In a capitalist system “a country’s trade and industry are controlled by private owners for profit, rather than by the state.”
“Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.”
Capitalism has been around for ages. The stock market began when the Dutch East India Company began selling shares out of Amsterdam. When other countries saw how this increased profits, they adopted the same model in their own countries. Even in nations governed by monarchs there was some private enterprise, small businesses offering the services of artisans, bakers, farmer’s markets, cobblers, tanners, silversmiths, and so on. Although the king or queen took a share, the owner of the business kept most of the profits.
However, when steam engines and then combustion engines came along, as monarchies began to fail, get overthrown, or become less responsible for governing and more titular in nature, we started to see capitalism on steroids. This was an age of invention and innovation, with machines, improvements on machines, improvements on ways to fuel machines, new designs to produce with machines, and finally assembly lines which followed immediately after Ford’s example. Wheels turned on new cars, on railroad trains, boats got engines, the world practically bustled with industry, at least in Europe, America, Canada, and some of South America. Streets turned gritty with ashy remnants of burning coal and later gas and oil. Even electricity often had to be fueled with fossil fuels, although hydropower was also used and did not foul the air. There was work for everyone and there were no rules.
These days capitalism may be a problem the world faces, rather than the engine of prosperity. Both definitions I found use the term control. Private owners control trade and industry, supply and demand. Both definitions claim that the state (the government) does not have a role in business. Capitalism would be fine, but capitalism with no controls, no rules, no regulations is untenable. Conservatives stridently insist that we must have free markets, we must have an unregulated business scenario if we want booming profits. America’s economic problems are not necessarily with capitalism. It is just a system for doing business. The system doesn’t require any ‘purity’ in order to function, and since it is an idea, it has no values of its own. The values belong to those private owners who say that profits are highest when business is unregulated. It is the way humans interpret capitalism that makes the system problematic.
If profits are all that matters, then every nation could just be run by corporations, and everyone would buy from the company store, and all the profits would accrue to the owners. Since there would be no central government corporations would probably run their own little kingdoms and perhaps have wars with each other. Capitalism does not, in and of itself, offer any governance, allow for a civilized society, leave room for small businesses. Left to their own devices corporate owners would not concern themselves with anyone’s quality of life, except the owner’s own quality of life.
But capitalism is not our system of government; it is simply the way we do business. Totally unregulated capitalism is incompatible with democracy. We see what happens with too much market freedom. Wealth pools at the top. A system for conducting business may not be greedy, but the people who own the parts of the system can be. They can be cruel and uncaring, and they can begin to feel that they are above government and above workers; above it all. Even people who seem civil may still believe that all the wealth accruing to them is theirs by right. After all, they started the company, or s/he started the company. Owners forget that their business could not have expanded to provide ever greater profits unless they hired people to help them. They did not see the people as helpers; they are workers, lesser beings, to be paid as little as the owner can get away with and still attract the quality of help s/he needs.
Conservatives have come to be the American citizens who insist that business can only operate if government keeps hands off. They act as if the definition of capitalism is absolute and not mutable. They act as if business profits everyone if there are no rules and regulations, if we let supply and demand control the marketplace, if trade is freely determined by owners of corporations, and if it is up to corporate leaders to decide how trade will be conducted. (Do they get together and decide, or is it every business for itself?) Conservatives insist that if governments keep their “mitts off” business, the profits will be so great that they will overflow and trickle down on workers. They never describe how small that trickle will be.
It is a myth that capitalism only functions or functions best when there are no rules. Free markets and unregulated capitalism have not produced market stability or enough trickle down to reach those at the bottom of the culture. We have seen markets experience cycles of boom, recession, and even depression without some oversight. These cycles don’t always exempt the wealthy owners either. Even the rich can lose everything and, in fact, they have a lot farther to fall.
Our economy will not survive the current conservative messaging on corporations and businesses. Just as conservatives seek an originalist interpretation of the Constitution, they seek totally unfettered capitalism. “Fettered” capitalism works just fine. Harness capitalism a bit and it can serve everyone in a society and not just those at the top. If the thirst for profits of those at the top of corporations gets too heavy, then it robs everyone at the bottom. If those on the bottom cannot perform their role in a capitalist system as consumers, then there is no demand for goods. Regardless of the supply side options no one can afford to buy whatever is on offer, and capitalism dies, the economy dies. Greed at the top will kill the economy just as surely as too much regulation.
Conservatives say that Democrats will ruin the economy. They want to allow the government to exercise control over business by making rules and regulations about things like masking and vaccinations. Even before the pandemic, Conservatives said that Democrats liked to make up all kinds of rules to hamstring owners of businesses. They want to raise taxes on the wealthy. Conservatives say, if we call it “redistribution” and label it as “socialism” people will climb on board with us to fight the Democrats, even if they are low wage workers. This is exactly what has happened.
Too much regulation can also be bad for a capitalist economy, but there is a whole lot of room between no control and too much control. The economy will show us when the balance is right. There will be a more even distribution of money, a prospering middle class, and no poverty. But those at the top will still be wealthy, just a bit less wealthy. These are the signs of a healthy economy. These are signs that taxes and regulations are set at appropriate levels.
If you look at our historical record on booms, or prosperous times, and recessions and depressions, it tells a tale. Recessions and depressions tended to occur after Republicans were in power. Steady progress tended to occur when Democrats were in power. Capitalism should not conform to an absolute definition, it should conform to reality, to conducting the system in a manner that will achieve balance, and a healthy planet. With all the great minds that have delivered us to the brink of the technological age you would think there would be a plan for a sustainable business model that is not totally out of balance, as well as a sustainable planet. Those of us who are not wealthy could stop enabling wealthy corporations that are hoarding profits. We could support laws that help workers, and we could insist on more balance in pay and in taxes.
Just out today, Sunday, October 3, 2021