When people criticize or lionize "capitalism," what do they mean? Please select your preferred version — or least objectionable — and stay for the haiku.
May Day will bring big marches to blue cities such as Seattle, no matter that Red America has had much more success in the elections that actually make policy. Maybe you’ll be protesting. I’ll be working (“for The Man”). Fundamentally, the demonstrations raise questions about capitalism and whether it is equitable.
But what do we mean when we say “capitalism”? Here are some versions:
• Mid-century American capitalism: A mixed economy with strong private enterprise spread among many small- and medium-sized firms across the country, lots of competition, ease of starting companies and a focus on productive, job-creating enterprises. This coexisted with major manufacturing sectors, such as steel and automobiles. It also provided a strong public sector, with effective regulation, antitrust enforcement and public investments, as well as progressive taxation and robust unions. This was America from 1940 to 1980.
• Reaganomics: Tax cuts, especially for the wealthy; merger mania creating many giant firms and cartels with enormous market power; financialization of the economy with much influence moving to Wall Street and big banks; globalization; less power for workers with the “Wal-Mart business model” but often cheaper prices; less government involvement in regulating for the public good, and much less public investment. The Trump administration wants to embark on Reaganomics 2.0 with nationalist rhetoric.
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• Obamanomics: Believing it’s impossible to put the toothpaste back in the tube and return to mid-century capitalism, this version attempts to provide better regulation and consumer protection; trade deals that expand exports but better protect workers and the environment; market-based healthcare for those who need it, and antitrust enforcement to prevent the most egregious anti-competitive mergers. Tax rates go up slightly on the rich. In theory, at least, it supports making unionization easier.
• Social democracy: Seen in much of Europe, this mixes a market-based economy with much stronger welfare state than seen in the United States. Taxes are high but people get in return such benefits as universal healthcare, free or inexpensive college educations, a strong social-safety net and advanced public investments, including a continent-spanning network of high-speed trains. Business regulation is stronger, as is unionization. Military spending is much lower.
I leave out China’s state capitalism, which isn’t appropriate for a democracy. And real communism failed, causing the murder and suffering of millions in the 20th century in the Soviet Union and Mao’s China. Like it or not, there is no alternative to capitalism — but which kind?
Today’s Econ Haiku:
Mayor’s soda tax
Will it make you healthier
Or your job go flat?