Friday, February 6, 2009


No One Wins Unless Everyone Wins

Some people believe Karl Marx had an altogether dim view of capitalism. In fact, Marx, in his writings repeatedly noted the productive capabilities of free market systems. However, he also made it clear that due to its very nature, capitalism must also go through periodic moments of depression and unemployment. Thus, like cocaine, capitalism can and does produce a kind of temporary economic euphoria that is at some point, followed by periods of hopelessness and despair. I have heard so-called financial experts (one wonders if there are any left) preach that “downturns” in the economy are good for society, because like brush fires in heavily wooded forests, they get rid of the unproductive underbrush that can stifle future growth.

However, human beings are not trees. Our species needs to routinely eat, drink and find shelter to survive. In 1931, the United States was a country of 130 million people. During that year it is estimated that close to 60 million of its citizens were without food, shelter or any kind of work to provide them the essentials needed to live a decent life. During the Great Depression people did not keep rabbits as pets, they ate them to survive. But despite its massive failures during the 1930’s, capitalism in the United States survived due largely to Franklin Roosevelt talent for tempering the harsh aspects of the system with a wide range of reforms, most of which, thank God, are still with us today.

In doing so FDR proved that Marx was right about the problems posed by capitalism but not so right about the solutions. To Marx, the end game of capitalism was revolution. To FDR, the goal was to redistribute wealth to those who needed it until the system could recover. For this, Franklin D. was labeled by the delusional reactionary nut jobs of the time as a “socialist.” Since that time the right wing elements of both political parties have consistently applied the label to any proposal that helps the majority of our nation’s citizens. Since, 1932 the right has been against the following proposals, Social Security, Medicare, the GI Bill, college loans, and most recently healthcare for sick children. Their reasoning was that implementing the aforementioned would change the United States into a, God forbid, SOCIALIST NATION!

Even with the incredible success of the aforementioned programs many of our nation’s citizens still believe that they live in an America where proud rugged individualists live at their own peril and scoff at the notion that “markets need to serve the interests of the economy and society and not the other way around.” But the fact is that the events of last month provide clear and compelling evidence that the America of Ronald Reagan and the right is but a long gone figment of their collective conservative imaginations.

In an all too short span of time, the US government has had to take control of the financial markets, the mortgage markets, the real estate markets, and the banking system. All of the previously mentioned entities were broke or headed that way. Now, we could have done what Herbert Hoover did in 1931 and try to make the case that helping people to deal with the effects of the downturn would only make things worse. Like Hoover, George Bush wants desperately to pretend that nothing has changed. With this in mind he was silly enough to tell people that “the government's role in this crisis will be limited and temporary.” In the end even he was smart enough to understand that Uncle Sam was the only one with deep enough pockets to ride to the rescue.

But let’s get back to the limited and temporary part, 700 billion for bad mortgages, 80 billion for AIG, 250 billion for the banking system etc, etc. That comes to over a trillion bucks. That hardly seems limited and temporary to me. In a capitalist society the aforementioned companies would have been allowed to fail. Instead we used tax payer money to save them, and anyway you cut it my friends bailing out failed businesses to prevent bad things from happening is pure 100 percent unadulterated socialism.

Many of the readers of this column will be insulted by its premise. They will exclaim, “I don’t want to be a socialist, I want the system to survive just the way it is so that I too can someday make a killing by cheating someone out of their life savings.” But the fact is that it is too late. To paraphrase Ronald Reagan, Government is no longer the solution or the problem it is, quite frankly, all that we have left.

But take heart, I can tell you that socialism is not all that bad. France, Germany, Switzerland, Finland Ireland, Italy et al, are all socialist nations. The citizens of those countries live longer, have healthier lives, get longer vacations and if the surveys are to be believed are far happier than the average American. They also get to ride to work on modern transportation systems, and have excellent healthcare systems. In addition they realize much better than we do that markets are not self-correcting and that often times collective action is required to put them back into working order. The aforementioned nations are far from utopian. Life is tough everywhere. The question is where should people turn when the economy bottoms out? We now know that the answer is definitely not Wall Street.

So it is time to dispense with the pretense that pure capitalism works. It clearly does not. In fact as we have seen all too well, the unbridled pursuit of profit at the cost of everything else is a recipe for disaster. We need to begin to understand that, as Bruce Springsteen likes to say at his concerts, “No one wins unless everyone wins.” Welcome my friends to the Socialist States of America. I am glad to be here, I hope you are as well.

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