CAPITALISM’S TO THE RIGHT OF ME, CAPITALISM’S TO THE LEFT
A recently-declared candidate for the presidency, John Hickenlooper, was interviewed on a television program and was asked, point-blank, if he was a capitalist. He refused to answer, preferring, instead, to remark that “capitalist” was nothing but a label.
I heard this exchange with some astonishment. I knew that the word “socialist” seemed to have become an acceptable descriptor for Democratic politicians, at least within the progressive wing of the party, but I didn’t imagine that the party’s movement to the left had been sufficiently strong to make a candidate unwilling to admit being a capitalist.
But, upon further reflection, I began to think that Hickenlooper dodged the question not because he feared alienating the far left of his party, but because to answer it was, just as he had insisted, to accept (or reject) a highly ambiguous, almost meaningless, label.
What if he had said “yes” to the question? What might we suppose that he meant by that? One possibility is that he was declaring his support for the sort of capitalism that is encapsulated in dictionary and text-book definition, i.e. an economic system that rests upon private property, profits, competition and the free market. Often such accounts of capitalism quote from the work of the original formulator of the system, Adam Smith.
But we should keep in mind that capitalism of this sort hasn’t existed in this, or any other industrialized country, for a hundred years or so. It is an obsolete form of capitalism — often referred to as “laissez-faire” capitalism — of which some semblance existed in the 1920s in the U.S., but which disappeared completely immediately after the Second World War.
Laissez-faire capitalism, which came into being in the late 18th century as the guiding system of the industrial revolution, quickly proved to cause quite horrendous consequences. As early as 1833, the English government found it necessary to pass a law regulating child labor — thereby significantly impairing the “free market” for labor. In the United States, the relatively unfettered capitalist economy of the 1920s created an incredible disparity between the rich and the poor, then plunged the country into the Great Depression. The New Deal turned its back completely upon the practices of that era.
I don’t deny that there are a good many people in conservative regions like Idaho who profess to believe that this is the true form of capitalism. They also recognize that laissez-faire capitalism no longer exists, and hence it is convenient for them to blame the problems of the current economic system precisely on its abandonment of those principles.
But that’s not the only meaning that one could attach to a “yes” from Mr. Hickenlooper. Most Americans call the current economic system of the U.S. “capitalism.” So he could be regarded as an advocate for the status quo.
But those who call the status quo “capitalism” choose to ignore that while we have private ownership and a form of market economy, we also have a powerful federal government that imposes a vast regulatory apparatus upon “private” production and ownership, that manipulates the economy through financial controls, that imposes a minimum wage, that prohibits labor practices that endanger workers, that sustains the agriculture economy through subsidies, and that is prepared to engage in massive interference in the “free market” to prevent monopolies from forming and to protect the country from periodic depressions. And the government has vast programs like Social Security, Medicaid, Medicare, the Affordable Care Act, Unemployment assistance, Aid for the disabled, and so forth, that completely subvert the “free market” that is supposed to characterize capitalism.
It is far more accurate to call our economy a “mixed economy.” Most European countries also have mixed economies, though, as the name suggests, the components of the “mix” may vary. The degree to which public interests, represented by the state, overrule capitalist interests, may vary dramatically from country to country. In Sweden, which some people choose to regard as a “socialist” country, taxation is high in order to support extensive services to the citizenry, and most workers are unionized. Negotiations between the privately owned corporations and labor unions take place at the national level, with the government playing a role. In some Nordic countries, a few essential enterprises are actually owned by the state.
Yet there is even another meaning that might be attributed to Hickenlooper’s “yes.” There is a kind of capitalism called “state capitalism” — arguably, the sort of system that is in place in both China and Russia — in which privately-owned enterprises are closely controlled by the state. They are systems within which immensely rich “oligarchs” reap capitalistic profits, but must obey the economic planning decisions of the state.
To sum up: capitalism is not a single economic system, but a horde of systems, varying in detail from country to country and within countries, and over time, according to the cultures and traditions of those countries and also to the character of the dominant political leadership at any given period.
When asked whether he was a capitalist, in expectation of a “yes” or “no” response, Mr. Hickenlooper faced the almost certain prospect of being misunderstood, so he chose not to respond. Unfortunately, that was unsatisfactory as well. This promises to be a race for the Democratic nomination in which capitalism and socialism are thoroughly discussed. He better have some answers in the future.
Leonard Hitchcock of Pocatello is an alumnus of the University of Iowa and did graduate work at Claremont Graduate University and the University of California, San Diego. He taught philosophy in California and Arizona for 15 years. In 1985, after earning a library degree, he was hired by Idaho State University. He retired from ISU’s Oboler Library in 2006.