Posted by David Marsh
Capitalism. Socialism. Mixed Economy. Three different economic/political systems. For the masses they conjure epochal realities of various nations suffering or prospering. Capitalism for most means free enterprise, while socialism means government decides who gets and who doesn’t. How often have I heard: “There isn’t a better system than Capitalism.” “I’m proud to be a Capitalist even though I live paycheck to paycheck” Perhaps, it could even be you saying it. It used to be me.
The longer I live, the more I witness poverty, strife, bankruptcies due to medical nightmares, sudden job loss, individual bad luck, bad timing, a silly mistake, I’ve grown to realize that Capitalism only works for the richest of society who can weather the harshest of circumstances. But what’s better than Capitalism? Is there anything better? I’ll give you a hint. It’s definitely not Socialism.
I’m not an expert on political systems. I’m not one who believes government should have the power to dictate how much a person or corporation should make. But I do believe in fairness. I also believe in an old phrase: No man is an island.
Let me talk about fairness. Who pays more at a car dealership, a person with good credit or a struggling waiter with so-so credit? Who pays 29% bank card interest rates, millionaires or hard-on-their-luck Americans who sometimes use their cards for food, gas, and emergencies? Who makes money on the stock market, people who can afford to gamble, or a single mom who can barely get by with a minimum wage paycheck? As a percentage who pays more tax, the average millionaire or the average factory worker?
Only obstinance, a head in the sand would deduce a different reality: Capitalism favors the wealthy and wealthy minded. But what’s wrong with that? If you’re not wealthy, play by the rules, get into the system, and profit by it. Really?
What about the hand you are dealt? Child of a middle-class family / child of a convicted drug felon living in squalor. Rich kid who goes to a good school, poor kid who barely gets an education. Note: I’m not suggesting that poor kids cannot receive a good education anymore than I’m suggesting that rich kids get the best education.
Again, I’m not an expert on these things but I’ve lived for six decades and have seen the gulf between the haves and have nots grow exponentially. I’m certain our inequitable taxation system is part of the problem. I’m also certain that without regulatory mechanisms wealth hoarding will continue to plague our society.
“I started the business! It was my brainwave! My sacrifice!” The business owner who says this is correct. But could the business have grown without employees?
No man is an island, right — imagine a society that lived by this; Imagine a society that looked poverty in the eye and said “I cannot allow this.” Imagine a society where you couldn’t find a business with 50 or more employees that didn’t have a profit sharing plan. Imagine: a livable wage as an anachronism, welfare an instrument for the needy rather than a strain on the economy. Is this a Utopian pipe dream?
Factually, profit sharing already works well in many companies. I keep hearing the argument against livable wages but in the fifties and sixties wages were indeed livable; one working person in the family earned enough for a mortgage, food, clothes, car, and for the family to live well. How about taxes? Specifically, is it possible for to have a fair taxation system? I’m absolutely convinced that income tax prevents economic honesty. Too many individuals, corporations, partnerships, dodge, evade and avoid income tax. The main problem with income tax is the tax forms; they’re too easy to rig, especially if you have a high-priced accountant preparing the forms. The solution: do away with it. Instead adopt a very comprehensive usage tax system.
With a usage tax everything purchased, rented, invested into, would be taxed, hopefully nominally. You wouldn’t be able to avoid the tax, dodge it, right it off or defer it. You still might be able to defraud the government by selling something at a pretend lower price but overall Usage is a fair taxation system that would cause corporations, super-corporations, individuals, investors to pay a fair share. No deductions. No tax free. Perhaps waivers or rebates for the needy. Unfortunately, the system might be a daunting endeavor to implement.
Wall Street. The lynchpin of American Capitalism—I believe it needs a massive redo. While investing for a rainy day, saving for retirement, and planning your kids school days are noble practices that must be kept alive, Wall Street and the banks have been given a free range to muck up peoples lives for too long.
Back to my opening statement: Capitalism. Socialism. Mixed Economy! Adam Smith who invented Capitalism believed in a free trading market that would benefit all; I don’t believe he ever imagined his idea would become the benchmark of greed. Karl Marx believed that Capitalism would eventually destruct. But his vision of equality that he termed Socialism was tunneled; he couldn’t see the coming doldrum that would spread across his nation like an inky cloud suffocating the people’s innovation and drive. Socialism has never worked. Those that think of Sweden and Norway are misguided—they are not Socialist nations. Social democratic theorist Eduard Bernstein who termed the phrase Mixed Economy, believed that a system of public and private enterprise working cooperatively was the way to go, fearing that ultimately Capitalism would reshape itself into Socialism. Is he right?
But in some ways these systems are just names. The Montagues and Capulets in Shakespeare’s play were warring families who hated each other, and thus caused the death of lovers Romeo and Juliet. It’s not the name is it? It’s what the bigwigs in charge do! And they call it a name.
Entrepreneurism is nowhere to be found as a political /economic system. But it sounds good to me. Investmentism? No such word. But it kind of befits the Capitalism we see in America today. If you have the money to invest and you do, you’ll make money and your money will make money. Forget the rest. Survival of the fittest. Bla bla bla!
Maybe there really isn’t a better system than Capitalism. Perhaps New Capitalism. After all, it’s not the name. It’s the policy.
But what do I know? As I said, I’m not an expert on these things.