America’s Capitalism is Wrong
When the Founding Fathers were establishing the Constitution and new country, they were intent on free-market, meritocratic principles, where everyone got everywhere based on their ability, not their social class. Great system, worked really well, everyone lived happily ever.
To see the problem with these rigorous free-market principles, we need to look at slavery. Far from being an insignificant part of history, slavery shows us the issues with having untamed capitalism — and how this extreme capitalism breaks down.
Slavery seemed right to free-market thinkers of the late 1700s — white people should have the right to private property, black people can be considered no more than property. Thus slavery was justified through free-market principles.
But a proper assessment of what would constitute good, sustainable capitalism would have shown that slavery was not just morally repulsive, but economically suicidal.
Firstly, slavery created dependence — of the illiterate and uneducated slave on the slave master, but, more importantly (given the racist attitudes of the time), of the slave masters and whole American economy on the slaves.
This meant that any change to the system, which wouldn’t even have to be as radical as abolition to make a significant difference, could crash the economy, put millions out of a job, and leave millions requiring state assistance and being unproductive.
Secondly, slavery meant that a good portion of the population was restricted in the pursuit of wealth based on merit, creating a dysfunctional brand of capitalism.
But the lessons of slavery have not been learnt — racist attitudes and strict government non-interference doctrines have been spread in the name of the defence of capitalism, but have destroyed the very capitalism they purport to protect.
Good capitalism has to be sustainable and aim to paper over some of the cracks which complete government non-interference leaves.
That’s not what America has. The freedom to make political donations and lobby politicians is almost entirely unrestricted — to the simple capitalist, this is good, to the modern economist, less so. This leads, in turn, to politicians protecting monopolies and destroying the meritocratic society which capitalism should be about.
America’s capitalism also doesn’t work if you consider workers’ rights or the minimum wage. Even where there is state intervention in the economy, it’s done along lines deemed “acceptable” to capitalists. Take FDR’s minimum wage reform, for example. He set it at $1 per hour, and made no provisions for raising it in line with inflation to ensure its passage through Congress, leading to immeasurable issues.
In almost every country with a minimum wage, it rises each year in line with inflation and average wage growth, in order to ensure that the minimum wage keeps as many people as possible out of poverty. In the US, though, the capital and business lobby stops intervention policies from working as they should — this is, yet again, a capitalist problem.
America’s capitalism is wrong — and the only way to fix it is to accept that capitalism can’t do everything, and needs to be sustainable.