” The problem with socialism is socialism; the problem with capitalism is the capitalists.”
Peggy Noonan addresses this paradox in Republicans Need to Save Capitalism in the Wall Street Journal (Feb16-17).
The American establishment had to come to look very, very bad. Two long unwon wars destroyed the GOP’s reputation for sobriety in foreign affairs, and the 2008 crash cratered its reputation for economic probity. Both disasters gave those inclined to turn from the status quo inspiration and arguments. Culturally, 2008 was especially resonant: The government bailed out its buddies and threw no one in jail, and the capitalists failed to defend the system that made them rich. They dummied up, hunkered down and waited for it to pass.
Americans have long sort of accepted a kind of deal regarding leadership by various elites and establishments. The agreement was that if the elites more or less play by the rules, protect the integrity of the system, and care about the people, they can have their mansions. But when you begin to perceive that the great and mighty are not necessarily on your side, when they show no particular sense of responsibility to their fellow citizens, all bets are off. The compact is broken: They no longer get to have their mansions. They no longer get to be “the rich.”
For most of the 20th century the poor in America didn’t hate the rich for their mansions; they wanted a mansion and thought they could get one if things turned their way. When you think the system’s rigged, your attitude changes.
I’ll go whole hog here. We need a cleaned-up capitalism, not a weary, sighing, acceptance-of-man’s-fallen-nature capitalism.
Capitalism is best defined as the competition of ideas. Much of what we have allowed to be included under the definition of capitalism is far removed from that idea. Any word we place before the term in an attempt to clarify it only distorts it; it is only a vile attempt to hijack the term to make it what we want.
Crony capitalism is closer to fascism. Democratic capitalism empowers majorities, not innovators which by nature are a small minority. Social justice has come to have little relation to the traditional meaning of the word justice.
Our capitalists sing the praises of the free market while they collect their tax breaks, subsidies, and bail out checks.
Regulations should seek to preserve the competition of ideas. That should be the driving concern behind anti-trust legislation. Too often our regulations are so onerous that they undermine competition. Established firms ‘capture’ the advantage of the regulations to limit competition. A decade after Dodd Frank we have fewer and bigger banks, and mergers concentrating the industry even more.
Two schools of capitalism have developed. One sees capitalism as a natural organic development and regulation only serves to stifle its benefits. The other sees control of our baser instincts to be essential to capitalism. Ideally these instincts would be controlled by social institutions. The danger of excess regulation or central planning is not frustrating the natural organic order, but undermining the institutions that control our baser instincts.
We can not fix a problem unless we recognize it and clarify it. Conservatives and capitalists need spokesmen who can address the average voter, not the just the attendees at the next symposium.