For my write-up today of Stephen King’s The Stand: The Complete and Uncut Edition, I’ll be talking about capitalism, an issue that has been on my mind lately on account of the Occupy Wall Street movement. On page 632, Larry Underwood says:
“I was thinking about that watch and the death of capitalism…It used to be root, hog, or die—and the hog who rooted the hardest ended up with the red, white, and blue Cadillac and the Pulsar watch. Now, true democracy. Any lady in American can have a Pulsar digital and a blue haze mink.”
Those of you who have followed my blog for a long time may know that I’m a recovering conservative Republican. What I am now, I am still sorting that out, but there was a time when I was a firm believer in free-market capitalism. Have you ever heard the joke about Milton Friedman and the Chicago school of economics? “How many University of Chicago economists does it take to screw in a light-bulb? None. The market will take care of it!” That was essentially what I believed. If only the government got out of things, life would be better for everyone, I thought.
When I was in college, I heard the sorts of things that Larry Underwood is saying: that capitalism leads to disparity of wealth, that there are winners and losers in the capitalistic system, that capitalism leads towards monopolies, etc. But I did not agree with my liberal or centrist-left friends who were saying these sorts of things. I looked at the United States and saw a vast middle class, and I attributed that to our free-market system, in which people could pursue their dreams and profit from that. I doubted that capitalism necessarily had to lead to monopolies, for it seemed to me that monopolies were created from government support for certain businesses, plus competition struck me as the best way to improve quality and to bring down prices. In my opinion at the time, tax cuts—even for the rich—encouraged investment and growth, whereas taxes restricted the economy and impeded job creation. I even thought that the rich should get tax cuts, for they worked hard, came up with ideas that enabled companies to succeed, and created jobs.
I haven’t ditched this entire belief system, to tell you the truth. It’s just that I believe there’s another side: that there are downsides to what I viewed as positive, and upsides to what I thought were negative. Here’s an article that explains these issues in a cogent and succinct manner. At one point, America had a vast middle class. Over the past ten years, with NAFTA and other factors, wealth in America has become more and more unequally distributed. I’m not saying that disparity of wealth per se is a problem, for, as a Cato Institute guy once told me, if people in the middle and on the bottom are living fairly comfortable lives, then why should I be concerned that there is a vast disparity between the rich and everyone else? But the problem, in my opinion, is that things are not going all that well for those in the middle and on the bottom. Health care is costly. There is a decline in manufacturing jobs. There are people who work multiple jobs to make ends meet. People have had to come out of retirement to work at Wal-Mart. Unions are on the decline. Have conservative ideas of promoting competition on a global scale and of reducing the influence of unions really made things better?
And do the rich even deserve all that money? Sure, Steve Jobs and Bill Gates do, for they represent the sort of entrepreneurial spirit that Ayn Rand and other libertarian-types have praised. But what about CEOs who get millions for running the company into the ground? I’m not saying so much that the government should be arbitrating who deserves money and who does not. What I am saying is that the notion that all rich people are John Galt-like innovators creating jobs—and that the way to increase employment in the United States is to give them tax cuts—strikes me as rather hollow. This, especially since the trend in the Republican Party nowadays is to cut taxes for the rich while raising them (or not cutting them) for the middle class. Consider Herman Cain’s 9-9-9 tax plan, which eliminates a number of deductions and imposes a sales tax. Michelle Bachmann has said that the middle class should be paying some federal income taxes. In my opinion, cutting taxes for the rich does not necessarily create numerous jobs, for the rich may just sit on their money. What exactly is wrong with more money being in the hands of the middle class, which actually spends it? For that matter, what is wrong with the government helping to create jobs for people—whether those jobs be in green energy, in infrastructure, in parks, etc.—since that will put money in people’s hands?
I am a bit conflicted about competition. I think that competition can result in better goods and services at low prices, but it can also result in a race to the bottom, as competitors sacrifice quality and good treatment of their workers to bring down costs. And, as the article to which I link above argues, competition results in people being away from their families, which doesn’t exactly coincide with family values. Moreover, why should we assume that putting people’s rear-ends to the flame necessarily brings the best out of them? Perhaps pressure stifles creativity and effectiveness, in areas. Why are schools with strong teachers’ unions the ones that offer better educations? Maybe treating workers well rather than hanging a knife over their heads increases morale, and with it quality and productivity.
Conversely, monopolies are not good either, for monopolies are not accountable to consumers, and they charge their goods and services at high prices. I do think that government plays some role in perpetuating monopolies, by favoring big businesses over small businesses, for instance. But I also believe that monopolies could result from a society of unfettered capitalism, for big businesses can always undercut small businesses whenever they choose, thereby discouraging small businesses from either forming or staying in business.
I want to turn to another issue: individualism. In an online forum, a conservative was arguing that capitalism has more respect or the dignity of the individual than communism does. Oh really? I do not dispute for a second that communism was and is a horrible system, but capitalism sacrifices individuals and their dignity for the bottom line. In addition, a flaw that Karl Marx identified in capitalism was that it alienated people from their labor: people spent all day doing menial tasks and did not even make much money from doing so, and that contradicted such values as creativity and people being rewarded for their own labor.
So what do I think is the best system? Am I a socialist? I’m not for the government owning the means of production, for I believe that people have more of an incentive to work when they can reap the fruits of their own labors. I do think that the government should work to offset income inequality, and that is not out of envy that I have for the rich (which is what conservatives have said), but because I believe that society is better off when people are not so economically vulnerable, and when there is a strong middle class.
I’ll stop here. I welcome your comments, but I will not publish attacks. I also may not respond to each comment. I wrote what I wrote. Some things, I could have said better. In many cases, my reasoning perhaps could have been better. But my sentiments are my sentiments.