We need a better way of thinking and talking about the kind of economy that works for people. We have to ask the questions: What does a good economy do, and whom does a good economy serve? Capitalism and socialism both offer complex answers to these questions. But both are being used in our contemporary political discourse in ways that are not helping us to answer them.
“Socialism” is a loaded term these days. With the U.S. House flipping, some emerging politicians on the left are using this term to describe their own positions. Politicians and commentators on the right, in the meantime, have latched onto the strategy of invoking the idea of socialism whenever they want to demonize, as the opposite of freedom, any kind of government intervention into economic life. Any policy or process that governments might develop to constrain the ill effects of capitalist enterprise is labeled as “socialist.” On the other hand, politicians on the left are increasingly using the term “capitalist” to mean anything that looks to them like corporate greed and exploitation. So, you can be a greedy capitalist or a tyrannical socialist, but you can’t be anything else. We need to find more nuanced ways of talking about our economic life.
Capitalism is founded upon an ethic of creativity that encourages invention and innovation. Capitalism can also produce an ethic of exploitation. When capitalist enterprise creates value for owners and consumers, rather than workers and communities, more often than not, it generates efficiencies, making what we already have cheaper for consumers who have the resources to purchase them. But this means that workers, families, the poor and vulnerable all lose as jobs are moved overseas, communities suffer divestment and goods that everyone needs to flourish — education, health care and municipal services — become increasingly available only to those who have the means to acquire them.
Socialism, on the other hand, is rooted in an ethic of equality that looks to government intervention to curb the excesses of economic production. Socialism recognizes that free markets, left to their own designs, do not sufficiently address human needs. But socialist approaches to redistribution can be inefficient and can curb individual freedom.
Critics of socialism argue that the U.S. economy isn’t capitalist enough. But our economy, compared to our peers worldwide, is primarily organized around capitalist structures with relatively little government oversight. As citizens we must ask: how is that working for us?
In North Carolina, the minimum wage remains at a stark $7.25, one-third the cost of living necessary to keep pace with the arc of inflation. When someone tells us that they are working three jobs to make ends meet, this is not a metaphor. The working poor and shrinking middle class are falling into ever-deepening levels of despair and self-worthlessness. Every day we hear about the growing numbers of those touched by the opioid crisis, mass incarceration, mass shootings, the resurgence of hate groups, the increases in gambling and spending, and those who commit suicide when the fantasy of an “all-in” solution fails. These are economic concerns as much as they are social ones.
In a system that raises its children to shoot for the stars, young people acquire astronomical educational debt without employment opportunities when they graduate. Others experience health care deductibles rising to the point where even those who have health insurance cannot afford to use it. Our planet continues to be pillaged for profit without conscience, regardless of code-red warnings from environmental scientists. We, the people, lose our voice as political leaders sell out to “too-big-to-fail” corporate entities. Our weary bones know all too well the betrayals of a rigged system that unapologetically lies to protect and enhance its power.
Perhaps capitalism has been the best model for the historical middle class, but let’s not be ignorant and pretend that it doesn’t have its flaws — especially when the values that have sustained capitalism are no longer being practiced for the benefit of those who are the bulwark of a capitalist democracy.
An economy bears good fruit when its citizens’ needs are met through systems that are creative, innovative and equitable. We can move forward if we are willing to be critical about corporate capitalism, demand that the wealthy pay their fair share, and remain open to grass-roots solutions. Perhaps getting there hinges, first and foremost, on opening the closed doors of our minds — whether discussing capitalism, socialism or other options — instead of simply dismissing them as caricatures. That won’t help anyone in the real world.