There is good capitalism and then there is bad capitalism. Good capitalism is socially responsible. It serves and benefits society at large. Bad capitalism is the corpocracy's socially irresponsible economic policies and practices that benefit only itself and was largely responsible for the 2nd Great Depression, or Economic Katrina that began a few years ago and is still taking its toll on us. The modern version of bad capitalism in
In moving toward socially responsible capitalism, nine characteristics of bad capitalism need to be recognized and eliminated: 1) free market ideology; 2) fear mongering over national debt; 3) privatization; 4) economic disparities and poverty; 5) shut-out capitalists; 6) financial speculation; 7) exploitative globalization; 8) unsustainable development; and 9) elitist pay without performance.
Because bad capitalism is so enter twined with it, the rest of the corpocracy will also need to be eliminated and that requires a host of sweeping political, legislative and judicial reforms, not just economic reforms per se (I have already given an overview of all the reforms needed in my article about Powell's legacy). The intent of the present article, therefore, is just to discuss very briefly each of the nine bad characteristics and also needed changes that would add up to the kind of capitalism we deserve to have and must have.
In discussing the changes needed I will occasionally refer to a nationwide taskforce on economic reform. It doesn't yet exist, but let's assume it has been commissioned by some nongovernmental group and charged with polling the opinions of middle class Americans, the socioeconomic group absolutely essential to any true democracy and viable economy, and then melding the solicited public opinion with the taskforce's a) consideration of new ways of thinking about capitalism; b) enunciation of a proposed new national economic policy; c) design of a socially responsible form of capitalism that has none of the nine bad characteristics; d) proposed objectives and initiatives to implement the design; and e) report on the findings and recommendations to the administration, to the Congress, and to the American people.
There would be no economists on the taskforce who were blindsided by Economic Katrina that swamped
1. Free Market Ideology
Adam Smith's espousal of a free market has been far overblown. The putative "father of capitalism" made only a passing reference to "the invisible hand" in his Wealth of Nations and never once in it used the term "capitalism." A moral philosopher, he understood the importance of morality, which he believed was manifested in a person's sympathy for others. He would have recoiled at the very idea of the corpocracy and its capitalism, for he thought the emerging corporations of his time posed threats to society If only that prescient man along with Aristotle could join the taskforce!
The proof is already in the flattened pudding, flattened by Economic Katrina, that free-market theory is utterly unworkable, destructive, and a hypocritical ploy by the corpocracy. The so-called Chicago School of Economics, where Friedman once held forth, is hugely responsible for touting the virtues of the free-market. And it is especially noteworthy and satisfying to learn that another influential member of that camp, lawyer and economics writer Judge Richard A. Posner, has since turned heretic and is now debunking the free-market ideology. He ought to be the honorary chair of the taskforce, and it should include in its proposed national economic policy a debunking of free-market theory! The policy also needs to delineate government's proper obligations and role both in society and in its market place so as to strike a balance between total government rule on the one hand and total market rule on the other. This policy would do well to reflect Abraham Lincoln's view that the proper role of government "is to do for a community of people, whatever they need to have done, but can not do at all, or can not so well do, for themselves-in their separate and individual capacities."