Let’s Keep Capitalism In Economics, Where It Belongs

It was about eight years ago, as a college student recently made aware of a world beyond soccer, parties, and beer, that I first beheld a global society beset by humanitarian crises. There were outrageously high drug prices in the United States, countries torn asunder by American-backed coups, and, worst of all, climate change, that leviathan of impending doom. With only a touch of reductionism, I attributed all these calamities to a single cause: capitalism.

I wasn’t entirely wrong. It really was the profit-maximizing of pharmaceutical companies that caused exorbitant drug prices, the avarice of greedy capitalists that convinced American politicians to foment war in foreign lands, and self-interested fossil fuel executives who lobbied against climate measures. But while I was right in condemning these instances of free market fundamentalism run amok, I remained blind to the innumerable ways that capitalism has decreased human suffering.

Now I know better. In 1900, global life expectancy was 32 years. The vast majority of the global population eked out an existence in extreme poverty, making less than $1.90 a day (in today’s dollars). Now, global life expectancy has risen to over 71 years, and only 9.2 percent of the world’s people live in extreme poverty. Those numbers represent major improvements in quality of life for people around the world. There are of course multiple reasons for these improved conditions, from technological advances to the abatement of colonialism in its most brutal form, but it stands to reason that capitalism, the economic system underlying the modern world, is largely responsible.

A bit of further analysis confirms this theory. Since the Industrial Revolution, free market capitalism has accompanied a period of economic growth on a scale hitherto unimaginable. With more money to go around, people were able to lift themselves out of poverty and into the growing middle class. All of this has given more people access to the medical care and nutritious foods that significantly improve their well-being.

So when it comes to capitalism, we have to contend with that most complicated (and most common) reality: a system that is neither entirely good nor entirely bad. With its harnessing of naked self-interest and unshackling of the free market, it creates some opportunities while eliminating others. It unleashes human potential while creating societal ills. It lifts humanity up while threatening its destruction. And in general, the worse problems arise when its ethos slip out from its economic abodes to define society as a whole.

The United States has been largely defined by two systems operating concurrently, winding around each other with snapping jaws like a pair of cannibalistic snakes. Capitalism is our economic system, by which we organize the exchange of goods and services (and, of course, money). Democracy (or republicanism, if you prefer) is our political system, by which we allot power and govern ourselves. Both systems attempt to infringe on the territory of the other, with capitalists using their money to influence policy and politicians using their power to regulate the market. Thus, the two snakes take turns snapping at the neck of the other. The problem is that capitalism has clasped democracy firmly in its jaws with no intention of letting go.

Capitalism, left to its own devices and unhindered by other humanist proclivities, functions according to self-interest. Neoclassical economic theorists, among the main proponents of free market fundamentalism, assume that individuals are rational actors, pursuing at every turn whatever is materially best for them. Consumers buy the product with the most value, workers take the job with the best wages, and CEOs do whatever they can to boost profits for shareholders, social consequences be damned. It’s hardly a surprise that the people operating within this system have taken its central maxims to heart and then applied them ruthlessly to the political system that would fain constrain them. By funding campaigns and lobbying politicians, capitalists use their money to distort and overpower American democracy, turning it into just one more lever to pull in the pursuit of their financial interests. This has created a United States that, according to a recent Princeton study, is more an oligarchy than a true republic.

Once the capitalists have purchased their influence, they use it to force free market fundamentalism into every corner of American life. They lobby for lower tax rates, fight minimum wage hikes, and advocate against any regulations that aim to serve a social good. Far too often, their efforts prove successful.

We’ve recently seen in Texas a classic example of free market fundamentalism gone bad. For years, oil companies have successfully lobbied state politicians to leave the energy market deregulated. With no government mandate to properly weatherize the power grid, companies left their infrastructure vulnerable. Why not, since they could cut costs while taking on none of the risk? When a rare deep freeze shocked the Lone Star State, millions were left without power. At least 70 people died, countless were taken ill, and people who kept electricity saw their prices skyrocket thanks to those trusty old laws of supply and demand. The market did its thing, and the people suffered. This is what happens when capitalism subsumes democracy.

A certain amount of government intervention is necessary for all citizens to reap the benefits of general economic growth. A democratic state, acting in the interests of its citizens and with the economy firmly under its control, can allocate resources and connect the fruits of the free market with the people who are missing out. This is the situation in which everybody truly wins. Unfortunately, it won’t happen as long as the economy drives the political system, and not the other way around.

We need to extricate our democracy from the jaws of capitalism. We do this by focusing primarily on power. Why is it that certain elites have so much of it? How do we take it back? The answers to these questions lie in common sense reforms. It turns out a veritable revolution is only a few votes away.

First things first, we must get the money out of politics. The Supreme Court didn’t help the situation by establishing that political donations constitute protected free speech, but Congress can still undercut the ruling with legislative solutions. Lobbying, that insidious practice by which political insiders push their legislator buddies to do the bidding of their billionaire overlords, needs to be restrained. Politicians should spend less time begging for contributions and more time governing. Pay-to-play, both overt and covert in nature, must be banned. We might not be able to end corruption altogether, but we could start by making it illegal.

Enough of letting capitalism hold our democracy hostage. Enough of letting the self-interest motive permeate every aspect of public life. If our society is to function properly and if public disasters like climate catastrophe are to be avoided, then it’s the democratic snake that needs to swallow its capitalist opponent. It’s on us to aid it in the fight.