Capitalism is not a Religion

“Liberty means responsibility. That is why most men dread it.” – George Bernard Shaw

GOP VisionOne of the more childish and irritating concepts propagated by the current incarnation of the Republican Party is the notion that all regulations are so restrictive and confining that they inhibit freedom. This is demonstrably false, of course; most regulations actually enhance the freedom of businesses to do what they want. For example, rules against predatory commercial activity, if enforced, will keep a huge company – say, Walmart – from charging prices designed to put everyone else out of business. Keeping the prospect of doing business open to everyone is a good thing, is it not? Having a big box store displace 20 other small businesses actually strangles commerce; it doesn’t enhance it.

Like everything in life, regulations should occur  in moderation, and there have been times governments have gone overboard with regulations, but used properly, they keep people honest and create a level playing field in the markets. When that happens, capitalism can breed strong innovation and create markets for products and services to make life better. The United States became an economic superpower because we learned to use the capitalist economic system to its greatest effect, and the world economy is growing and expanding largely by following our lead.

Unfortunately, what other countries learned from us, we seem to have forgotten during the Republican neocon era. Contrary to the modern Republican attitude, capitalism is not a religion, in which “the market” serves as its godhead. Republicans believe that players in a market will always accede to the wishes of their customers because that’s how they make money. Spare me that tripe.

In reality, while it is likely that MOST food producers won’t allow tainted food into the marketplace because it’s bad for business, there will always will be a subset of producers who don’t care about anything except making money and others will have to compete with them. What if a pork producer decides to push some tainted beef into the market, to make people buy more pork? He’s a pork producer; why would he care about beef producer, right?

Regulations create a basic foundation that keeps markets fair for all players. Regulation doesn’t cause an unfair burden in most instances, it usually prevents an unfair burden. Properly regulated markets afford protection to all players, large and small. The basic reality is, too much deregulation could actually result in a collapse of capitalism.

God of MoneyThe mortgage meltdown, which led to the Great Recession, was not caused by “too much regulation,” it was the exact opposite. Republicans created a financial market that was allowed to operate without government oversight. People were allowed to use our money  to invest in securities that had no specific value, but as long as they were bought and sold at a profit, everyone was happy .  Unfortunately, someone eventually figured out the emperor had no clothes, and that these securities had no actual value and the entire market collapsed. And since there was no regulatory structure in place to address the collapse, it took everyone else down with it. The reason your 401(k) dropped like a rock in 2008 is because crooks were allowed to operate entirely at will. The sickest thing is, almost everything they did was legal at the time. The reason “banksters” aren’t in jail right now is because most of what they did, though economically disastrous, was actually not illegal at the time they did it.

And Republicans want to do that again. They advocate for unregulated capitalism, even though it’s essentially a breeding ground for criminals. You can’t find one regulatory structure that was ever created by Republicans, because they don’t want to keep anyone in line. Well, except 99% of the citizenry.

This nation’s Founders understood the need for comprehensive regulation when they included the Commerce Clause in the Constitution. The Commerce Clause doesn’t just politely request that the federal government consider a few regulations, it actually mandates such regulation. The government has no choice in the matter; it must regulate commerce “among the states,” and there is almost no commerce that isn’t either interstate or international these days. If someone can possibly drive to your business, come in and buy something, you’re essentially engaging in interstate commerce.

Without significant regulation, capitalism is harsh and cruel, and allows large players with lots of money to lock everyone else out of whatever market they’ve chosen to dominate. Without proper regulation, companies can put everyone else out of business, until there is one dominant company controlling every product in the economy, and freezing everyone out of the marketplace. Imagine, if you will, that Standard Oil had been left alone back in the late 19th Century. It’s entirely possible that every product you own could have the Standard brand on it, because they likely wouldn’t have stopped with the oil business. They would control pricing on everything, and all private employment would be under their purview.  Needless to say, regulation is important in any capitalist system, to make things fair for consumers and other potential capitalists.

God and MoneyEven with regulation, capitalism has a downside. Some markets, such as the employment market, need a pool of available workers to keep inflation under control. That is why it is so vitally important that we have a strong safety net in place, to take care of those who are necessarily left out of the system for any length of time.  Almost every other industrialized nation has a strong safety net for those families who can’t or don’t work at any given point in time, yet Americans who find themselves unemployed through no fault of their own usually face losing everything if they can’t find employment right away.

Why is that acceptable? Why is the wealthiest nation in the world allowing such a thing to happen? It’s because the current Republican Party doesn’t care about anyone but rich investors. They’re perfectly happy with turning the entire economy over to Walmart and ExxonMobil and letting the Chinese manufacture everything, and they’re okay with allowing robber barons create an economic subsystem that makes them trillions of dollars in the short run, but costs everyone else trillions more in the long run. They claim to be enamored with the idea of competition, but the only way to strengthen competition is to regulate commerce.

We also have to recognize that some markets do not work within a capitalist framework, which is something Republicans, in their religious fervor, won’t accept. Take energy; nearly every other industrialized nation has a plan for electrical generation in which private companies run generation plants, but the transmission is (and should be) owned and maintained as a heavily-regulated public trust. One reason our electrical grid is a complete mess is because we treat the entire system as a capitalist enterprise, with little or no planning between jurisdictions or markets. Except for regulations requiring each utility to attach itself to an ad hoc “grid,” each system is built on widely divergent standards.

We should have developed a grid plan a while ago and demanded that utilities across the country adhere to one standard with a national focus, but in their “deregulation” zeal, Republicans would have none of that. Now, we have a system that is a blackout or two away from complete disaster. Do you realize, for example, that the state of Texas has its own electrical grid, unconnected to the rest of the country? That is just absurd, and could someday lead to major problems. Not only can we not depend on Texas to provide us with power when necessary, if Texas loses power, we can’t pick up the slack.

Closely related to that is oil. Why do we act as if the oil “market” is actually a capitalist enterprise, when it’s actually a closed market that needs heavy global regulation right now?  If the wide swings in gasoline and heating oil prices over 40 years haven’t made that apparent, what will? If the major oil companies were actually competing, where’s the one buying Venezuelan or Brazilian oil at a deep discount in order to blow its competitors out of the water? The market is rigged, and it needs to be heavily regulated and taxed with an eye toward reducing our dependence on it. I’d have no problem paying $4-5 per gallon if the money was going to build efficient public transit systems, or to pay for alternative fuels exploration. Instead, every time they raise the price, oil companies’ cash reserves get fatter and we get nothing out of it. That’s not capitalism, folks; that’s effectively taxation without representation. Isn’t that what our original revolution was about? Do we really think only the government can tax us?

Another industry that doesn’t lend itself to capitalism is insurance. No insurance company should be run as a for-profit enterprise, especially when it comes to health insurance. The nature of insurance is actually the epitome of socialism; everyone puts money into a pool, and everyone else takes what they need. You know, “from each according to his abilities, to each according to his needs.” Insurance companies only collect money from us, then cut checks and pay bills on our behalf. I understand there are administrative costs involved with insurance, but why profits? Under our old health insurance system, in which company profits must increase every year, complanies has two choices; to collect more in premiums and to pay out less in claims. See the problem?

The concept of for-profit health insurance is insidious for two reasons; healthcare is not a consumer product in most cases; we rarely get to choose when or where we buy it.  We like to point to smokers, drinkers and people who eat too much sugar and fat as huge problems, but the fact is, we can contract meningitis or pneumonia from someone we pass on the street, and incur tens of thousands of dollars in care that we can’t afford to pay. Without health insurance, catching a disease from someone who passes us on the street or getting hit by a bus can result in us losing everything we’ve worked for our entire life, and that simply shouldn’t happen. We should all have health insurance automatically, from the moment we’re born until the day we die and we should all pay for it, but while health care delivery can be a (highly regulated) capitalist enterprise, there is no way paying our medical bills with our own money should result in profit for anyone, let alone increased profits every year.

It’s time we started realizing that the most responsible capitalism is heavily regulated, and that all good capitalist systems are conducted with a realization that not all endeavors work well in a market-based environment. Our system became the strongest economic system in the world through a public-private partnership that acknowledges that reality. It’s time we returned to that model.

The Republican “capitalist” model, in which regulation limited because it’s a “restriction on freedom” belies the fact that there are always multiple parties whose freedoms must be kept in balance. Yes, businesspeople should have the freedom to engage in commerce, but that freedom also entails significant responsibility; to consumers who frequent their business, as well as to the others who also engage in commerce, including others in the same business. And we have to recognize that not everything should be subject to the capitalist system. Markets mature and change, and we often  become dependent on some products. We must understand that basic societal needs sometimes take precedence over profits.

Capitalism is not a religion, and money is not our god. Stop treating them as such.


Capitalism is not a Religion — 1 Comment

  1. Pingback: BadGOP | Capitalism is not a Religion