We Americans tend to be “either/or” people. A policy is right or wrong; a system is good or bad, “those people” are all sterling characters or (more frequently) worthless bums.
Things aren’t going well, and need to change? We throw the baby out with the bathwater.
Speaking of throwing, the election of Donald Trump has thrown a number of the problems with American governance into stark relief; it’s hard to deny the influence of money, or the venality of certain lawmakers. But rather than resolutions to correct the laws and political processes that have led to the current mess, I am increasingly reading diatribes from people who have decided that it is all capitalism’s fault, and want to replace the country’s system of market economics with socialism.
As the kids might say, let’s get real.
First of all, the worst aspects of our current, deeply dysfunctional economy aren’t capitalism. A genuinely capitalist system is regulated by an impartial “umpire” (the government) to ensure that enterprises compete on that all-important level playing field. What we have today is corporatism: Corporatism has been described as what you have when you lose the laws and regulations that have kept businesses from being able to buy politicians– a system where government is effectively “owned” by special interests.
Market capitalism encourages transactions between willing buyers and sellers, both of whom are in possession of all information relevant to those transactions. Socialism is a system for the collective provision of goods and services that don’t meet that criterion–goods and services that the market cannot supply efficiently or fairly. We “socialize” things like infrastructure, police and fire protection, and protection of clean air and water.
A healthy, growing economy requires both. Virtually all western industrialized countries have mixed economies, meaning that the government socializes certain areas of the economy and leaves other areas to the market. The challenge is to get the mix right.
Both capitalism and socialism can be manipulated by greedy or unethical offiicials–that’s why electing people who demonstrate respect for ethics and the rule of law is so critical. Unregulated capitalism becomes corporatism, allowing the “big guys” to prey on smaller businesses and consumers. Socializing too much of the economy depresses innovation, invites stagnation and encourages petty bureaucrats to abuse their authority.
If we want to fix our broken economic system–and not so incidentally, our broken government–there is no substitute for doing the hard work of re-regulating markets in those sectors where markets work well, and carefully socializing areas (like health care) where the evidence overwhelmingly demonstrates that markets do not and cannot work.
We can and should argue about the level of regulation we impose on market enterprises–what is too much, what is not enough?–and we can and should require hard evidence before moving to socialize additional areas of the economy. What we shouldn’t do is apply bumper-sticker solutions to problems requiring careful analysis and measured policymaking.
We don’t need to throw the baby out–just the dirty bathwater.