I have been called many things over the years, so if you think calling me a capitalist is an insult, you’re barking up the wrong tree. I am a capitalist and I will be one until someone comes up with a system that does more for people. Winston Churchill once called democracy the worst system available, except for all the others, and the same could be said of capitalism. Under capitalism, when you perform a service or manufacture a product that someone needs or wants, you receive compensation that should bear some relation to the value of that product or service to the individual or group who purchased it. That is a good system, although there are problems.
In addition to capitalism, I also like Ben & Jerry’s ice cream. And as is the case with capitalism, there’s a limit. Just as it is wise to moderate my intake of ice cream, it is also essential to moderate capitalism through regulation. Moderation and proper perspective are essential with anything. There is a dark side to capitalism, which means regulation is necessary in order for the capitalist economic system to work. For capitalism to work, there must be a pool of available labor. That means some folks will always be left out of the system. Since we know this, there should be a safety net in place to provide coverage for people who aren’t employed. Also, capitalism brings out greed, so there should be enough regulation to keep everyone honest. If we learned nothing else from the mortgage meltdown, we can now prove that capitalists and corporations won’t act in the best interests of anyone but themselves. Some harbor a fantasy in which capitalists regulate themselves because they must do so to keep money flowing, but that one is truly mind-boggling. We have examples of unregulated capitalism in world history, of course. Think “feudalism,” for example. Under Republican rule, we are closer to becoming serfs than at any time in history.
Woud you like to be a serf for the Lords Koch, the Lords Walton or the Lords of 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, without regulations in place, how much do you think they’ll give us in return for our service to them? They already balk at the prospect of a minimum wage of $9 per hour, and they continue to attempt to take away your health insurance. 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? This is what the current Republican Party wants to do to us.
The Founders of this country were among the most successful capitalists in the world at the time; most were incredibly wealthy. Yet despite that, they incorporated the regulation of capitalism into the Constitution. It’s in Article I, 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;
I can hear Republican heads exploding all over. 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 (those Republicans who took an oath to support and defend the Constitution and proceeded to voted against raising the debt ceiling, pay attention); it’s required to provide for the “general welfare” (that means act in the best interests of all, not just their crazy “base.”); it’s required to borrow money as we need it, and it’s required to regulate commerce, unless that commerce is completely self-contained in one state. Except for real estate, good luck with finding something that doesn’t qualify as “interstate commerce” these days, when a person in Maryland can drive to Oregon to shop at the best wedding cake bakery in the country to supply their same-sex wedding. (By the way, Republicans, you might note that it’s also required that the government collect taxes to pay for whatever we decide will promote the “general welfare” of our country.
Now, why would those smart Founding Fathers require the federal government to regulate commerce, if regulation was such a nasty prospect, according to today’s GOP? 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 left unregulated. Though rank and file Republicans don’t seem to understand this, the original Tea Party” wasn’t about taxation as a concept; it was about the British government giving certain favored corporations too much power, and not allowing colonists to have a say in how things were done over here. In other words, the current Tea Party should be against the Republican Party, not helping it. The Founders wanted a free market that was friendly and fair to everyone. They wanted a government that looked out for everyone’s interests.
Feudalism is the ultimate in unregulated capitalism; it is what capitalism leads to in its natural state. Regulation is necessary to maximize opportunity for everyone. 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 can be just as dangerous as no regulation. But the solution to such a situation is not to remove all regulation from the equation.
We must 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 doesn’t make everything better automatically. Whether or not we do something for the common good should not be based on whether or not it’s profitable. Likewise, when something transitions from simply being 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 apprach to electricity generation. Put simply, our power generation system is completely screwy, when compared to just about every industrialized nation. Though electricity is an absolute necessity now, we have allowed pure capitalism to drive it, especially in the last 40 years or so, and the result has been disastrous, with even more potential disaster awaiting us. Our power system has been cobbled together from hundreds of smaller power systems, 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. 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, most of which were meticulously planned , with redundancies built in that prevent massive blackouts. In most of those countries, private companies run the plants and private contractors service the grid, but it’s all based on comprehensive government plans, designed to maximize efficiency and benefit for the country. Our worship of capitalism over everything has left us with millions of miles of wires, with little regard for compatibility between systems. Thatt makes us vulnerable to problems.
We also have to realize that the natural state of capitalism eventually 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 you still operate under the delusion that oil is still a capitalist enterprise, 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 ExxonMobil, Shell, BP and Texaco were such competitive capitalists, why was OPEC able to choke off most of our oil supply and jack up the price of a barrel of oil? It’s been a half century since petroleum was competitive; oil prices are set globally, and individual companies have little to no say regarding 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 it 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!”
Likewise, capitalism has no place in health insurance. There is no problem whatsoever with doctors and hospitals making money providing health care to people, but why should insurance companies make a profit for simply paying our bills for us? What broke our health care financing system was insurance profits. And people were dying because they were denied insurance and couldn’t afford to pay for health care; that is a prime example how unregulated capitalism can’t work in the health insurance game. It needs heavy regulation, as does all insurance.
I have no problem with the rich. I want to live in a country where anyone can become rich, but that has become less likely in recent years. Our current capitalism precludes a lot of people from partaking in the largesse of the system, because deregulation has created an unfair advantage to those with money.
But there’s something else. Our economy can’t run 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. The rich 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. We should heed that advice. 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?
Also published on Medium.