Capitalism Buried in an Empty Casket

Now that the Bush administration has nationalized most of the financial sector, and Obama has been elected to fill those ever-expanding shoes, and capitalism stands, in shackles, in a tumbrel lurching along the street to the place of execution, it's worth asking – as many have – if the whole affair was really capitalism's “fault”. And the general agreement from the “conservative” side seems to be that it was not capitalism or its ideological base that was at fault, but the fact that it had been both corrupted by government incentives and crippled by government regulations. I would expand on this a bit to point out, as I have before, that a large piece of the blame also lies with the so-called capitalists, and their fault lies on the moral and ethical side of the divide. If they wanted to be a wholly-owned subsidiary of the government, they should have just said so. But it was better to keep pretending to be “private”, and “competitive”, and “free enterprise”, and to keep skimming off the top and then jumping ship just before the whole structure collapsed -- when, in truth, they had benefited from government subsidies, monopolies, and preferences all along. These are the moral depths to which these “industry leaders” and “mangers” fell before the crash, and the ones who haven't already headed for the tall grass are still wallowing the same moral and ethical mire (and no one is the least bit surprised, which tells you something right there).

But having said that, I'll go further. Back in 1966, Ayn Rand produced a book called “Capitalism: The Unknown Ideal” (including three articles by Alan Greenspan -- “Lo, how the mighty have fallen!”). Among the points was that capitalism, when done right, i.e. truly without artificial props from, or interference by, government, is a powerful expression of, and engine for, human freedom and prosperity. But it is “unknown” because it is typically practiced in an imperfect way (not the capitalists' fault, but government's) and because the spirit of the times runs directly against both the ideas of capitalism and the acknowledgment of its benefits. (The book came out two years after Goldwater was flattened by LBJ in the 1964 election. The National Review was 11 years old, and The American Spectator wasn't born for another 11 years.)

I would add that capitalism, even when practiced imperfectly, as it was in the 19th Century, say, is still far preferable as an economic model to any of the alternatives, particularly if the society we have in mind is based on ever-expanding technology. (If you're content to spend your life sitting around a smoldering campfire like an Amazonian Indian, I guess it doesn't matter much what “system” is in place.) And of course there are all sorts of arguments against the “robber barons” and the evils of factory work in the cities (but if it was so evil, how come millions of people walked off the farms to go to the cities and find factory work?). But American civilization as it is today would certainly not have turned out this way without the (relatively) unbridled capitalism of the Industrial Age; that much must be admitted, whether we always like the result or not. (Pittsburgh is an excellent case in point, since the city was built, and prospered, during the Industrial Age. It has also become a major center for medical research and treatment due, I suspect, to the high rates of chronic illness brought on by a lifetime of work in the mills or of living in a severely polluted environment. But would the people who live here have rather lived their lives as farmers, hunters, and trappers, the way the rural folk did at the same time the city was a boom town?)

But over the years, things changed – and, as usual, I think the first major blow was the New Deal, which was as much a “new deal” for business as for “the people”. The deal was – and I believe FDR had this in mind all along – “We (the government) protect you (business) from the wrath of the people...” – i.e. from violent revolution and collectivism, which was the dominant political/economic movement in the world at that time – “...and in exchange you accept laws, regulations, the unions, and a generally bad press. But you can keep most of your profits, and heck, we'll even toss in a war from time to time to keep the armaments makers (and Detroit) in the black. Deal? [Sound of angry crowd of victims of the Depression banging on the front gate of the estate.] Good. I knew you'd see it our way.”

Thus began – or accelerated – the long decline of capitalism, and the eventual reduction of American businesses from a noble estate to being the pet poodle of the government (or vice versa). One consequence, of course, was that what the unions wanted, they usually got – which is a big part of why Detroit has its hand out at this time. On the other hand, business had the autonomy to, in many cases, avoid the union curse altogether, especially on the retail side (Wal-Mart etc.), and even managed to push NAFTA through – under a Democratic administration, no less! -- and start “outsourcing” and relying on overseas labor in a big way. So overall, the contest between management and labor has been about even over the years, except that they have both been severely co-opted by government; they are indebted to it, they rely on it, and they can't, in their wildest dreams, imagine getting along without it. So when things get this incestuous, is it any wonder a monster is born once in a while? In the present case, the monster is the government, like a huge amoeba, surrounding and absorbing major chunks of the business and financial sector, once again in exchange for “stability” and keeping the pitchfork-toting peasants away from the CEOs' gated estates. No one wants to mention that it was the government that peddled the "junk" that business has been injecting into its veins all these years. And all the CEOs have to do is publicly admit that they're a bunch of whores, collect their bonuses, and go back to the office. No muss, no fuss. The unions are thrown a bone or two – like the end of the secret ballot for voting for unionization – but not a thing is done about jobs going overseas or disappearing entirely, except in certain privileged redoubts like Detroit. And everyone goes away a bit tired but basically satisfied, and they wake up the next morning refreshed and wondering what all the fuss was about, since they now live in an even braver, even newer, collectivized world.

So what I'm trying to say in all this is that the current government bailouts/takeovers don't constitute a “loss” of anything of significance. It's more like the final payment on a deal that's been going on for decades... the culmination, the denouement, the consummation. It's all out in the open now – business is just another branch of government (or vice versa)... “labor” is no different from “government workers”... and that silly old thing called “capitalism”, well, where did it ever get us, anyway? It just led to a lot of strife and “unfairness”, and we're better off getting rid of it (which is like saying, I'm better off with nice pearly dentures than with those old, somewhat crooked, but still perfectly functional, natural teeth). So don't mourn the demise of capitalism. You should have done that back around 1933, if you'd been around at the time. And really, we may never have had it in “perfect”, ideal (a la Rand) form... but what we did have gave us fairly dramatic results, and I don't think we can expect anything comparable ever again from the current crop of perfumed corporate princes, parasites, and lackeys. What we're going to get now is the sort of decadent torpor that characterized the Byzantine and Ottoman empires in their declining years. But that's OK, because we'll never have to “stand and deliver” again the way we did in World Wars I and II. The U.N. is taking care of all that now. Right? But... psst... don't tell Al Qaeda, OK?