Free markets are a great way to run an economy, just as free elections are a great way to run a political system and ordered liberty a great way to run a society. These three things are key to a better life, even to economic growth. They are our great hope for saving the planet.
That said, capitalism by itself sucks. As an –ism, rather than just a way of structuring the economy, capitalism has a fatal flaw.
Capitalism has yet to figure out what to do when the game ends. And the game is always ending.
Think about it. Capitalism means competition. There are winners, and there are losers. Over time there are more and more losers, fewer and fewer winners. That’s how games work. Adam Smith wrote that capitalists would be inclined toward the common good, and some are. But others are not. “Rich man want to be king, and a king ain’t satisfied until he rules everything,” as Bruce Springsteen sang in “Badlands.”
The last century has seen repeated crises, where capitalism’s few winners drew an incredibly inefficient portion of total income. The first came in 1914, the second in 1929, and the third started around 2000, Thanks to the Obama Administration we’re back to that same point again.
What happened in 1914? World War I, which decimated the ultra-wealthy, reducing their share of national income. What happened in 1929? The Great Depression, Hitler, World War II, the “great compression” that brought the wealthy’s share of national income to its lowest level by the mid-1950s.
What happens when the rich get too much money is that some decide to turn that into power over other people. They build enormous arsenals for “defense” and then use them against other arsenals.
If capitalism goes outside its economic boundaries and becomes a system of laws, a system of government, even a philosophy, it sucks. The case is proven. As a system it leads to excess, it leads to war, it’s destructive to man’s interests, and it’s a direct threat to the health of this planet, because it recognizes no interest other than private interest, placing money over all else – the common interest, democracy, and ordered liberty as well.
What is commonly derided by the Right as “democratic socialism” is, in fact, merely a continuing effort to address this crisis, and it’s something we’ve been doing since the Founding. Alexander Hamilton’s “Bank of the United States,” so derided by Jefferson, was the first shot in this argument. DeWitt Clinton’s Erie Canal, an enormous piece of government-backed infrastructure, was followed by Abraham Lincoln’s land grant colleges, Homestead Act, and Pacific Railway Act (he started out as a Whig) all designed to not just create wealth, but spread it around, to recycle it.
Populists with their “Cross of Gold,” the Progressive movement, and Will Rogers’ famed “trickle up” quote were all part of the discussion. “Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow’s hands.”
All such thoughts are derided by conservatives today as “socialism,” against which they offer “capitalism,” turning the search for individual wealth into a system of government, something it was never meant to be. Capitalism, as a system of government, turns out to not only be bad for the poor, and the middle class, but for the wealthy as well. The evidence on this is clear. Only a capitalist, an idiot, or an idiot in the pay of capitalists can argue with it.
Government – democratic government that promotes ordered liberty — is the only force that can prevent wars of choice, allowing wealth to trickle up, growing the economy so we have the capital needed to terra-form Earth, which is the 21st century’s great challenge. You may choose to call it “socialism,” but it was described nicely in the Declaration of Independence, which was written the same year as Adam Smith’s “Wealth of Nations”:
“Governments are instituted among Men, deriving their just powers from the consent of the governed,” reads the Declaration. Governments instituted among men, not God, are the protector of liberty. Government systems should not be changed for “light and transient causes,” but “when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism,” only then is it “their right” indeed “their duty, to throw off such Government, and to provide new Guards for their future security.”
Absolute control of government by capitalists, or by any other force antithetical to liberty and justice, is thus the only excuse there is for revolution. And if the Koch brothers get their way, that will inevitably follow, a violent revolution that will throw everyone’s wealth – that of the poor, the middle class, even the Kochs’ – onto the fire, and transform the United States into just another Latin despotism.
Government is not just the protector of life and liberty. It is the protector of man’s “pursuit of happiness” as well. How much government should do in this regard was debated fiercely, from the time of the Declaration. The Articles of Confederation used during the War were seen as insufficient, and were replaced 13 years later with a Constitution, written in secret, giving a central government ultimate authority, with a design of checks and balances meant to keep any one group from accumulating too much power.
As a corollary to the Constitution we like to talk about “Equal justice under law,” a phrase etched in stone above the Supreme Court building, and placed into the law mainly by Chief Justice John Marshall, a Federalist appointed by John Adams in opposition to incoming President Jefferson. It is an ideal from Greek antiquity which means that everyone is equal under it. But there’s a corollary. Anyone who claims to be above the law becomes the law. How much license they grant themselves, and how much liberty they deign for you to have, then becomes something wholly under their control.
There’s no absolute here. I’m sure you can easily tell me a half-dozen actors, corporations, or religious figures who you feel arbitrarily place themselves above the law today, who flout its designs today, who ignore it today, and who act entirely based on their own concept of license, putting others’ liberty under check. Neither democratic government nor the concept of liberty are absolutes. They’re goals, the “more perfect union” Lincoln talked about. The union can always be made more perfect. The general welfare can always be improved, government has the right to do that, and it has exercised that right ever since the Constitution was written.
Don’t let anyone call a system of ordered liberty, where everyone is equal under the law, the first essential in any flexible society, “socialism.” Call it what it is. Call it America. Working to protect it, enhance it, and improve it is the first responsibility of a citizen.
So get involved, now. Vote. Work. Run for something. It’s not only your right, it’s your duty, not only to protect your rights but to meet capitalism’s unmet challenges, and to keep it from throwing the rich on a bonfire of their own vanities.
