The One-sided See-Saw…

An Apology For Capitalism

A holding company is the people you give your money to while you’re being searched.
— Will Rogers

Everybody talks about capitalism but nobody has done anything about it, recently. Except maybe for Richard D. Wolff, in a long interview with David Barsamian, resulting in a book called “Occupy The Economy: Challenging Capitalism.” That may make sense because in the last couple of years we’ve occupied just about everything else.

A strange thing happened on the way out of the Great Depression. Franklin Roosevelt actually saved capitalism by trashing it. Well, not entirely. Roosevelt enacted legislation to hobble the destructive tendency of capitalism’s excesses, while at the same time creating “entitlements” (as they say these days), and forcing the top 1% to pick up the tab through personal and corporate taxes.

Quite a trick, but it would never work today, because today capitalists don’t scare that easily. FDR told the rich (in 1932 you were rich if you had anything left on payday) if you don’t pony up, the Unions and socialists and communists will get you. And don’t forget, they were listening to Woody Guthrie at the time, not sophisticated rap artists.

It worked. Of course, there wasn’t a Mitch McConnell in the Senate in those days. Roosevelt also took job-creating government action because the free market wasn’t doing it. And of course there wasn’t a John Boehner in Congress in those days.

That’s peanuts, compared with what we should do now, says Wolff, since there’s a real wolf at our door. The real wolf is the capitalistic coyotes who have spent 30 years maximizing profits over workers’ dead bodies – resisting regulation, lowering taxes on themselves, off-shoring, union-busting, and just generally muddling the middle class.

What we need is more control by more people, something like what we used to call in college “more beer, less clothes.” We’ve had enough of a few guys in every corporation bossing all the rest as to what is produced, how and where, trashing unions, the environment and even their own companies, which they’re leaving anyway in golden parachutes.

The way to do that is to give every worker a say in – hey, wait a minute, that’s like communism, right? Apparently. Like everybody works four days and on the fifth, say Friday, they all have a meeting and decide what to do next.

That sounds pretty unAmerican, but Wolff is serious. He wants capitalism to become like democracv.

I like the way Bill Maher describes it. Capitalism, that is. He says it’s like 100 guys are in a big room and they order in 100 pieces of pizza. Vegetarian, whatever. Then one guy takes 90 pieces and leaves 10 for the other 99 guys. So somebody says:

“Hey, you wouldn’t mind taking 89, would you, so the rest of us could have 1/9th each?” And the first guy – who is a capitalist – says: “But that would be socialism.”

Well, things might be pretty bad with American capitalism, but it’s sure better than what they have in China, which is State Capitalism. In state capitalism, all the revenue flows to the state, which means the Politburo, either eight guys or six, I think they take turns whether or not it’s an off-election year. 300 or so million people, the middle class, average about 20 grand a year; the other one billion are out in the boondocks so they only need less than a thousand bucks a year to live, and the eight guys in the Politburo get the rest. One eighth of 1,300,000,000 is a lot worse (or better) than 1%, it seems to me. And it’s definitely better than Maher’s split on the pizza. That’s why most other governments and economists are so enthusiastic about China’s Gross Domestic Product, not to mention their gross domestic politicians.

Other American writers have pointed out the advantages of capitalism that are not generally understood. For instance, capitalism not only trickles down sooner or later on the people underneath (and stimulates demands for umbrellas, awnings and insurance coverage), but one historian named Diedre McCloskey explains that the industrial revolution can be traced directly to an improvement in how society values entrepreneurs. For example, the first industrial revolution taught children who were forced to work in the coal mines at the age of nine early entrepreneurial skills more quickly than those in backward nations.

Another economic essayist named David Boaz traces the notion that capitalism is a dog-eat-dog culture. In present day China, he points out, the culture is more like people-eat-dog, whereas during the centuries when China was a feudal society, it was often a case of dog-eat-people. This sub-cultural innovation has also enhanced China’s burgeoning dog food export industry.

Finally, a third economist has noted from empirical evidence that in a comparative study of not-for-profit hospitals versus free enterprise hospitals, as advocated by Paul Ryan, the for-profit institutions outperformed the others in every way, particularly in areas such as hip-replacement surgery, which took place three times as often where there was a deliberate profit motive.

It’s almost unanimous among economists, at least those on commission, that self-interest is a vital factor in the success of capitalism in channeling people’s self-interest into social benefits. A Chinese economist, Mao Yushi, points out that the “paradox of morality” is such that everybody works harder and better when he/she is pieced out. I had suspected as much but never found the courage to say so.

Capitalism hasn’t always been that great. In 1921, R.H. Tawney, the English philosopher, wrote a book called “The Acquisitive Society.” He was so acquisitive over the success of the book that the following year he produced an even longer text entitled “Religion and The Rise Of Capitalism.” His principal thesis is that in the distant past, economic activity had been merely a single aspect of human experience which operated within a system regulated by a moral consensus.

With the decline of the Church and the corresponding advance of capitalism, there was generated a market that was magnified into a society where all aspects of life are ruled by economic considerations. Some times, and I know this for a fact, those economic concerns even “magnified” in the church itself, such as in the ballooning of the assets of the Vatican Bank in the last century or so, once they learned some of the more sophisticated disciplines hitherto known only to the Fuggers, the Rothschilds, the Goldmans, the Sachses and the Lucianos.

This materialism results in an atomized society in which social duties are subsumed by individual rights; where human beings are reduced from the ends of ethical consideration to mere tools of accumulation; where private property is sanctified to ensure that it is preserved to benefit a narrow section of the population, and society is scarred by class resentment and division.

I don’t know about you, but I’ll take that old-time religion very time.

I leave it to economist Joseph Shumpeter to decide whether capitalism will survive. In his book “Capitalism, Socialism and Democracy,” he sort of says he doubts it, but then again, it just might.

The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organisation, that capitalist enterprise creates… In dealing with capitalism, we are dealing with an evolutionary process…

Without individual innovation and enterprise, profit will vanish or become unimportant. The profit-making which communism would suppress is not dependent on innovations or on monopolies. It arises, with all its anomalies and abuses, from the mechanism of competition and is the remuneration of selling power. In proportion as the profit-makers become fewer, they become more open to attack by the multitude.

And right now, although our capitalistic society taught me never to end with a preposition, that’s about where we’re at.

Bill Annett writes four newsletters: The Canadian Shield, American Logo, Beating the Street, and The Oyster World. He can be reached at: Read other articles by Bill.