Capitalism? Or Corporatism?

Inequality has become the topic du jour–and as with so many other topics Americans debate, what anyone means by “unequal” and if and why inequality matters depends on one’s perspective.

In a capitalist system, some people will do better than others. There is nothing wrong with that; the promise of a bigger reward for building a better mousetrap spurs innovation and benefits us all. It’s only when the disparity in rewards becomes disproportionate and  especially when those rewards become disconnected from actual economic productivity that things get seriously out of whack.

When what people make is a reflection of their connections and/or the success of their lobbyists, it’s time to consider whether we still have a capitalist system, or whether what America  currently has is corporatism–a system where power is exercised through large organizations in pursuit of their own economic agendas, to the detriment of the common good.

Capitalism creates opportunity; corporatism keeps it “all in the family,” exacerbating inequality. Consider the following statistics and draw your own conclusions:

Between 1947 and 1972, the average hourly wage, adjusted for inflation, rose 76%. Since 1972, it has risen 4%.

In 2011, the poverty rate for female-headed families with children was 40.9%

In 2009, CEOs of major corporations were paid a wage that was 269 times the average compensation of American workers.

Between 1979 and 2007, wages for the top 1% rose ten times as fast as those for the bottom 90%–156.2% versus 16.7%.

There’s much more, but you get the picture.

The question is, how do we return to a system where the market actually decides the winners and losers, rather than the oligarchs?


  1. I just read an extreme example of corporatism on Facebook; Detroit water company is shutting off water supply to many residents and businesses to prevent going deeper into debt. The people effected have applied to the UN for assistance on this matter. Face it, our “public” utilities are corporations and their primary objective is making money – NOT serving the public. Citizens Energy Group was announced as a benefit to residents and businesses alike; it is becoming more and more beneficial to Citizens Energy Group. As always – FOLLOW THE MONEY! Try to imagine your home – or your business – without a water supply. Does this situation in Detroit include fire hydrants in the areas effected by the shutoff? Don’t think Indianapolis or Indiana is immune to such action; how long have we been receiving notices with applications for utility insurance coverage telling us we are responsible for replacement/repair of their outside lines leading to our homes? Corporatism is rampant; it is also buying up politicians to eventually own and run this country…more than it is currently doing. Our only weapon is our VOTE, which the GOP thanks to Citizens United, is endangered due to big business, big money and out of control greed reaching epidemic proportions.

  2. I think the current state of the economy and our political system are tied closely together and as I watch the political theatre that is the daily news, I am convinced that there are no ethical politicians, no ethical businessmen, and no accountability for anyone with money and connections. This is not the USA that the founding fathers envisioned.

  3. American has become the Untied States. Government of business, by business and for business…

  4. I recall from my College Level Economics class back in 1970’s our Econ Professor explaining the various manifestations of Capitalism – Pure Competition, Oligopolies and Monopolies. Pure Competition was best exemplified by the millions of individual farmers. No one farmer could influence the price of rice so to speak. What emerged was control of the price paid to the farmers by Big-Ag, that is the Grain Elevators owned by Big – Ag as they bought up this sector.

    The Oligopolies were best represented by Big Steel, the Big Three Auto Makers, and the infamous 7 Sisters of Oil Industry.

    Monopolies were best represented by the Utilities. The exchange for the Utility Monopoly was a Regulatory Commission. Does the Utility Regulatory Commission here in Indiana have the backs of We the People or the Corporate itinerary???

    Today, we have Corporatism, Crony-Capitalism and Corporate Welfare. Perhaps a good example of granting a monopoly was when Cable arrived. Companies were given exclusive territories but little to no checks and balances on what they charge. When is the last time your cable bill went down?

    Unfortunately, for the We the People, our Elected and Appointed Politicians see their Agenda aligned with Corporate Profit Interests, via the pipeline of Campaign Contributions, and Lobbyists. The only real counter balance for the average Joe or Jane , the Unions for all their faults have been destroyed.

    The danger not only to We the People is the rigged system here at home, it is also the expression of our system in our foreign policy. Marine Corp General Smedley Butler sounded the alarm back in the 1930’s . He correctly linked America’s Corporate Interests overseas with our Military being used to protect the Corporate Interests throughout the World.

    I can think of two Elected people who see through the system of Corporatism and Crony Capitalism and are not afraid to say something about it. They are Senator Bernie Sanders and Senator Elizabeth Warren. I would vote for either of these two for President and commit my time and resources to them.

  5. I may have posted this before. A TED talk on statistical evaluation of the effects of wealth inequity.

    Worth watching. There is nothing hypothetical about the effects on society from that of which Sheila writes. They are measurable. They are corrosive. This is as much an existential threat as global warming.

  6. Now that we have arrived at this terrible state, what on earth do we DO about it?
    A more sensible tax policy would / could be helpful but how will that happen?

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