The problem isn’t capitalism. It’s capitalists like me

SAM HILL has a point below. He does not have much of an  answer to it but he sees that unevenly distributed economic rewards must cause envy if not anger.  And anger is a powerful motivator that can cause  attacks of various kinds on what causes the anger.  The large number of communist revolutions in the 20th century are powerful evidence of that.

The customary way of preventing too much of that anger was redistribution, invented in 19th century Britain by Disraeli and in 19th century Germany by Bismarck -- both strong and patriotic conservatives.  And all advanced societies to this day do redistribute income extensively.

But is redistribution enough?  The undoubted appeal of the borderline insane Bernie Sanders suggests not. Clearly, a lot of anger and call for change remains.

It helps to understand the Sanders upsurge if we look beyond redistribution to the other influences that have so far reinforced social stability.  And we can see that most clearly in the two large countries which have been most immune to the materialistic temptations of Communism.  Both Britain and the USA have never in their history had economically motivated revolutions or much parliamentary success for extreme-left parties.

So what makes the UK and the USA different?  Two main things: Patriotism and the church.

For a long time in Britain, all respectable people went to church on Sunday.  And the one bit of religious guidance that they undoubtedly received was the famous Ten Commandments.  And one commandment that received attention was "Thou shalt not covet".  Envying the prosperity of others was morally and religiously wrong.  The commandment specifically ruled out communism.  So that was a useful influence in Britain for a long time.

It is still a useful influence in the parts of the USA to this day, despite the general decline of Christain commitment in most of the Western world.  The fact that Christianity has suffered  a big decline is one of the reasons Sanders has so much appeal.  One of the barriers to Sanders' ideas has largely crumbled.

The second traditional barrier to civil war was patriotism.  Consciousness of being a  part of a significant and high-achieving national whole engendered warm feelings in people  that were totally at variance with any desire to rip everything up and start again.

But patriotism has been in the doldrums too.  The Left have done their best to wreck it.  It was however only lying low.  Britain and the USA do have great historic reasons for national pride so when Donald Trump and Boris Johnson reauthorized it, there was an explosion of support for it that propelled both men to power.  So that patriotic core is still strong and will continue to do in the USA and the UK what is needed to keep the destructiveness of socialism at bay.

I am a capitalist because I remember socialism.

I was converted to capitalism by a few years at the University of Chicago and a few decades working internationally and seeing socialism up close and personal. Until recently, I was confident that we need not worry about trying that experiment again because socialism had been tested and had failed. It looks like I was wrong. Socialism is on the rise. Don’t blame Bernie and Elizabeth. Blame ourselves. Here’s why.

The version of capitalism we have implemented is a flawed one. Capitalism is based on the idea that enlightened self-interest and free markets produce the best possible allocation of resources and opportunities. When socialist economies began to fail in the late ‘70s, capitalists figured that if less socialist regulation was good, none at all would be even better. We’ve been working toward that end ever since. According to the Financial Times, 2018 had the lowest enforcement of antitrust regulation in almost a half-century. Even Adam Smith argued that capitalism needs rules. Without them, capitalism quickly dissolves into cronyism and eventually Russian-style kleptocracy.

We also rigged the system.

Capitalism is a $30 trillion game of Monopoly, with few winners and many losers. That’s okay. That’s the nature of the game. But we’ve fixed it to make sure the same people win all the time. We’ve created a twotier educational system that stymies upward mobility. We have taxation that lets capitalists pay too little for the public resources that led to their success. We’ve put in laws that protect industries and shield corporations from true competition. And we have played off one disadvantaged group against another. What we have now is a game where some players get extra rolls of the die and their own stack of Get Out of Jail Free cards.

We have been hypocrites about socialism. At its core, socialism is redistribution of wealth by the government. As Karl Marx put it, “to each according to his needs.” The U.S. has gotten the redistribution part down, but in our case we redistribute to each according to his voting clout—that is, we transfer wealth from urban areas to rural ones, to farmers, to older people and to industries with enormous lobbying budgets, like Big Pharma. All the while denying that’s what we’re doing. We’re increasingly being called out by have-nots who want a turn at the trough, like The Atlantic’s Derek Thompson who asks, “Boomers have socialism. Why not millennials?” If capitalists are against socialism, then we need to be against it all the time. If we are not really against it, then we need to stop demonizing people like Bernie Sanders and Elizabeth Warren.

We have refused to listen to criticism, especially around income inequality. Technically, everyone in America (and most people in the world) are much better off since the ascendancy of capitalism. But they don’t feel better off. It’s biology. Let’s say tomorrow morning I drive across the street to Randy’s house and drop off a million dollars and then head down to George’s and drop off 10 million. You’d think Randy would be pretty happy. But I doubt it. Instead, he’ll come over and ask why George got more. According to the journal Science, the brain is more responsive to relative wealth than absolute wealth. Rather than trying to understand why people are frustrated, we have, for the most part, dismissed complaints about the wealth gap as sour grapes, or in the case of congresswoman Alexandria Ocasio-Cortez, as childish naivete.

And throughout it all, we have been less than gracious. Instead of being modest about our good fortune, we have often been boastful and accused the less fortunate of bringing it on themselves through sloth, profligacy or being unwilling to take risks.

Principled, fair capitalism remains the best and fairest system for everyone. It is far superior to socialism, “democratic” or otherwise, particularly for the poor and disadvantaged. Socialism would reduce inequality in America not by lifting the poorest up, but by forcing everyone toward a miserable mediocrity. (Although probably not billionaires. They’d move to Monte Carlo.) However, principled, fair capitalism isn’t really on the menu. We have created a type of capitalism and a class of capitalists that are very hard to like. If we want to know why socialism is making a comeback, we need only look in the mirror.


1 comment:

  1. The problem is not capitalism, the problem is those who do not know any better and those who do not wish to know any better. Capitalism is not worse than nor equal to any other systems, it is superior to other known systems. Individuals will thrive in the superior system, but how about envious herdists? Do they need faux equality to thrive?


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