Capitalism

  Does capitalism have a future?

   In an era reminiscent of the "Gilded Age" of the late 19th and early 20th Centuries, when the wealthiest 1 percent enjoyed a privileged lifestyle while much of the rest of society struggled, this is a fair question.
   The answer from this corner is yes, it will survive, but only if it changes.
   Entrepreneurs have a right to be compensated (earn a profit) for their skills in organizing, starting and operating a business. But a major problem with capitalism is the arrogance of wealthy capitalists and their abusive behavior toward those who work for them.
   There's nothing inherently wrong or evil about capitalism; the evil lies in the arrogance, corruption and the abuse of other people by its practitioners. Even The Economist, a journalistic bastion of the free enterprise system, has noted that in many ways, Karl Marx was right. There were abuses in the system that needed to be corrected. Moreover, the problem with Communism, as practiced in Russia and Eastern Europe, is that it didn't work. China has a modified system, incorporating features of capitalism in its version of socialism. And Cuba has begun efforts to privatize many elements of its economy.
   With every right comes responsibility, and the history of capitalism is rife with stories detailing how arrogance begets abuse.
   Journalists in the 19th Century were called "muckrakers" for exposing abuse and corruption in corporate America. Theodore Roosevelt, who is credited with first using the term, intended it to be an insult. The writers instead embraced it as a badge of honor.
   Beginning with Lincoln Steffens, who exposed abuses in politics; Ida Tarbell, who dealt with John D. Rockefeller's Standard Oil Co. monopoly, continuing with John Steinbeck's The Grapes of Wrath and Upton Sinclair's The Jungle; all the way to recent reports of corruption and abuse in the financial sector as well as a wide range of political, corporate and government topics, journalists have led the fight to correct abuses.
   Charles Dickens is rightly remembered for his novels, but it's important to remember that his purpose was to expose the evils of poverty in 1840s England, and the abuses related to it. At the same time that Dickens was writing his fictionalized accounts, Friedrich Engels was writing factual accounts and his friend Karl Marx was working on his theories upholding the rights of workers.
   Marx wrote that capitalism has within it the seeds of its own destruction -- an idea that was later echoed by conservative economists like Joseph Schumpeter, whose theory of "creative destruction" suggested that capitalism must constantly evolve to survive. And James Fulcher of Oxford University wrote that "Crises are a normal function of a capitalist economy."
   The issue, then, is how capitalism can adapt and evolve so that everyone benefits. Marx saw only the destructive side of capitalism, not its phoenix-like ability to resurrect itself to new, more vibrant life. Marx predicted that capitalism would collapse, and be replaced by an economy dominated by workers. He did not anticipate, however, that management would learn to cooperate with labor unions so that both sides would benefit.
   To Marx, self-destruction meant an end to the capitalist system entirely, to be replaced by a full form of socialism. It didn't happen that way. There were accommodations on both sides. Moreover, Marx based his analysis primarily on the economic systems in England and Germany, and was opposed to its principles being applied to Russia. Reason: Western Europe had already undergone an Industrial Revolution, while Russia was still a feudal society.

   Just as the rise of labor unions brought about concessions and accommodations from management in the 20th Century, which benefitted both sides, and as the Great Depression, coupled with the First World War, brought an end to the first "Gilded Age," so also there will be adjustments in the 21st Century, as capital and labor learn to cooperate with government to build a better society.
   There are some, however, who still follow the precepts of David Ricardo, the 19th Century thinker who believed that in the long run, left to its own devices, the economic body heals itself. Therefore, no government involvement is needed or warranted in an unfettered free enterprise system.
   But, as the 20th Century's John Maynard Keynes replied, "In the long run we are all dead."
   Meanwhile, millions suffer.