Capitalism for All

Imagine you have a pile of money, and you’d like to have a bigger pile. You learn that the Widget Company has invented a better widget, so you buy shares of Widget stock. The company uses the capital you’ve invested to produce the new widgets. They sell like hot cakes, so more workers are hired, profits roll in, and the value of the stock you own rises. You and the company are richer, more people have jobs, and consumers have better widgets. This is capitalism in action, and so far, so good.

Now imagine that because you’re a big investor who knows how to make a buck, you’re elected to the Widget Company board. You now have a voice in decisions including what to do with the company’s growing profits. Raise your workers’ pay? Upgrade your factory with better machinery? Buy out a competitor so your company will have more of the market? Give larger dividends to investors, including yourself? These are tough decisions, but that’s why you and the company executives make the big bucks.

What to do? You’re a capitalist, after all, so you naturally believe that investors who’ve risked their capital on the company are entitled to first dibs on the profits. They, and you, are in it for the money, so stock dividends and high share prices are top priorities. 

To keep investors happy, you think about how to increase company profits by reducing costs and/or increasing productivity. How about automation? Robots are expensive, but they’ll never want raises, never organize a union to get them (except in science fiction when robots finally become smart enough), and can work 24/7 without tiring. Automation is often a no-brainer.

Other ways to reduce costs include avoiding those tiresome government regulations that require your factory to not foul the air and water and to be a safe workplace for employees, and to avoid taxes in every legal way possible. To dodge these obligations, the company pays lobbyists and contributes to politicians who favor deregulation, restrictions on unions, and lower corporate taxes (and, not coincidentally, lower taxes on wealthy people like yourself). 

Now, forget your imaginary pile of money and consider where capitalism has taken us in this tale. It’s no longer “so far, so good.” It’s too far and too bad for workers who get last dibs on company profits and for all taxpayers who have to make up for what corporations and the rich don’t pay (and some pay no income taxes at all).

Perhaps worse in the long run, the conservative Supreme Court ruled, in 2010, that, as Mitt Romney put it, “corporations are people” entitled to make unlimited political contributions. This gives the small corporate class enormous political clout. It’s extreme capitalism—a beautiful system if you’re one of those few but a deck stacked against you if you aren’t. 

Capitalism is a great engine of prosperity, but without strict regulation and a progressive tax structure, it’s an engine with no train. People who help make the everyday economy work—nurses, truckers, teachers, builders—are left at the station. A healthy economy is a balancing act between private profits and the public good. Today, our economy is unbalanced and unhealthy.

Here’s the cure: We want wealth to flow to the many, not just to the few, so channel excessive wealth to essential public services like education, healthcare, and infrastructure. That’s how we created Social Security, public schools, Medicare, and the original G.I. Bill. It’s how we can provide affordable college/tech schools and universal healthcare. Also, ensure workers have a level playing field by protecting their right to organize and to have significant representation on corporate boards as many other rich capitalist countries do. 

The greedy will no doubt call this cure—or any cure—“socialism.” I call it having a social conscience. It’s capitalism that works for We the People.