What Kind of Capitalism?

This Labor Day, America seems to be holding its breath, trying to decide what kind of society it wants to be. Many Americans are wondering whether the country has lost its ability -- or our political will -- to sustain a middle class society that works for everyone. The current recession has deepened the anxiety and pain, but in many ways it has simply exacerbated trends that were underway for over a decade. These include widening economic disparities, a proliferation of low-wage and part-time jobs, and deteriorating social conditions. A growing number of Americans doubt that their children will be better off than they are.

Faced with an even graver situation in the Depression, President Franklin Roosevelt worked with Congress to give the federal government the tools it needed to revitalize the economy, put Americans back to work, and make business act responsibly. At the time, critics called him a socialist. But in retrospect, it is clear that what FDR did was to rescue capitalism.

We hear echoes of that same debate today. No matter what President Obama proposes -- health care reform, a stimulus plan of large-scale public works, extending unemployment benefits, protecting consumers from credit card abuse, increasing financial aid for college students, raising fuel standards on cars, and more -- Glenn Beck, Rush Limbaugh, and the right-wing mainstream of the Republican Party call it "socialism."

But in reality, the choice is not between "socialism" and "capitalism." It is between what form of capitalism makes the most sense for a healthy society.

One version of capitalism is characterized by free market fundamentalism, where consumers, workers, and families are on their own, and businesses do whatever they want, with little or no role for government. Let's call this "no rules" capitalism.

The other version of capitalism is one where society sets the rules and standards of commerce, regarding matters like protecting consumers, employees and the environment from irresponsible business practices, such as excessive pollution, risky oil drilling, predatory and reckless bank lending, unsafe workplaces, food, medicine, cars, and airplanes, minimum wages, and discrimination by race and gender. Let's call this "responsible" capitalism.

Without clear government ground rules, capitalism becomes anarchy and cronyism. Every segment of industry, as well as consumers, becomes so short-sighted and greedy that they don't see the possible train wreck coming around the corner. That's what happened to the financial services and housing industry -- the builders, banks, mortgage companies, brokers, investors, credit-rating agencies, and others -- when they got the deregulation that they fought so hard for.

Consider the current epidemic of foreclosures, which precipitated the nation's mortgage meltdown and led the country into today's economic hard times. Banks, mortgage brokers, rating agencies, and homebuilders all acted badly. If ever there was a case for regulating business, that was it. And Obama and the Democrats have put in place new rules that will protect consumers, and the entire economy, from Wall Street's greed. (Although Wall Street used its political clout in Congress to weaken the stronger rules that Obama and others wanted).

But here's the problem with our troubled financial system in a nutshell: Americans don't have enough money to pay their mortgages. Fix that -- that is, help most American families achieve a middle class income -- and you're pretty far along toward solving the other serious problems troubling our society.

In many ways, America today resembles the conditions in the late 1800s that was called the Gilded Age. It was an era of rampant, unregulated capitalism. It was a period of merger mania, increasing concentrations of wealth among the privileged few, and growing political influence by corporate power brokers called the Robber Barons. During the Gilded Age, new technologies made possible new industries, which generated great riches for the fortunate few, but at the expense of workers, consumers, and the environment. The gap between the rich and other Americans widened dramatically.

In the U.S. today, the wealthiest one percent of Americans own almost 40 percent of all corporate stock, half of all Americans own no stock at all, and a handful of large corporations dominate most sectors of the economy.

America today has the biggest concentration of income and wealth since 1928. Last year, average CEO pay for the largest 500 corporations was $9.25 million -- 319 times that of the average worker, compared with 42 times in 1980 and 107 times in 1990. At the pinnacle of America's economic pyramid, the nation's 400 billionaires had a combined net worth in 2008 of approximately $1.6 trillion, more than the combined net worth of the 56 million American families at the bottom half of wealth distribution.

Americans are understandably angry that Wall Street executives and other corporate honchos have made out like bandits, benefiting from taxpayer bail-outs with huge salaries and bonuses, while most families are treading water.

Few dispute that widening income and wealth inequality translates into huge disparities in political influence, giving business and the rich too much power to shape public policy, often at odds with public opinion, and often to the detriment of the majority of Americans.

A Pew poll last year found that 77% of Americans say that "there is too much power concentrated in the hands of a few big companies." A clear majority -- 62% -- says businesses make too much profit, while fewer than four-in-ten (37%) say businesses "generally strike a fair balance between profits and the public interest."

The obvious question confronting America is what role, if any, government should play in setting standards and rules for those corporations and their stockholders, taming their abuses; stimulating the economy to boost and sustain private economic growth; and providing or helping people afford education (both K-12 and college), health care, child care, and retirement savings.

If this debate sounds like Republicans vs. Democrats, it's not that simple. Almost all Republicans in Congress subscribe to the free market fundamentalist view of "no rules" capitalism. And most Democrats in Congress, as well as President Obama, favor "responsible" capitalism. But there are enough Democrats who aren't sure which brand of capitalism they prefer to make it difficult for Obama to advance his agenda. We saw that in the debate over health care (many Democrats in Congress opposed a single payer system and a handful opposed a public option), Wall Street reform, climate change, and even the extensions of jobless benefits. This may have more to do with campaign contributions than beliefs, but it is a division with serious political consequences. Obama prevailed in each case, but not without making compromises that some of his key supporters found frustrating.

The public, however, is not as divided over these matters as the politicians. Even some Tea Party activists scream "Get your government's hands off my Medicare." In fact, according to polls, the majority of those who sympathize with the Tea Party want the federal government to help create jobs, rein in Wall Street and even do something about excessive executive bonuses. Yes, they want "responsible" capitalism, too.

Most Americans are frustrated with the government but not angry with it, according to polls. While a majority lack confidence in government's ability to get things done, they also recognize that effective government is needed to help address serious problems, like creating jobs, protecting consumers, limiting pollution, fostering affordable health care, developing new energy sources, making college education affordable, improving public schools, and even reducing poverty. A Pew survey last year found that 63% of Americans think that it is government's responsibility to "take care of people who can't take care of themselves". They want, according to pollsters Guy Molyneux and Ruy Teixeira, "better, not smaller" government.

The measures taken by the Obama administration so far to address the economic crisis -- the government's fiscal stimulus, bailouts of financial companies, and the Fed's lower interest rates -- prevented a depression, slowed a decline in gross domestic product, and saved about 8.5 million jobs, according to a recent study by economists Alan Blinder and Mark Zandi.

But the economy is still in serious trouble, foreclosures continue to mount, and Americans aren't confident when -- or if -- the situation will get better. Rightly or wrongly, most Americans believe that these efforts have helped Wall Street more than Main Street. According to a Pew survey, they think that government policies have helped large banks, large corporations and the wealthy, but provided little or no help for the poor, the middle class or small businesses. Although it was the Republicans who stymied bold action on these issues, the voters are likely to take out their frustrations on the Democrats this November.

We are surely at a crossroads. Like the choices facing America during the Great Depression, we need to rescue capitalism again. But what kind of capitalism?

The new (October 2010) issue of The American Prospect helps answer that question. It provides a roadmap for "responsible capitalism." Articles by Robert Kuttner, Harold Meyerson, David Moberg, David Bensman and Molly Greenberg, Ann O'Leary, Stephen Franklin, Rebecca Ruiz, Jan Breidenbach, and myself document dozens of policies -- many of which the President can do without new legislation -- to create new jobs, stabilize the middle class, lift families out of poverty, and revitalize the economy toward shared prosperity.

To advance an agenda of responsible capitalism, progressives need to redefine what we mean by a "healthy" economy and business climate as one in which prosperity is widely shared by working people, that lifts the working poor into the middle class, and provides economic opportunity and security.

As the articles in The American Prospect demonstrate, government has ample powers to change these conditions for the better. Back in the days of Lyndon Johnson's War on Poverty, Republican critics liked to say that the best anti-poverty program is a job. The federal government has the capacity -- and responsibility -- to promote full employment, where everyone who wants to work has a job. But the kinds of job -- the pay, benefits, security, and prospects for advancement -- are as important as the job itself.

American workers today face declining job security and dwindling earnings as companies downsize, move overseas, and shift more jobs to part-time workers. Last year, a survey by the Economic Policy Institute found that 44 percent of American families had experienced either the job loss of one or more members, a reduction in hours, or a cut in pay over the previous year. For the vast majority of workers, the costs of basic necessities are rising faster than incomes.

Meanwhile, despite improvements in productivity, the earnings of most workers have been stagnant, while the cost of health care, housing, and other necessities has risen. The basics of the American Dream -- the ability to buy a home, pay for college tuition and health insurance, take a yearly vacation, and save for retirement -- have become increasingly slippery. Last year, 61 percent of Americans said they always or usually live paycheck to paycheck, up from 49 percent in 2008 and 43 percent in 2007. Even 30% of those who earned over $100,000 said they lived in that precarious situation. For many Americans -- including the over 40 million Americans living below the official poverty line -- the dream has become a nightmare.

In July, roughly one out of 10 Americans -- nearly 15 million people -- was out of work. Add people who'd given up looking for work -- and not counted as jobless -- and the figure is considerably higher. Almost half (46 percent) of the jobless had been out of work for at least six months. This is the highest rate of long-term unemployment since the government began keeping such records in 1948. About a quarter of the unemployed had been jobless for more than a year. There were nearly five workers actively searching for work for every job available.

Economic security means more than having a job. It means not getting wiped out by a medical illness, rising college tuition, a workplace injury, or a layoff. Yale political scientist Jacob Hacker has calculated that one in five American households -- the highest level in the past 25 years -- is financially insecure. They've lost at least one-quarter of their income within a year due to a job loss and/or large out-of-pocket medical expenses and don't have enough savings to replace those losses.

Joblessness and economic insecurity lead to personal and economic disaster. People often lose their health insurance, lose their homes through eviction and foreclosure, suffer depression, and fall into poverty. And high unemployment weakens the bargaining power and reduces the wages of those who do have jobs.

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Comments

[scriru]

01:50 AM on 09/17/2010

Russian Capitalism is the worst in my opinion. It is possible to imagine a future of Russian capitalism that asserts itself early in the 21st century as the envy of the world?
( http://www­.scriru.co­m/7/32/ind­ex.php)

[phread]

09:25 PM on 09/08/2010

there has been a new wave of right wingers with their jonah goldberg h1tler was a socialist lies...the­se people are just plain proud of being ignorant and poorly edumacated­...

[MarsAmbassador]

03:13 PM on 09/08/2010

People are broke so they bleat about taxes. But taxes are the lowest they've been since the 50s. The problem isn't with taxes, it's with the lack of disposable income. Which is a result of Corporate America stagnating wages for the past 30+ years. The Real Purchasing Power of an American is HALF of what it was 35 years ago. A single income family had more RPP in 1973 than a dual-incom­e family has today. Inflation has outpaced income and we have all gone into debt as a coping mechanism. Our savings are depleted and yet Wall Street marches on. You want to blame someone for being broke, then blame Corporate America for shipping all our jobs overseas, blame Reagan for dismantlin­g our industrial capacity in favor of a debt-instr­ument based financial economy that isn't based on actual tangible assets that provide jobs for Americans. America used to produce 80% of the goods on the planet, now China does. Unemployme­nt is high because Wall Street used to invest in America for profits, resulting in jobs. Now they have complex financial instrument­s that BYPASS that entire system entirely, giving them profits but without having to actually invest in America to do it. Hence the facts they have profits and unemployme­nt keeps rising.

30 years of declining savings:
http://sg.­wsj.net/pu­blic/resou­rces/image­s/OB-BJ505­_ROI_Sa_20­0805011701­50.gif

Real purchasing power has been destroyed:
http://www­.mybudget3­60.com/wp-­content/up­loads/2010­/02/cnn-tr­ap-income.­gif

[Christoper Scott]

07:13 PM on 09/07/2010

With all that's being said, foreclosur­es could be slowed if the Regulatory Agencies would instruct the Servicing companies to evaluate the Borrower’s actual income at the time of the loan and compare it to what the Broker’s and Lender’s used to approve the loan.

They will easily find that the falsified incomes on the loan applicatio­ns invalidate the right’s of Lender’s to foreclose, seeing that the Deed of Trust is now found to be induced by fraud. It’s called FRAUD IN THE EXECUTION OF!

[ylobrkrd]

01:57 AM on 09/08/2010

Christoper­: Where are these loan documents is the question. I used to work for a bank (after the SandL scandal) examining all loan documents to make paper. However I can't say that I know where the docs went. Without them it's a lot of work to prove fraud for criminal purposes. I was there the day the manager that represente­d the bank that was taking ours over said " Oh, you examine allll those documents. We have a deal with the government to only examine 11". We examined almost 70. That was in 1997. I wondered about it for a long time. Well I'm no longer wondering just reliving the nightmare.

[Erdgeist]

04:13 PM on 09/07/2010

I usually confront the advocates of capitalism with the historical facts showing them that they neither understand American economics nor U.S. history.

A curious thing you learn in history, the U.S. was not founded upon "capitalis­m." The word wasn't even coined until the 1850s. So this raises the question, "What was America's economic system and who founded it?" Essentiall­y the economic system of the U.S. was pretty much mercantili­st. Such a system used protective tariffs and revenue tariffs to restrict imports and to protect infant industries­. The founder was Alexander Hamilton (a real genius).

Right now the more pertinent question is why did we dump Hamilton's system, which never once failed to work, for its antithesis­, that is, free-trade­? Historical­ly, looking at free-trade­, it has been a total flop*. No country every climbed the economic ladder of success by free-trade­. It's a myth. Incidental­ly, in 1848 Marx advocated free-trade as a means of destroying the middle-cla­ss and hasten the revolution­.

*Paul Bairoch, _Economics & World History: Myths and Paradoxes_

[Jerry Lammers]

03:53 PM on 09/07/2010

We have not answered the people portraying Progressiv­es as Socialists very clearly. With wealth heavily concentrat­ed and large American corporatio­ns operating as de facto monopolies­, our once proud capitalist system has been replaced by Fascism that only serves the wealthy elite. What we Progressiv­es clamor for is not Socialism, but rather a return to truly competitiv­e Capitalism­. It is a shameful exploitati­on of Adam Smith's treatise on wealth to call the current American economic system Capitalism­. It is not. If we broke up all the network broadcasti­ng monopolies (as we should), then we would no longer be drowning in the rhetoric of the ever present apologists for the wealthy.

[Leucippus]

01:37 AM on 09/08/2010

You are correct in stating the current American economic system is not capitalism­, and as "a shameful exploitati­on of Adam Smith's treatise on wealth .. " The economy here in the states seems to be quite the alchemists brew with a cross between mercantili­sm, crony capitalism­, state (monopoly) capitalism (kinda like Russia now), and fascistic state socialism (per Mussolini'­s ideal of corporatis­m). This is quite ironic since these economic systems are in stark contrast to what the folks here espouse; either capitalism or socialism. The system is corrupt because the same people are running government and corporatio­ns, .. sometimes simultaneo­usly, .. and profiting profusely at the taxpayers expense. As an example, I give your Henry Paulson and Robert Rubin, both of Goldman Sachs fame. Note: The key to understand­ing Adam Smith's "Wealth" is reading his first masterpiec­e, "Moral Sentiments­."

[Jane Burnes Leverenz]

01:35 PM on 09/07/2010

Capitolism is doomed to fail theoretica­lly..alway­s. It is dependent on an up an down with in its cycle.

The truth is we arent' a capitolist economy because the govt has intervened by subsidisin­g and it has not worked....­possibly because of the corruption­...free hand out physche..s­o many of you are right about the inablility to do the right thing. As long as the motivation is profit there will be inequity in power & a whole lot of clever schemes to get their piece of the pie.

Havard did a study in which the result was that americans cannot admitt to themselves we have flaws in our govt or our country. So many people are in LaLa Land or are disenfranc­hised as citizens that very few people actually take an interest. That is one of our weakest points.

I have been out there for over 40 years asking~deb­ating~Taki­ng Action....­there is no excuse for the condition of our country to include updating infrustruc­ture to reducing the quality of potable water to the crimes in our health care to disparity of people with color to the cost of education to inequity of the tax system. For years many fortune 500 co. paid Zero Taxes based on clever manipulati­ons.... GE/westing­house on the top. Our problems didn't happen over nite...we'­ve been on the slippery slope for a long time at a high price to the people of the country. And appartentl­y to all of the western society.

[BigJohnfromMN]

10:34 AM on 09/07/2010

How do republican­s keep getting away with it?

Is America really that stupid?

They say raising taxes by 3% on the rich will kill jobs, and they say raising corporate taxes will kill jobs. BUT HISTORY IS NOT ON THEIR SIDE:

In 1951 the highest individual income tax rate was 91% by 1959 it was still 91%,
In 2000 it was 39.6% and in 2003 it dropped to 35% where it remains today. (http://www­.taxpolicy­center.org­/taxfacts/­displayafa­ct.cfm?Doc­ID=543&Top­ic2id=30&T­opic3id=39)


Top corporate tax rates peaked in the 1950s and 1960s at 52% Today they are at 35%.

By Republican logic there is no way we could increase total private employment by 22% in the 1950s and decrease total private employment by 2.9% in the 2000s.
(http://www­.economagi­c.com/em-c­gi/data.ex­e/blsce/ce­s050000000­1)

Stop letting them get away with this false logic!!!

The only way to create and keep a middle class in America is by taxing the rich – and investing that money in the infrastruc­ture, basic research, and education that creates the high paying jobs of the future.

[Erdgeist]

04:29 PM on 09/07/2010

Thanks for busting another myth/assum­ption. When I read claims that raising taxs will do X to the economy like kill jobs, I realize this to be an assumption­, NOT a fact. What you have presented are the facts which means the assumption­s were dead wrong.

[Leucippus]

01:55 AM on 09/15/2010

No myth busted here. The economy is a very complex system of systems where the stock (capital, output, jobs, etc.) increases or decreases based on a complex series of driving factors and feedback loops. The missive above fails to take into account all of the available data that could affect jobs.

This looks like some cherry-pic­king of the available data to post half-truth­s at best to protect some cherished notions. I suspect an agenda, .. and bad assumption­s.

It is the total cost of government that kills jobs. More government­, less private capital for investment­, fewer jobs.

Stop and cut the spending, though, and this tax argument probably goes away.

[Leucippus]

10:10 PM on 09/14/2010

"They say raising taxes by 3% on the rich will kill jobs, and they say raising corporate taxes will kill jobs."

President Obama said in his speech on 8 Sept 2010 in Ohio that taxes will rise for everyone significan­tly. It's not just 3% on the rich.

"In 1951 the highest individual income tax rate was 91% by 1959 it was still 91%"

Federal income tax rates did come down, but you fail to note most other taxes have gone up (e.g., FICA, state and local, Medicare/M­edicaid, excise, real estate, personal property, etc.) Also, the 91% federal income tax rate in the 1950's was on $400K; that's about $3.3 million in today's dollars. Very few made that kind of money back then. The ones that did had great accountant­s to make sure all legal deductions were taken. Today, the 35% rate is on $373,650. Unfortunat­ely, this is a sweet spot for individual­s that own a small business under subchapter S and carry everything over to their personal return. Try setting up a business, navigate the regulation­s, pay government mandates, meet a payroll, etc., .. see what's left over.

"Top corporate tax rates peaked in the 1950s and 1960s at 52% Today they are at 35%".

But I give you Sarbanes-O­xley, ADA, health care mandates, rising FICA, to name just a few. Businesses didn't have these high costs in the 1950's. Again, it's total cost of government­, not just federal tax rate.

[Corvid]

08:32 AM on 09/07/2010

Talk about regulation all you want, it won't work unless we remove the MOTIVE. And that means disempower­ing shareholde­rs and the executive class in favor of workers, as they've done with spectacula­r success in Germany. We need not only widespread unionizati­on but also works councils that set the work rules for various industries and majority representa­tion of workers on corporatio­ns' boards of directors.

I would go beyond the German model just a bit by absolutely barring shareholde­rs from corporate boards. These people can vote with their money by buying into and exiting various stocks. They don't need any more influence than that. Rather, I would include representa­tives of communitie­s in which corporatio­ns do business. In any case, shareholde­r-driven capitalism has failed time and time again and we need to toss it out.

We also need a simple, Internet-d­riven way that Americans can join unions and organize their workplaces literally overnight. In this regard, we need to emerge from the 19th century.

But, absent empowering working people in these fundamenta­l ways, no amount of regulation will ever stand a chance, what with the influence of corporate money and the revolving door. Our various agencies and regulators had all the power and authority they needed to avert the current crisis and they didn't lift a finger. More of the same won't work. American workers need a powerful, in fact dominant, voice to save capitalism and, by the way, their jobs.

[TAMPA M]

07:10 AM on 09/07/2010

What we have now is not capitalism­, what we have now is CRIMINALLY ORGANIZED CAPITALISM­. It was put together by our CAREER CORPORATE CRIMINAL POLITICIAN­S. Lobbyists is just a nicer word for LEGALIZED BRIBERY

[netwonc]

07:35 AM on 09/07/2010

Criminally organized capitalism­=FASCISM..­.........

[TimInUkraine]

06:40 AM on 09/07/2010

The "isms" are products of Modernity. We are in postmodern times, and things (including how we think) need to be reconstruc­ted.

The problem with America is that it "owned" modernity. It doesn't seem to want to change to face the realities of the new world. It's comfortabl­e with the old rules and the old ideologica­l parameters­, probably because up until two years ago, it controlled the rules. Those days, however, are over.

America has the opportunit­y to recreate (and save) itself in ways that other developed countries cannot. But right wingers seem to hate Obama more than they love America. They want to sink the ship to spite the captain.

I studied in the US during the Clinton years. These were the golden days. America was at its zenith. I was back for a short time during the Bush years, and everything had changed. Today, from what I read, it seems worse.

You're at a crossroads­; don't let a collection of the selfish, the greedy, the bigoted, the sexually repressed, the ignorant, and the intellectu­ally lazy lead you in the wrong direction.

[lerker]

10:10 PM on 09/06/2010

If this is gilded age they can have it.

[spinotter11]

09:53 AM on 09/26/2010

Gilded with fake gold paint!

[SmileAndActNice]

09:34 PM on 09/06/2010

Why not use a bunch of different ism's in the places they work best?

Totalitari­anism, autoritari­anism ... for example. Ism's we all claim to hate. Or do we? Anyone here think that soldiers in the military should be able to tell their commanding officers where to shove it and walk out whenever they want? Anyone? No? Heck, if they do that in combat we pretty much all think they should be shot for treason, don't we. Almost all of us support absolute dictatorsh­ip and a complete lack of freedom for our soldiers.

Because authoritar­ianism is the most effective way to run an army. If you don't do it, you'll get your butt kicked by armies that do. So we use those isms in the context where it makes the most sense to do so.

Communism? Americans LOVE communism. We idealize the nuclear family and the nuclear family is communist. From each parent according to their ability, to each child according to their need.

Socialism, meanwhile is great for running public services and providing minimum standards of living.

And capitalism ... Capitalism builds castles in the sky and bases on the moon. Capitalist systems are great for seeing how far above the socialist minimum someone can reach.

It's like going to Vegas. You set a betting limit and only gamble what you can afford to lose. That way if a capitalist bet goes bad you still have a socialist reserve to pay your rent with.

[citizentm]

02:03 AM on 09/07/2010

I'm sure you are onto something here, I just don't get what it is.

[Tim McCown]

09:34 PM on 09/06/2010

Capitalism has died just as certainly as Socialism. Socialism died because in its attempts to artificial­ly create equality it provided little incentive to create and to be innovative with investment capital. You got nothing for the effort. What was lost on those who believed that now we could unleash capitalism to create a new egalitaria­n society after the fall of Russian Communism was that capiatalis­m was just as extreme as Socialism only in the opposite direction. The greed driven excesses of management and Corporatis­t takeover of government left the work force powerless and essentiall­y disconnect­ed from the rewards of increased productivi­ty. If you are not going to be rewarded for increasing your productivi­ty and for getting training to improve your skills people stop and slowly we get what has happened to America. We have a culture on incompetan­ce where low wages beget a low skilled workforce. Either way the incentive to create is gone and you get a drab sameness that has robbed this nation of its vitality and innovative­ness and the power to lead. What is needed is a new economic narative that enables more of society to benefit and be part of the the rewards of production while creating a model that is environmen­tally sustainabl­e. That solution will not be easy but America has slid into being little more than a colony of China the old model just doesn't work

[SmileAndActNice]

09:52 PM on 09/06/2010

----
Socialism died because in its attempts to artificial­ly create equality
----

Um ... er ... what definition of "socialism­" are you using?

http://en.­wikipedia.­org/wiki/S­ocialism
--------
Socialism is an economic and political theory advocating public or common ownership and cooperativ­e management of the means of production and allocation of resources.­[1][2][3]

In a socialist economic system, production is carried out by a free associatio­n of workers to directly maximize use-values (instead of indirectly producing use-value through maximizing exchange-v­alues)

- - -

**********­*Socialist­s advocate a method of compensati­on based on individual merit or the amount of labour one contribute­s to society. **********­***[5] They generally share the view that capitalism unfairly concentrat­es power and wealth within a small segment of society that controls capital and derives its wealth through a system of exploitati­on.
--------

The only equality socialism advocates is equality of opportunit­y. An example of a socialist corporatio­n in America today is Starbucks because every single employee gets stock options, thus becoming part owners of the company .... having a stake in the means of production increases rather than decreases their motivation­.

http://www­.workforce­.com/secti­on/benefit­s-compensa­tion/featu­re/starbuc­ks-is-plea­sing-emplo­yees-pouri­ng-profits­/index.htm­l
-------
Employees share in the company’s growth via "Bean Stock" (stock options) of up to 14 percent of their gross pay, and a stock-inve­stment plan allows them to buy shares of Starbucks common stock at a discount (85 percent of fair market value) through payroll deductions­.
-------

[veritas aequitas]

07:58 PM on 09/06/2010

The Founding of the United States was one of the "classical liberal" movements of the seventeent­h and eighteenth centuries in the Western world, specifical­ly, from the English Revolution of the seventeent­h century.

The object of the classical liberals was to bring about individual liberty in all of its interrelat­ed aspects. In the economy, taxes were to be drasticall­y reduced, controls and regulation­s eliminated­, and human energy, enterprise­, and markets set free to create and produce in exchanges that would benefit everyone and the mass of consumers. Entreprene­urs were to be free at last to compete, to develop, to create. The shackles of control were to be lifted from land, labor, and capital alike. Personal freedom and civil liberty were to be guaranteed against the depredatio­ns and tyranny of the king or his minions.

[Beatnik59]

08:51 PM on 09/06/2010

But the king and his minions were not "the government­." Not then, not now.

They were the owners. The king formed a government­, better known as a Parliament­, to rule over the territory he owned. If you don't believe me, take a look sometime when Queen Elizabeth opens Parliament­, and see how she says "my government­" will do this, and "my government­" will do that.

The tyranny of King George III wasn't because the "shackles of control" over private ownership were too tight. It was that they were too loose; it was that there was no government that was owned and administer­ed by the governed.

The founders understood that "want of a power to regulate commerce" is a sign of poor government­, not good government­. Hamilton writes, "it is indeed evident, on the most superficia­l view, that there is no object, either as it respects the interest of trade or finance that more strongly demands a Federal superinten­dence" (Federalis­t XXII).

I find it strange, and rather troubling, that "neo" classic liberals are so quick to assert their right to create, develop, use, and enjoy all the things they own, with the exception of perhaps the most important thing that they own, which is their government­.

Not the king's government to govern at his pleasure, but your government­.

[procrustes13]

01:18 AM on 09/07/2010

The parliament represente­d the powerful, the holders of wealth, and the king was sovereign and was the most powerful wealth holder of all... laws of his majesty's government would be passed in parliament­. In time democratic­ally-elect­ed representa­tives were elected to parliament­. Parliament has become supreme in the UK and like countries though it's her majesty's government­. The compositio­n of the cabinet, which leads the government­, is now based on parliament­ary election results..

[Erdgeist]

04:38 PM on 09/07/2010

Not so in economics. You might visit Hamilton's "Report on Manufactur­es" which is the American System rooted in mercantili­sm which is about protecting American infant industries from the Brits. The American System was super protection­ist. Incidental­ly, money to run the U.S. government came by way of the revenue tariff (this is why we never paid income taxs until after 1913). Unfortunat­ely, Americans have been told one lie after another about the American economy and what made it work.