety net is in place for everyone to use when necessary. We’re not just talking about a few token regulations; there has to be enough regulation to keep commerce honest, because many capitalists simply won't be honest on their own. If we learned nothing else from the mortgage meltdown, it's that capitalists cannot be counted upon to act in the best interests of anyone but themselves. Another example is the illegal drug trade. It has no regulation, so there is absolutely no incentive but conscience preventing a drug dealer from selling to your child.
Capitalism is not an honest system, naturally. it is motivated by profit, and only profit. This fantasy that some have that capitalism regulates itself because it has to do so to keep money flowing makes me chuckle. And we all know it's a fantasy, because there are examples of unregulated capitalism in world history, of course. They were called “feudal systems.” Here’s a great description of “feudalism” as described by Encyclopedia Britannica.
How’d you like to be a serf for Lord Gates or Lord Murdoch? Oh sure, they MIGHT give you enough food to eat and a hut with a thatched roof, if they need you to do something for them. And of course, farmers will have to produce food for them. But if there are a million of them, and 300 million of us, how much do you think they’ll give us in return for our service to them, if there are no regulations in place to keep them honest? For Chrissakes; they already balk at a minimum wage of $7.25 per hour and they try all they fought hard for the “right” to not have to provide you with health insurance. They want us to bow and congratulate them when they give an hour’s pay to a charity. When a few thousand families control 95% of the wealth in this country, what do you imagine they’ll do for you, out of the goodness of their hard hearts?
The Founders of this country were among the most successful capitalists on the continent at the time; most were incredibly wealthy. Yet despite that, they incorporated the regulation of capitalism into the Constitution. I know some of you – mainly those of you on the right wing, have never actually read the Constitution, but it’s in Article I, Section 8:
Section 8.
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
Wow. Imagine that, teabaggers. Not only is the Congress required (Note the use of the word “shall,” not “may”) to pay the debts of the United States on time; it’s supposed to provide for the “general welfare” (that means act in the best interests of all of us, to make all of our lives better), it’s required to borrow money as we need it, AND to regulate commerce, unless the commerce is completely self-contained in one state. Note that it’s also REQUIRED to collect taxes to pay for whatever WE decide will promote the “general welfare” of OUR country.
Now, why would those smart Founding Fathers – you know, the guys the teabaggers claim to admire, even though they obviously have no clue what they were about – require the federal government regulate commerce? If regulation is itself such a nasty prospect, why embed it into the document that provides the legal basis for everything we do, and everything we are.
That’s easy; it’s because they knew, almost first hand, what capitalism could do to people if it was left unregulated. In fact, if the teabaggers actually understood what the original “Tea Party” was about, they’d understand that it wasn’t about the taxes, it was about the lack of representation. It was about the British government giving certain corporations too much power, and not allowing colonists to have a say in how things were done over here. It’s not only simple-minded to claim that the rebels were against taxes; it’s also wrong. They wanted a free market that was friendly to them, and a government that looked out for them, and that meant a regulated market, to prevent feudalism from taking over and ruling the land.
Yes, I said feudalism. The ultimate in unregulated capitalism is feudalism; it’s what capitalism leads to in its natural state. Feudal societies were still something of the norm, globally speaking, at the time the Constitution was written. The industrial revolution was still fairly new and the concept of labor unions was nearly a century away. We already had a system of slavery in effect in this country, as well as a system of indentured servitude; without regulation, there is nothing that could prevent that from spreading and becoming the norm here.
Regulation of capitalism is also necessary to maximize opportunity. If one company or group of companies is allowed to dominate an industry, to the point that others are locked out of it, that actually inhibits innovation, and limits opportunity. It is possible to over-regulate capitalism, of course; if regulations are put in place that prevent entrepreneurs from growing and creating jobs and opportunity for others, that has the potential to be just as dangerous as no regulation. But the solution to such a situation is not to remove all regulation from the equation.
We have to be careful to not be so wedded to capitalism that we treat it with something of a religious reverence, which seems to be where we’ve been headed for a while. Pure capitalism shouldn’t apply to absolutely everything. It doesn’t make everything better, automatically. Whether or not we as a country do something for the common good should not be based on whether or not a relatively small group of people or corporations (no, they are NOT the same) can make money on it. Likewise, when something transitions from being simply a product or a service to being a necessity, the existence of that necessity should not be subject to "market forces." And we cannot let the ability to make money determine whether or not we do something efficiently or better.
A great example of what I mean is our approach to electricity generation. Put simply, our power generation system is a Grade A clusterfuck, compared to just about every country on the planet. Though electricity is an absolute necessity in every home and every business in the country, as well as in every common area, we have allowed pure capitalism to drive it for the last 30-40 years, and the result has been disastrous, with even more disaster potential awaiting us. We allowed our power system to be cobbled together from hundreds of smaller power system, with an ad hoc attempt to link them altogether in a “grid” system that pretty much every expert in the field acknowledges is a disaster waiting to happen. Essentially, there was never a central plan, and electric companies were allowed to build out locally, with little consideration of what was needed nationally, or even regionally.
Compare our system to the systems throughout Europe and Asia, where most systems within each country were planned meticulously, with redundancies built in that prevent massive blackouts. In many cases, private companies run the plants themselves, and private contractors service the grid. But it’s all done based on comprehensive government plans, designed to maximize efficiency and benefit for the country. That is where we fall down in our seeming worship of capitalism over everything; leaving hundreds of electric companies to build our their own systems, without regard to compatibility with other systems, or without a solid plan to connect everything is just a complete waste of time and money. And it makes us vulnerable to problems.
We also have to realize that the natural state of capitalism leads to something that is decidedly anti-capitalist in nature. A prime example of this is something we deal with every single day; oil.
If any of you are still operating under the delusion that oil is basically a capitalist enterprise, with stiff competition between oil companies, you haven’t been paying attention. If you were alive in 1973, during the “Arab oil embargo,” you should have figured it out then. If Exxon, Mobil, Texaco, et al were such competitive capitalists, why was OPEC, which is not a capitalist corporation, able to choke off most of our oil supply, in order to get the price of a barrel of oil up?
Oil is not now, nor has it been for at least a half century, a competitive capitalist enterprise. Oil prices are set globally, and individual companies have little to no say with regard to supply and demand. Not only that, but we are reaching global carrying capacity, which means we absolutely must find alternatives, and do so quickly. We can’t wait until it’s profitable to switch to alternative fuels and electricity; we have to do so now. That means government investment in our “general welfare,” as is REQUIRED in the Constitution. If we have to borrow the money to build out a power grid and research alternative fuels and battery systems, then the Constitution says “do it!”
Another seemingly obvious example is health care. Now, I have no problem whatsoever with doctors and hospitals making money providing health care to people. Why would I? That’d be silly. But insurance? I get that we need an insurance system, so that everyone can pay their bills in an emergency. But why should the insurance companies make a profit on it at all, let alone increased profits every year. You want to know what broke our health care financing system? It was the fact that insurance providers were making increased annual profits. And the only way to increase profits every year was to keep as much premium money as possible, which meant paying as few bills as possible, and to drop everyone from the rolls who might cost them more money in the future. The fact that people were dying because they couldn’t afford to pay for health care means unregulated capitalism simply doesn’t work in the health insurance game. It needs heavy regulation, as does all insurance.
Capitalism is a great system. I like it a lot, and it’s done this country well over the last century or so, since we figured out that regulating commerce actually works better than not regulating it. But it is not a perfect system, and we can’t be so wedded to it that we create systems that defy logic and reason. Our first priority has to always be the strength of our nation as a whole, and not the size of the bankrolls of a small group of people who have deluded many of us into believing that they create the jobs all of us count on for our livings.
I have no problem with the rich. I think it’s great that damn near anyone has the potential to become rich in this country. But remember three things; first, massive wealth does NOT derive just from hard work; if that was the case, firemen, police, construction workers and teachers would have the most money. There is a huge luck factor involved in getting rich. Secondly, every dollar that someone hoards is a dollar that is not circulating through the economy at large, and creating wealth for others. That means, the richer a small group of people gets, the less money is available for the rest of us. And third; no wealthy individual or corporation made their money in a vacuum; we all helped them get there; they owe it to society to return the favor. Without the workforce provided by our public schools, or the public roads, regulated railways and ports that help them move goods freely from one place to another, or the regulatory and court systems that protects their ability to make money from their goods and services, they would not be where they are. They owe us, and they should be paying to create opportunities for others, as well.
Jefferson warned us about allowing the wealthy to become too rich and too powerful because, while capitalism is a great system, it is not a perfect system. It’s time we stopped treating capitalism as a religion, and return to seeing it as an economic system that needs limits and proper perspective. It doesn’t work for everything, and sometimes it has to be guided by the government.
I don’t want to be a serf. Do you?
