Social Capitalism is more interested in the survival and prosperity of a business five, ten, or fifteen years down the road, than it is in squeezing an extra dollar per dividend share out of the next quarter. This is best done by dealing fairly with the business' workforce, customers, shareholders, and community. It is not done by driving down wages and benefits, providing your customer with an inferior product, leveraging your stock to buy up competitors, or blackmailing your community to provide you with tax breaks, loans, and beneficial changes in its laws, and then moving when someone gives you a better offer.
Social Capitalism recognizes that only through the production of actual physical products can a nation in the long term remain economically vital, and have a workforce that is capable of purchasing the items the nation produces. The end of the production of material items in favor of the sale and purchase of paper instruments, spelled the beginning of the end for Spain, Holland, and Great Britain as major powers. Vladimir Ilyich Lenin may have been a totalitarian bastard, but he was no fool.
Social Capitalism understands the need for a system of legal checks and balances in every large scale human endeavor. The people who say "we don't need regulation," or "the market will regulate itself," are the same people Mario Puzo was writing about in The Godfather, when he stated, "A man with a briefcase can steal more in an hour than a man with a gun can steal in a lifetime." The only people who don't want cops around are the ones who want to do something they know is wrong without any consequences. To paraphrase James Madison in The Federalist Papers No. 47, "If men were angels, we would need no laws." As the examples of Enron, Goldman-Sachs, Bernie Madoff and so many others have proven over the last ten years, we are not angels, and Adam Smith's metaphorical "invisible hand" is simply not enough to ensure fairness or justice for all in the financial markets.
Social Capitalism believes in the profit motive, and encourages every business to maximize its profits through superior products, production values, customer service, worker participation, and innovation at every level. However, Social Capitalism does not believe in profiteering, which it defines as the exploitation of human suffering, or social, political, or economic disruptions of the fabric of society, for the benefit of the business, especially in time of war or other emergencies.
Social Capitalism does not condone expediency; it believes in always trying to provide the most equitable solution for all concerned. Expediency invariably leads to unfairness, which eventually becomes institutionalized. By its nature, Social Capitalism demands that all decisions that effect the members of the community be applied equally, but always with the forethought and consideration that we wish to see applied to ourselves.
Social Capitalism recognizes that there are certain societal related business functions which government, by its nature, is better suited to perform than private business. Further, that generally when governments have failed in these functions in the past, it is because of obstruction by those in government who have a vested interest in government not succeeding, usually for ideological or financial reasons, or both.
Finally, Social Capitalism believes in progressive taxation at every level practicable. As President Theodore Roosevelt said (and I am paraphrasing here)those who can best afford to pay the most taxes, are the ones who should pay taxes the most. There is another side to this argument as well: if the wealthy are left with too much hereditary wealth, they will use that wealth to attempt to subvert a constitutional republic and make it into an oligarchy. This happened in Athens, Rome, Holland, and I believe, right now in the United States of America.
Can Social Capitalism work? Franklin Roosevelt's New Deal, a bare bones version of it, worked for thirty-five years until Ronald Reagan began dismantling it. An upgrade of the system, Lyndon Johnson's Great Society, effectively halved the poverty rate in America in less than ten years with programs like Medicare, Medicaid, VISTA, WIC, Food Stamps, Student Loans, etc. Once again, it was torn apart and poverty began to rise under Ronald Reagan and his GOP successors. And the Scandinavian countries, who have gone far past Social Capitalism into a more socialist model, are generally ranked among the happiest people on Earth.
I am certain that I am forgetting or leaving out large pieces that are needed for a complete, working system, but that is all I have time for now. I welcome my reader's comments as always.
