Shredding Another Myth About the Left
Recently, I read a blog that described the difference between capitalism and corporatism. The author was absolutely correct on the difference between the two; they are not synonymous and nothing alike in how they function in a market environment. But where the author failed was in saying that “leftists” failed to differentiate between the two and thus hated them both. The implication is that right leaning or GOP voters understand the basic difference between capitalism and corporatism and, thus, make the correct distinctions and decisions.
I disagree regarding his conclusions, both explicit and implied. Below are my counter arguments.
First, it is not true that all people on the left confuse capitalism with corporatism. Some may just as many right leaning voter fail to understand the distinction between the two, but I posit that most left leaning voters do not equate the two. Those on the left with whom I’ve worked in corporate life, including those in management ranks, have a very clear understanding of the two. In truth, one of our main objections to the current capitalistic system practiced in the U.S. is that it has become too corporatist, thereby shutting out or eliminating competition through regulatory or legislative capture or simply the failure of government to prevent monopolies.
Second, those on the left who I know and with whom I have worked (I was a senior director and for many years operated my own business) want more competition in the marketplace to reduce prices as well as the fact that more competition leads to greater innovation. For example, where would the phone industry be now if AT&T had not been broken up in ’74. Would the smartphone exist today? Obviously, it was more than the advancement in chip technology that enabled the development of smartphones. It was competition that opened up that market sector.
Third, we on the left leaning side understand how severely corporatism has harmed small businesses, from the local grocer to a new technology startup, and prevented business creation. When large companies can write the legislative laws and rules that benefit them alone while suppressing new business creation, that is corporatism at its worst; yet, it’s done everyday under as many GOP administrations/Congresses as Democratic ones as a result of lobbying dollars and campaign contributions where quid pro quo is expected and provided.
Fourth, those on the left that I know and with whom I communicate do not have any ill will against those who are wealthy. What we don’t like is a perverted system that privatizes gains while socializing losses. Frankly, most of the people with whom I speak acknowledge the necessity of Bush and Paulson’s TARP program but are very upset that a) senior officials and directors were not fired for allowing such immoral, if not completely illegal, behavior under their watch; b) that the too-big-to-fail banks were not broken up as per the failed Sens. Kaufman-Brown amendment to Dodd-Frank; and c) that no one has been held accountable for their actions when we know absolutely that illegal actions were taken during the mortgage CDO/CDS bubble. We would agree with Simon Johnson.
Fifth, yes, people on the left demand fairness. Fairness as in equity of opportunity, not in equality of outcomes. We’re not that dumb. No two people have the same drive, ability, or interest. But equity of opportunity means that everyone starts out with the same basics of education, nutrition, mentoring and health care so that no one person (or child) starts out from a lower, less advantaged place. Creating that kind of equity has enabled Finland to be among the top five in international test scores whereas the U.S. well down in the middling of the pack.
Sixth, we on the moderate left leaning side believe that when the middle class does well, the entire economy does well and so do the wealthy. There are few rich people, but there are millions of middle income, working class and poor Americans. If each of these lower income millions are offered opportunities to lead relatively stable, economically secure lives wherein their incomes exceed or meet inflation, the probabilities of so-called class warfare – or hatred of the highest income class – would be much less. Yet, because publicly traded businesses, since the late ’70s, have become financialized (moved from being primarily customer focused to being primarily focused on increased shareholder value as noted recently by former Citicorp CEO Jon Reed), the value of employees and the commons has decreased. Now, we have an entire segment of society that is so wealthy that they no longer identify with the country or the commons or the commonweal. As in 18th Century France or 21st Century Tunesia, that scenario is not healthy for society or for a stable economy.
So, when people rail against the left for being anti-business or not understanding business or the economy, they should seek to review their own preconceptions – preconceptions that have been spoon fed to them by a very dominant GOP think tank and media movement.
If anything, left leaning moderates have more in common with libertarians than do hard core Republicans when it comes to business and even social safety nets per the writings of Friedrich Heyek.