There has been a lot of rhetoric coming from the Left alleging that capitalism has failed as an economic system, and it's time to acknowledge capitalism's failure and try something else. And even though this is a bald-faced lie, it is President Obama's strongest argument for re-election.
The debate has been raging for decades throughout the world, but it seems that we have finally reached the point here in the United States where one of our nation's two major political parties is, as a group, calling into question the viability of the economic system that made America prosperous.
Of course, to listen to President Obama out on the campaign trail, it is government, not individuals that have built America up into a great nation. In fact, Mr. Obama has even stated that it is the government that is responsible for the success of businesses like Google and Facebook. He and members of his party doggedly cling to the philosophy that more government spending will bring our economy out of recession - despite the fact that it has failed to thus far. When faced with the failure of President Obama's "stimulus" bill, his supporters only say that it failed because $800 billion wasn't enough spending. But then, they also tend to turn a blind eye to the billions of dollars that were wasted in the stimulus boondoggle. Former House Speaker Nancy Pelosi even went so far as to make the ridiculous claim that increases in unemployment benefits would help to stimulate the economy...but even though unemployment remains high in the US, those unemployment benefits Pelosi insisted would spur economic recovery don't seem to have had the desired effect.
But before we condemn capitalism and throw it in the dustbin of history as a failed economic system, we should probably look in to the reasons why American capitalism is failing. After all, it's quite inexplicable that a system that brought such great prosperity and created the world's greatest superpower should be declared a failure based on a few bad years.
The truth is that if American capitalism is dying, it's not due to natural causes. America's capitalist economic system has been under the gun for decades, and as the United States government has continued to grow year after year, government interventionists have consistently chipped away at our capitalist system, injecting the poisons of regulation, bureacracy and corruption into our economic system, until now we have a capitalist economy that just doesn't function like it should.
It happens time and time again: politicians, always purporting to have the best of intentions, pass regulation after regulation, making it more and more difficult for businesses to operate. Then it's usually those same politicians who are the most vocal when businesses pack up and move operations out of their state or overseas - it's as if the American sense of entitlement is so strong that we feel we are entitled to have employers keep their operations on our shores, no matter how anti-business our government becomes.
Things get even better when you throw corruption into the mix. Our politicians are bought and sold these days, living at the whim of corporations and special interest PACs, who lobby them for legislation and fund their campaigns. People condemn big business for engaging in these practices, but when it gets right down to it, we should expect no less from capitalists in a corrupt system. After all, self-interest is one of the hallmarks of capitalism, and our political system is entirely geared so that engaging in lobbying is almost essential to big business over the long-term.
It is under these conditions that we saw the financial sector and the housing market collapse, which led into our current recession. Many of the same politicians who even now will condemn big business and blame the housing bubble on predatory lenders have cozied up to big business interests for years, and forced many lenders to make bad loans because, in their eyes, everyone has the "right" to own a home. Many of the very same politicians who are responsible for overseeing Fannie Mae and Freddie Mac, such as Barney Frank, even now have an all-too cozy relationship with the troubled lenders. But politicians are professional liars, and all too many of them have managed to shift the blame for the recession away from their own corruption and onto the businesses they allowed to corrupt them.
Put businesses in a situation where they need corruption in order to survive, and corruption is exactly what you will get.
But the nice thing about capitalism is that even if our wannabe well-intentioned political leaders do manage to kill our capitalist system, capitalism will prevail, in the end. Governments across the world that have experimented with socialism have found that the system does not work. Whether it is socialism or communism, all the system does is shift the power and money away from people and businesses and place all of the power and money into the hands of overbearing government bureaucrats. We can see it in America already, where the average government worker makes more money and gets better benefits than the average private-sector worker. Meanwhile, the number of Americans living on food stamps continues to rise.
This is the true difference between capitalism, socialism and communism: one allows people to own property and aquire wealth, while the other two subjugate the people to the whims of the bureaucracy. Capitalism allows broad-based upward mobility through hard work and productivity; socialism and communism allow extremely limited upward mobility only through the government work and obedience to the State. Capitalism allows freedom: freedom of choice, freedom of ownership, freedom of mobility. Socialism and communism only bring servitude to the government...and the only way to escape that slavery is to hopefully one day become a high-level bureaucrat.
So many of the problems in our current capitalist system stem from the (sometimes) well-intentioned actions of people who assume that capitalism is evil. Just look at the Obama campaign's recent "Life of Julia"
cartoon. According to President Obama, modern women cannot function without government assistance. The cartoon looks at Julia through various life stages, from age 3 up through retirement, detailing all of the government programs Julia must depend on in order to live a healthy, successful, and productive life. It makes one wonder how human society has survived thoughout history thus far without a cradle-to-grave nanny state government holding everyone's hands throughout their entire lives. As Julia grows up and has a child of her own, a father is conspicuously absent from the images - because in the world of the Left, the State is father.
But if you look closer at Obama's version of lifetime dependency on government, it tells a different story.
- In accordance with President Obama's extreme views on abortion, Julia would have been aborted in her third trimester in a partial-birth abortion, making her inelegible to receive any government assistance.
- Provided Julia did survive to be born, at age 3 she would enter the government-controlled school system, which, according to President Obama's political philosophy, will primarily consist of politically-correct indoctrination expresslly designed to turn children into left-wing activists.
- At age 18, Julia will have completed a politically-correct education program focused almost entirely on lessons geared toward special interest viewpoints, and will graduate from high school with no real knowledge of her nation or her world, and no functional concept of math, science, or grammar. If Julia lives in the inner-city, she likely won't graduate at all.
- By the time Julia is 18, laws will be passed making college tuition-free and mandatory for all high school graduates. The academic system willl have crumbled under the burden of too many students who received sub-standard educations in the public school system, turning university education into the equivalent of a high school.
- During college, Julia urgently needs surgery for a life-threatening condition. Since the federal government now has control of all healthcare, Julia goes to her state-mandated physician, who prescribes painkillers and puts her on an 18-month waiting list. Julia is forced to travel to another nation to get the care she needs.
- At age 23, newly-wed Julia would like to settle down and be a homemaker, but with the rising cost of living and declining value of the American dollar thanks to President Obama's economic policies, she has no choice but to look for a job. She starts her career as a web designer, but is laid off after only a few months when her company is fined after one of the subscribers to their site posted copyrited material on their site without their knowledge.
- At age 27, Julia is still jobless and lives off of her unemployment checks. Thanks to Obamacare, the health insurance industry has collapsed under the burden of a constant string of mandates and regulations. Medical research is at a stand-still, as government-mandated price controls and overregulation have made it impossible for drug companies and medical device manufacturers to continue to fund their R&D departments.
- At age 31, Julia has four children, because she still cannot find employment, and welfare increases are her only means of gaining more income. Throughout all four pregnancies, she has to deal with government bureaucrats to schedule appointments for maternal checkups and prenatal care, which were previously covered by the now-defunct insurance industry. Prenatal screenings are no longer provided, as the overburdened state healthcare system can no longer afford them.
- At age 37, Julia is forced to abort her fifth child, as the state has imposed population controls in an attempt to curtail out-of-control spending. Her other children attend state-mandated public schools, where they are taught to be loyal to the State, but get no real education.
- At age 42, Julia starts her own business, and while President Obama's tax cuts for small businesses help initially, as she struggles to grow her business, the burden of ever-increasing employment laws and business regulations makes keeping the doors open a struggle. Julia is forced to close her business down because she cannot afford the across-the-board tax increases the government has to impose in order to fund its constantly-growing welfare state, and she cannot afford to move her operations into a state or a nation with a lower tax burden.
- At age 65, Julia finds out that she has cancer. She goes to her state-mandated doctor for treatment, hoping that she can get surgery or chemotherapy. Her doctor submits her request to the State Committee on Health Care, which determines that they cannot justify providing expensive chemotherapy treatments to an unemployed 65-year-old woman.
- By age 75, Julia has been dead for several years, just like the Social Security program she had initially been depending on for her retirement, which the government could no longer afford to fund back when Julia was in college.
This is what comes from cradle-to-grave nanny statism. No matter what good intentions are used to justify the regulations, the tax increases, and the handouts socialism simply does not have the longevity of fair trade and private ownership. Too many people are too willing to take advantage when there's free stuff involved, and there is no motivation to give back, because in many people's minds, free stuff is owed to them.
Just look at the Occupy movement. They've been getting a lot of press coverage because they believe that "the rich" should be paying more money so that they can have free education, free health care, no student loan debt, unending unemployment coverage, and on-demand mortgage assistance.
There are several problems with this line of thinking....
To begin with, "the rich" are mobile - they have the wealth to move their homes, and in some cases to move their companies' operations to other states or nations. So, as wealthy people see their wealth continually being confiscated to provide free stuff to a bunch of ungrateful moochers, what is to stop them from packing up and leaving? It is already happening here in California, as the state continues to adopt anti-business policies, and as businesses keep leaving, it only makes it that much more difficult for the state government to meet its ever-increasing expenses.
The class warfare advocates also seem to treat "the rich" as though they have an unlimited pool of wealth from which we can draw to pay for all of these hand-outs, but that simply is not the case. The Buffett Rule that the Democrats have recently been pushing would provide enough revenue to fund the federal government for a few days. Trying to fund an unending list of government programs and handouts would quickly eat up the wealth of America's rich. In that way, America's socialists would get one of their wishes: we would have income equality...because we would all be living in poverty.
But even if the Left manages to kill American capitalism, capitalism isn't going to go away. Even Communist Russia had a black market, as China does today. There is a reason for that: capitalism is human nature. We all place value on certain possessions, and when we find something we want, it is natural to weigh opportunity costs and to offer something in exchange so we can get what we want.
This is what socialism and communism just don't take into account: capitalism is more than just an economic system, it is humanity's natural state of being. Whether it takes the form of the New York Stock Exchange, or two schoolchildren trading food in the lunchroom, capitalism is just the word used to describe normal human behavior. Even the communist state of China has managed to maintain its economic viability largely because they do not practice capitalism in their economic dealings with other nations.
Capitalism isn't the fairest economic system when measured by the Leftist standard of "social justice," but it is the fairest economic system when it comes to rewarding hard work and ingenuity. When it is practices in its purest form and not clogged up with the good intentions of politicians, capitalism is the best bet for economic fairness, freedom and prosperity. It is the economic system that can be squelched and repressed, but can never die.
American capitalism has not failed. The politicians have not killed it yet, and even if they do, capitalism will still live on, in one form or another, reminding us of the prosperity that could be ours.