Capitalism’s incarnations
11/10/09 | 16 comments
John Buell

Capitalism’s incarnations


By John Buell

Is capitalism evil? Is it bound to pass from the scene? I thought such questions were forever relegated to occasional seminars in a few cloistered left academies. Now, compliments of Michael Moore and the Great Recession, such questions are part of our national discourse. Yet, as even many on the left would caution, shorting capitalism is a dangerous strategy that has burned many over the last two centuries.

Perhaps a more fruitful line of inquiry is the form in which it will survive. The capitalism of the robber barons differed in many ways from that of Andrew Jackson’s era. Mid-1950s capitalism is distinctive from today’s insider capitalism.

U.S. capitalism in its 2009 incarnation is neither just nor efficient. One need only look at a number of widely accepted measures of economic health. While nearly one of six American workers is unemployed or underemployed, almost a third of our productive facilities stand idle. While homelessness continues to grow, nearly one in seven rental properties stands vacant and foreclosure rates rise.

Put aside Economics 101 and ask a simple question. Isn’t there something wrong with an economy that fails to steer unemployed workers into the unused plants? And if some policy achieved this purpose, wouldn’t more workers earn enough to rent those vacant homes and apartments?

Americans often pride themselves on looking at facts on the ground. I find it hard to deny that as an economy we have already produced enough homes and factories that everyone could live comfortably.

Conservatives argue that government programs that pay the unemployed to work in those vacant factories would be “inefficient” or would burden our grandchildren with huge obligations. Yet what could be more inefficient than allowing nearly a sixth of our workers and a third of our factories to sit idle? And as for future generations, their ability to pay debts will depend on the strength of the underlying economy, which is being eroded day by day.

After the Great Depression, Europe and the U.S. crafted policies that corrected the crude market imbalances that allowed humans and their tools to sit idly. Athens University economist Euclid Tsakalotos points out that Keynesianism in the postwar model was also more than a tool to deal with recession and aggregate demand. “It represented a broad, and relatively coherent, patchwork of political, social, and economic elements. It included social norms about the level of acceptable inequality (the level of wages at both ends of the income distribution, care for those unable to work).

The compromises of post-World War II capitalism broke down in the ’70s. The years since this breakdown have not been kind, either in long- term growth or economic justice. GNP and productivity increases both in the

U.S. and in a liberalizing Europe slowed even as inequality grew. (By the same token, the refusal of several European states to follow as fully the U.S. deregulatory labor market model has eased their decline.)

Our experience over the last 50 years suggests that capitalism works best when the dynamism of markets is harnessed to and limited by social and moral concerns. That experience, however, raises two other concerns that the left must take seriously.

Even the most harmonious system (social democracy, socialism, farmers market capitalism) may hide old wrongs or even encourage new evils. Just as capitalism changes in shape, the social norms in which it is embedded can themselves become agents of oppression if not subject to sensitive scrutiny. Post-World War II capitalism was sustained by lonely and uncompensated women’s work, by African-Americans in ill-compensated work and by endless exploitation of natural and human capital.

Corporate capitalism can grow and adapt. Social and economic relations within individual firms acting in a market environment need not be confined to the strict hierarchies prevalent today. Not only Europe but also the U.S. provide instances of worker-controlled enterprise in which a one-person, one-vote principle prevails, corporate assets are jointly owned, and workers determine wage structures and product priorities.

Contrary to the business press, such firms have impressive track records. In Europe, workers have directly occupied some of the factories being closed amid the recession. Some have seen the social insanity of idle minds and plants and have acted directly where politicians even on the left have stood by.

John Buell is a political economist who lives in Southwest Harbor. Readers may reach him at jbuell@acadia.net.

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Comments
16 comments on this item
On 11/9/09 at 10:03 PM, ElectraGlide wrote: Click here to view hidden comment         Repeated separate thumbs down will cause comment to be hidden
On 11/9/09 at 11:08 PM, dirigodad wrote:         Repeated separate thumbs down will cause comment to be hidden

Why is it that capitalism gets the blame, when over-taxation, over-regulation and entitlement programs for just about everybody have done all possible to destroy capitalism? It's not perfect, but it sure beats the alternatives!!

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On 11/10/09 at 5:15 AM, Mainecommenter wrote:         Repeated separate thumbs down will cause comment to be hidden

A bad case of selective economic history in which blind leftist ideology trumps facts and reason. I needn't remind anyone of the strong economic gains made worldwide since the 70's.

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On 11/10/09 at 9:32 AM, vichet wrote:         Repeated separate thumbs down will cause comment to be hidden

dirigodad is correct on this one. I have only one thing to add. Generally along with the philosophies that Mr Buell would seem to endorse comes a reduction of individual freedoms and liberties.

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On 11/10/09 at 10:49 AM, Mainecommenter wrote:         Repeated separate thumbs down will cause comment to be hidden

vichet said: "Generally along with the philosophies that Mr Buell would seem to endorse comes a reduction of individual freedoms and liberties."

Very true, vichet. The extreme right and the loony left have more in common than they'd care to admit.

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On 11/10/09 at 4:31 PM, fmrmti wrote:         Repeated separate thumbs down will cause comment to be hidden

REALLY close to being a Communism Apologist...falls just short.

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On 11/11/09 at 10:24 AM, muguet wrote:         Repeated separate thumbs down will cause comment to be hidden

The Boston Tea Party of 1773 had much to do with the economic tyranny of the British East India Company. The founding fathers subsequently saw fit to severly restrict the power of such "artificial entities", granting them limited charters and dismantaling them for acting against the public good. Adam Smith, for his devotion to the free market, nonetheless argues fervently against large corporations for their hindrance to fair competition and small entrepreneurship. Unfettered corporate power is an anathema to freedom, and is as appropriately questioned, even railed against as the abuse of government power. For my own questioning of corporate power in society, I've met with the same dismissive utterances as Mr. Buell, by the same people who march behind the corporate consumers of our public wealth.

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On 11/14/09 at 4:46 PM, JWBooth wrote:         Repeated separate thumbs down will cause comment to be hidden

Buell has been in a deep funk since the Soviet Union fell in 1989.

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On 11/14/09 at 7:37 PM, mallory wrote:         Repeated separate thumbs down will cause comment to be hidden

John Buell is a tool.

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On 11/14/09 at 7:40 PM, mallory wrote:         Repeated separate thumbs down will cause comment to be hidden

Let me just say that I am not a rich man/woman. And I have worked all my life since the age of 18. I do not understand why the socialists think I am willing to give up a large portion of my income to support the lazy @&*%&#s who live down the road? That is the essence of socialism to me. If someone can tell me why I'm wrong, I'm all ears.

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On 11/16/09 at 9:00 AM, muguet wrote:         Repeated separate thumbs down will cause comment to be hidden

Mr. Buell advocates putting idle labor to WORK -- he says nothing about paying lazy people for doing nothing, and this stereotypical welfare-recipient is less common than one might imagine. A large portion of "welfare" is paid to people who work, full time, very hard and in vital, thankless jobs. For all of their growing productivity (as measured by economists of all political persuasions), their wages remain flat -- all that productivity goes to the capital side, while the taxpayer subsidizes inadequate wages. By far, however, the largest burden on us hardworking taxpayers is corporate welfare 3+ times heavier, in fact, than poor and disabled individuals, and those ridiculous, and might I add, "socialist" bailouts. It is far from "socialist" to demand that corporations as well as individuals pull their own weight in this country. Founding Fathers as well as early free-market thinkers recognized that it is not the regulation of these "artificial entities" that is an anathema to freedom, but the failure to do so. Corporations are no more "persons" than your car -- we are correct to grab the wheel!

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On 11/19/09 at 12:37 PM, concernsme wrote:         Repeated separate thumbs down will cause comment to be hidden

I would say that capitalism has given way to a new system-corporatism. Political clout has much more to do with our economy and its engine than free market.

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On 11/20/09 at 11:03 AM, muguet wrote:         Repeated separate thumbs down will cause comment to be hidden

Well put, concernsme. You are absolutely right.

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On 11/21/09 at 4:14 PM, MiloCrabtree wrote:         Repeated separate thumbs down will cause comment to be hidden

Nice smooch on concernsme's jet fighter, muguet - you must be over the moon to find a fellow effete socialist. I would say that capitalism has given way to the mindless collective. Railing against the bourgoisie is like reading the dialectic of materialism. As usual, your mindless rant against the corporation betrays your Marxist doctrine. The collective is no more a "person" than your car--we are correct to maintain our free market hold on the wheel. Corporations are the bees knees, man, and Buell is a vacuous talking head.

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On 11/21/09 at 9:19 PM, mallory wrote:         Repeated separate thumbs down will cause comment to be hidden

Dear muguet,

Sorry, but when you say that the lazy welfare recipient is"less common than one might imagine", you lost me. I've lived in this state for 45 years. Don't piss on my boots and tell me it's raining fella. They're everywhere.

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On 11/22/09 at 4:16 PM, anne_of_mdi wrote:         Repeated separate thumbs down will cause comment to be hidden

4:14 pm, Milo you sound like an immature idiot, all the time acting as if corporations are never at fault. Everyone knows you're a mindless shill for Exxon, and probably an underpaid patsy as well.

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