Confronting Capitalism

7/19/2012—There is no alternative to capitalism currently on the table in American or the West. The countries that do not follow a basically free market practice some form of crony capitalism, like China and Venezuela. That is not really an alternative. The other international model is just some kind of protected area, usually agriculture. That usually just leads to inefficiency.

So, debates about economics tend to be about relatively minor matters—should tax rates go back to 27 or 35% for the wealthiest, for example. Or, should we have single payer health insurance?

There are people thinking about alternatives. For example, Erik Olin Wright’s book, Envisioning Real Utopias. But, even that is not as radical as it sounds. Listen to how a May 2012 program at the London School of Economics described the project—“Wright argues that we can be simultaneously utopian and practical by pursuing projects for social transformation within capitalism that point us in an emancipatory direction beyond capitalism.”

Because capitalism seems so entrenched, any debate about it is welcome. And such a debate is breaking out in the US because of Mitt Romney. The debate began with Occupy Wall Street. And that was sparked both by poor economic performance and increasing income inequality. But it was not really a debate, just a spasm.

The debate today is just a fortuity. Romney just happens to have been associated with the finance sector. He happens to be the Republican candidate for President. Obama happens to be opportunistic enough to raise any issue that might help him. Romney happens to have earned income from Bain Capital. even when he was not working there and happens to have stashed the income in a Swiss bank account and was involved in financial activities in the tax havens of Bermuda and the Cayman Islands.

Suddenly, a debate is breaking out. Yesterday, David Brooks in an column published in the Pittsburgh Post-Gazette, that the GOP must defend modern capitalism. Brooks says that Obama’s attack ads, “and the rhetoric the campaign is using around it -- challenges the entire logic of capitalism as it has existed over several decades. It's part of a comprehensive attack on the economic system that Mr. Romney personifies.” And today in the New York Times, Paul Krugman argues that such a debate would be good—“we’re hearing a lot of people—including some alleged progressives—declaring that you can’t criticize the way we’ve run our economy for the past 30 years—Why not?”

Krugman recognizes, as Brooks does not, that Obama is really just criticizing the excesses of finance capitalism, not the underlying system. But still, debate is debate.

I don’t know what will come of this. Probably nothing. But if you had suggested a few years ago that capitalism would itself become an issue, you would have sounded crazy. So this is at least progress.