Hypocritical Capitalism

Can We See It?

Many in the West defend “free markets,” asserting that unfettered competition produces goods and services most efficiently. But how true is it that our markets are free? And how efficient?

When capitalism takes its own picture, it inevitably smooth’s over the blemishes, like the rest of us, and hides as many of the scars as possible. As Joseph Stiglitz, the Nobel Prize winning economist put it recently: our “bankers, among the strongest advocates of laissez-faire economics, were only too willing to accept hundreds of billions of dollars from the government in the bailouts that have been a recurring feature of the global economy since the beginning of the Thatcher-Reagan era of ‘free’ markets and deregulation.”

And, then, our politics, overrun my money, compounds the problem. He provides these examples: “Congress maintains subsidies for rich farmers as we cut back on nutritional support for the needy. Drug companies have been given hundreds of billions of dollars as we limit Medicaid benefits. The banks that brought on the global financial crisis got billions while a pittance went to the homeowners and victims of the same banks’ predatory lending practices.”

“Economic inequality translates into political inequality, and political inequality yields increasing economic inequality.”

This isn’t a radical speaking or a socialist – though it can sound that way. A mainstream, respected economist, Stiglitz, is speaking facts that are all in the public record.

If we lift our eyes above our own horizon and take in China and Greece, we can see our past mistakes revived. In love with the dynamics of capitalism and its power, China converted to a market economy. And, just as capitalism provided an immense surge of productivity and wealth for the west in the nineteenth century, so did China benefit from growth and increasing prosperity. But now the Chinese are shocked to discover they can’t have the upside without the downside too. And the Greeks are discovering the consequences of corruption and inattention where the wealthy succeeded in bending the system to their own benefit.

Clearly, the system requires strong regulation and vigilant monitoring to work, restraints that our financial system fights and undermines at every possible turn. China and Greece are reminders of how vulnerable we all are. But even with strong and reliable oversight, two problems inherent in the system remain, apart from its inherent instability.

The first is that it produces inequality, which is a constant threat to democracy. Not only is the distribution of wealth massively skewed, and corruption encouraged, as a result, but also many workers suffer from insecurity and our fragile and frayed safety nets.

The second is the reckless exploitation of the planet. For a while, mesmerized by the cheaper goods our super-charged economy provided, we scarcely noticed the depletion of the planet’s resources, the pollution, the degraded conditions under which we are forced to live, the stunted lives, and illnesses. The rewards of capitalism distracted us, and it seemed a price worth paying.

We all too easily forget to costs and the risks as we celebrate prosperity. And we look the other way.

Perhaps the problem is that it just takes too much effort to remind ourselves of the risks, and we tune out. To be sure, those who benefit most from the system encourage us to look the other way. But we also have to keep in mind facts we would rather airbrush out of our minds.