It’s not a novel concept to compare America to Rome, nor is it to see connections between an ailing, sclerotic, corrupt Roman Empire and our own republic. One thing they share is moral decay, foolish financial/military policies, and perhaps above all, political corruption.
I am talking about the effect of money on governance. In modern parlance, crony capitalism. It is a thorn in America’s side because it hampers a democratic and horizontal diffusion of capital and resources amongst the tens of millions of small businesses.
Worse than unregulated capitalism, crony capitalism claws at the beliefs that America is the land of opportunity and that we’re all in this together, making them myth. Indeed, as the estimable Nobel laureate Joseph Stiglitz maintains:
“One of the darkest sides to the market economy that came to light was the large and growing inequality that has left the American social fabric, and the country’s economic stability, fraying at the edges: the rich are getting richer while the rest were facing hardships that seemed inconsonant with the American dream.”
Was not America founded on antipathy toward corruption? Alison Acosta Winters writes on The American Conservative:
“We remember from history, of course, that the colonists protested British taxation for years. But most Americans don’t remember that the Boston Harbor event was actually a protest over a large tax cut. That tax cut affected one company alone: the East India Company, or EIC, which was given dispensation from all taxes on tea it imported into the colonies. This allowed the EIC to undercut prices and guaranteed it a virtual monopoly, putting other importers and American tea merchants at a distinct disadvantage. Corporate welfare was at the heart of this tax cut.”
The enterprises of the country are aggregating vast corporate combinations of unexampled capital, boldly marching, not for economic conquests only, but for political power.
Interestingly, Winters doesn’t note that Americans are suspicious and angry about Russian meddling in American elections — or even that Russia catapulted Trump (with the help of the oligarchic Electoral College) into the presidency itself. She does, fairly I suppose, point out that “Just last year, presidential candidate Donald Trump hit a nerve when he declared that our system is rigged. Trump became president at least in part because that theme resonated with many Americans who felt left behind in a system that favors Elon Musk’s vast empire, extends favorable financing from the Export-Import Bank to Boeing and other multinational corporations, and distributes green energy subsidies to well-connected concerns such as Solyndra.” What can I say, it’s The American Conservative…
But here is something she writes that we all can agree on: “Many Americans correctly feel they are living in a two-tiered society in which the wealthy and well-connected are awarded success at the expense of everyone else.”
As one can read from The Heritage Foundation website, crony capitalism is a phenomenon both sides of the political aisle can see eye-to-eye about. I think for conservatives the flavor is a bit more in the vein of “Let’s keep government out of the free market”, whereas liberals would probably be inclined to endorse this statement: “We need government to stop tinkering with capitalism and simply regulate it like is done in many European/Scandinavian countries and Australia/New Zealand.”
For example, Lauren Brubaker, in the above article, notes that crony capitalism is detrimental and that we must begin urgently “(1) limiting government to a few essential powers (defense, administration of impartial justice, and certain limited public works and institutions); and (2) educating the public concerning the ‘folly’ of attempts to direct the economy by legislators.” That is a disconnect for me, and for liberal economists. To wit:
Advocates love to call it free trade, but what they really mean is freedom for global corporations, but suppression of the freedoms for communities or nations to regulate or otherwise maintain primary values such as the environment, health, culture, jobs, national sovereignty — and democracy.
I would like to draw in a few proponents from the left side of the political spectrum to decry crony capitalism. Doing so will round out the conservative argument that capitalism needs to be unfettered so that it can fly, bringing millions of able-bodied, rational actors with it. Indeed, this essay isn’t a paean to a “hands-off” relationship between government and business, and both unregulated capitalism and crony capitalism will be taken to task.
Though a laissez-faire system would probably be better than what we have, I think we can do better than to encourage “survival of the fittest” and “every man for himself.” We need something akin to democratic socialism and a true progressive era in modern America.
Kimberly Amadeo: “[Philosopher and author Ayn] Rand said that capitalism had its own morality that should be protected. It allows each person to reach their full potential. She agreed with the Founding Fathers that each person has a right to life, liberty, property and the pursuit of happiness. They do not have an inalienable right to a job, health care, or education. Rand’s philosophy ignores that emotion, not rational facts, rules most people’s decisions. It overlooks the advantage rich children have when competing with poor ones. Those born into poverty don’t have the opportunities to reach their potential. They don’t start on a level playing field.”
As long as our government is administered for the good of the people, and is regulated by their will; as long as it secures to us the rights of persons and of property, liberty of conscience and of the press, it will be worth defending.
“In 2009, during the depths of the Recession, the seven highest-paid hedge fund managers were taking in more than a billion dollars each. Remember, government sets the rules by which the market functions. We deregulated Wall Street, allowing it to engage in more and more excessive behavior,” economist par excellence Robert S. Reich noted in his book Saving Capitalism. Though he is on the political left, he wrote a book of that title because he knows that capitalism is the ouroboros that is eating itself, and needs to be tempered (to mix metaphors) by a progressive and active oversight by the people (in the form of elected officials).
When Microsoft moves to shut down hacking sites run by Russian intelligence operatives and the Republican in the White House yawns, you know we are living in Orwellian times.
It’s true that Donald Trump is worse than Nixon or Bush (or Clinton, even), but it’s not just Trumpism that marks the present time as one of moral decay, rampant corruption, social unrest, political dysfunction, hyperpartisanship, and gross income inequality. If the East India Company’s sweet deal by the Crown enraged American colonists, 250 years later we are still pissed off when democracy is subverted by politicians getting their palms greased by moneyed interests. If love of money is the root of all evil, my friends, we are languishing in the midst of evil.
What we now have often involves the worst of both corporate capitalism and state socialism. Despite some undeniable gains, the corporate foundation, complexity, and bureaucratic irrationality of our current healthcare system, for instance, should be countered by the simplicity of a single-payer system (or even the provision of medical care directly as a public service without a layer of insurance that adds extra costs and complications).
Though crony capitalism is about as bad as an economic system gets (it is essentially akin to fascism), progressives wouldn’t stop with the elimination (diminution?) of it; we believe that the “system” can be reformed beyond pure capitalism into something more progressive, humane, democratic, sustainable, or even, Christian.
Though lefties don’t often strike the Christian chord, the big-hearted Marian Wright Edelman puts it this way: “My faith has been the driving thing of my life. I think it is important that people who are perceived as liberals not be afraid of talking about moral and community values.”
Further, “We are learning once more – as leaders like Teddy Roosevelt learned a century ago – that our noblest aspirations for America cannot be realized when we allow economic competition to grow too harsh” (
Liberals do not see capitalism as the white knight, but the thief in the night. Under it as an economic system, some will turn out spectacularly good (the Jeff Bezoses of the world) and others will suffer a gruesome existence (the handicapped old single ladies of the world). Indeed:
“…massive poverty in the modern sense appeared only when the spread of the market economy broke down community ties and deprived millions of people access to land, water, and other resources. With the consolidation of capitalism, systemic pauperization became inevitable.”
In fact, a person can work very hard in an austerely capitalistic system and still not “get ahead” or even subsist. Do you know how egregiously many people work in the current system and cannot make ends meet? This is not because of the elements of crony capitalism that we all can decry, it is part and parcel of a system of unregulated capitalism. I’m afraid we have a hybrid between crony capitalism, free-market capitalism, and a social-welfare system. As one can see from the healthcare debacle, we’re not doing much of all right. This class of person is not unlike Sisyphus being damned to roll a rock up a hill every day, only to be condemned by the gods to begin anew the next day, for eternity. We call that class of American the working poor.
Here is a telling snippet of a sad but awesome tale told by Barbara Ehrenreich in her muckraking book Nickel and Dimed, in which she put down her pen, left her Ph.D. behind, and attempted to survive on what she could make working minimum wage jobs at Walmart, at a diner, as a housecleaner, etc. Spoiler alert: it isn’t a happy ending.
“So the problem goes beyond my personal failings and miscalculations. Something is wrong, very wrong, when a single person in good health, a person who in addition possesses a working car, can barely support herself by the sweat of her brow. You don’t need a degree in economics to see that wages are too low and rents too high.” ~ Barbara Ehrenreich
Bill Maher asked me on his show last week if America is still a great nation. I should have said it’s the greatest show on earth. Forget what you learned in civics about the Founding Fathers — we’re the children of Barnum and Bailey, our founding con men.
I don’t want to lose the forest for the trees, and often my writing becomes a semi-stream-of-consciousness affair. So to sum up:
- America is languishing
- Our system is a gross mix of three incompatible economic philosophies
- Conservatives hate crony capitalism (to a large extent) and the welfare state (again, to a large extent, but not the same conservatives), and fiscal liberals disdain both types of capitalism (by and large).
- European and Scandinavian social democracies create happier, healthier, more productive citizens.
“Here’s a headline from the Financial Times, April 4: 2011: ‘German Spirits Rise Sky-High as Industry Soars.’ Even some of our right-of-center types have observed that a high-tax social democracy seems to be outcompeting us. (I could mention New York Times columnist David Brooks as one of several examples).” ~ Thomas Geoghegan
I will offer a few more quotes about crony capitalism. You are also invited to listen to two podcasts on topics such as progressive economics, fiscal liberalism, America beyond capitalism, economic reform, and crony capitalism.
One of the important lessons of history is that those who own, rule. Even in titular democracies, the powers of ownership gradually trump the power of the ballot and play an often decisive role in shaping cultural values. For these reasons, growing living economies that democratize economic relationships in the deepest sense is a leading edge of the work….
If the goal of health care reform is to provide comprehensive, universal health care in a cost-effective way, the only honest approach is a single-payer approach.
What is new in our time in history is that the traditional compromise positions – namely progressive, social democratic, or liberal politics – have lost their capacity to offset such power even in the modest ways the American welfare state once did. At its heart, the Pluralist Commonwealth is a way to think about a different system for the ownership of the economic institutions underlying our society, one which is constructed to secure far better outcomes than seem possible in a system characterized and determined by increasingly concentrated private wealth.
Dare to be wise! Begin!
The man who would reform, but hesitates, is kin
Unto the boor who waits until the stream is gone;
But ever flows the stream, and ever will it flow on.
Compared with the social democracies of Europe, the American welfare state draws less on notions of communal obligation and social solidarity and more on notions of individual rights. Given the individualism of American local culture, this may have been the only way to win broad support for the public provision of basic human goods.
We need campaign-finance reform. It’s the precondition to restoring democracy in America. …If we truly want to take the power to influence elections away from corporations and give it back to ordinary Americans, we have to stop the corporations from being essential to politicians’ campaigns. That means some sort of public financing for campaigns.
Without a populist challenge to corporate profiteering, what’s left is either a bloodless debate about ‘cost containment’ or a rightwing debate about ‘big government.’ Neither mobilizes the public toward progressive change. Recent U.S. history shows that you can’t serve corporate interests at the same time you’re seeking reform – of healthcare or Wall Street or any other sector. Not when big corporations are the problem – and the major obstacles to change.
To the extent that the present economic order has anything humane and civil about it, it is because millions of people struggled to advance their living standard and their rights as citizens. It is somewhat ironic to credit capitalism with the genius of gradual reform when most reforms through history have been vehemently and sometimes violently resisted by the capitalist class and were won only after prolonged and bitter contest.
There’s no ‘small-government solution’ for globalization. There’s no small-government solution for force-five hurricanes. There’s no small-government solution to the healthcare crisis. There’s no small-government solution to economic inequality.
The most spectacular feature of the 2016 elections was not the election of a billionaire who spent almost as much as his lavishly-funded opponent and enjoyed fervent media backing. Far more striking was the remarkable success of the Sanders campaign, breaking with over a century of mostly bought elections. The campaign relied on small contributions and had no media support, to put it mildly. Though lacking any of the trappings that yield electoral success in our semi-plutocracy, Sanders probably would have won the Democratic Party nomination, perhaps the presidency, if it hadn’t been for the machinations of party managers. His popularity undimmed, he is now a leading voice for progressive measures and is amassing considerable support for his moderate social democratic proposals, reminiscent of the New Deal – proposals that would not have surprised President Eisenhower, but are considered practically revolutionary today as both parties have shifted well to the right [with] Republicans virtually off the spectrum of normal parliamentary politics. ~ Noam Chomsky