Since the 2008 financial crisis, there’s been a renewed interest in talking about the inherent problems and weaknesses of capitalism. There has even been renewed interest in socialism, or at least the “Democratic Socialism” which Bernie Sanders and Alexandria Ocasio-Cortez espouse.
This conversation is long-overdue. Economics is at the very heart of our national life, and it’s impossible to talk about the common good without talking about economics. Debating which sort of economic principles are most conducive to the culture and country we want to have has long been neglected. It’s a great thing that we’re starting to talk about it.
As is often the case with contentious issues, however, we talk past each other without taking the time to listen well enough to at least disagree accurately. Often we don’t end up disagreeing with our opponents’ real views at all, but with a caricature of them. The result is as predictable as it is common: polarization and alienation from our fellow Americans, and a degraded public discourse.
To some people, capitalism merely means free markets. To others, it is an unjust economic system in which inequality and concentration of wealth are inherent features, not bugs.
To some, socialism implies the abolition of private property and an economy centrally controlled by the state. To others, it is simply an economic system which puts the public good ahead of private profit.
With such starkly different meanings of these terms, is it any wonder we can’t have productive discussions?
To start a productive conversation, I would suggest that practically no one in the United States advocates for the extreme forms of either system. No one believes in markets without any regulation, and no one believes in the abolition of private property and a centrally-planned economy. These are the caricatures or “straw men” which each side set up in order to “destroy” their opponents. When we hear such caricatures, we ought to be deeply suspicious.
Instead of the most extreme versions of either capitalism or socialism, the vast majority of Americans embrace an economic system which blends principles from both. Everyone believes in the capitalist principles of private property and some form of the free market; on the other hand, everyone believes in the socialist principle that the government has a role in intervening to bring about a public good that society demands but which the market won’t produce. As is often the case, we don’t disagree on principles so much as we disagree about where to place the fulcrum, to balance principles that might be in tension but which nearly all Americans share.
This is an essential point, I think, because it always turns down the temperature of any debate when we realize that we’re not arguing about opposing principles so much as how to balance principles both sides hold in common. This recognition unites us rather than divides us, and it establishes a foundation for discussion and debate rooted in good will and generosity rather than skepticism or contempt.
When progressives push the Green New Deal, it’s not because they hate liberty and love government. It’s because they value solving the climate crisis, and see government as the only practical vehicle for doing it. When conservatives criticize the Green New Deal it’s not because they hate the environment or don’t care about the evils of climate change. It’s because they value liberty, and fear the unintended consequences of an excessively powerful government and its overwhelming interference in the free market. When some fearmongers tell us that progressives hate America, and others tell us that conservatives have no heart, we shouldn’t believe them.
The art of politics is the art of balancing competing but equally valid ideas. The tensions which exist in our political culture are healthy and important, and can serve as a source of strength rather than weakness. If we are willing to grant that our opponent’s ideas have a kernel of truth in them, and that our opponents’ criticisms of our own ideas have a kernel of truth as well, we can begin to have hard conversations based on mutual respect rather than scorn.
In the case of capitalism and socialism, we’re not really disagreeing about whether or not to have private property and free markets, or government investment and regulation. We all believe that we need those things. We’re simply disagreeing about how to balance these competing principles.
However, perhaps the most important thing to recognize in this debate is that neither capitalism nor socialism (or any economic system) is an end in itself. Instead, economics is merely a tool for promoting a society’s vision of the public good. But as with any tool, you need to have a clear goal or objective in mind. The tool doesn’t tell you what to do with it, what to build. And wielding a hammer randomly and without purpose can be quite dangerous.
So it is with economics. We often argue about the tool—socialism or capitalism—without a clear vision of the good life. In the moral vacuum that’s left, the economic system itself starts to suggest or rationalize certain moral values. In capitalism, greed becomes to become overlooked at first and then eventually praised. In socialism, the physical and material wants of society begin to be emphasized to the neglect of spiritual needs.
And so what encourages me most about our current conversation is the fact that some on both the left and right have begun to ask questions which seek to go beyond both socialism and capitalism, recognizing that the principles of capitalism and socialism represent means to an end, but don’t really tell us anything at all about what end they’re being used to pursue or what ends our economic system ought to pursue.
In arguing abstractly about the merits of socialism and capitalism, we’ve missed the main point. A new breed of critics is forcing us to ask not “What kind of economy should we have?” but the deeper questions: “Who is our economy for?” “What is the ultimate purpose of our economy? ”What would success look like?”
My curiosity is aroused any time I see people on opposite sides of the political spectrum finding common ground which bucks conventional wisdom but makes lots of sense. So imagine my delight recently when Fox News’s Tucker Carlson dropped a bombshell of a monologue by praising Democratic Senator Elizabeth Warren’s “Plan for Economic Patriotism.” While decrying her views on all sorts of other progressive issues, Carlson praised Warren’s understanding of our economic system through the roof, describing her as “Donald Trump” at his best—a compliment, perhaps, which Warren herself would not find flattering.
What Warren, Tucker, and others have been preaching for some time is a sort of economic nationalism, one which puts American workers of all classes first. Their argument is that, ultimately, there’s not much difference between socialism and capitalism if both lead to a concentration of power by elites, the state in the case of socialism and a wealthy ruling class in the case of capitalism. Is there much difference, they would ask, between big government and multi-national corporations? What both systems, as typically practiced, have in common is a tendency to alienate and disempower the majority of ordinary Americans while rewarding a small ruling class with wealth and power.
The opposite of the concentration of wealth and power inherent to both socialism and capitalism as we have known them would be an economic system in which power and wealth are widely distributed. A hundred years ago, prophetic writers like GK Chesterton and Hillaire Belloc coined the term “distributism” to describe such a system. More recently, Pope John Paul II, in criticizing both socialism and capitalism, suggested that a term such as “free economy” might be suitable. Even more recently, others have suggested that something like “ethical capitalism” or “moral capitalism” would do just fine.
I’m not sure the term matters so much as the substance. Oren Cass has recently expressed it succinctly and powerfully:
“[A] labor market in which workers can support strong families and communities…should be the central focus of public policy.”
I think a great majority of Americans would agree that both socialism and capitalism as we have known them have failed to produce strong families and communities. The tools, as we have employed them, have failed to meet the goal for which they were, or should have been, employed. Perhaps it’s time to reset the debate, to go beyond the economic “systems” of capitalism and socialism, and to embrace economic principles which recognize strong families and communities as the heart and touchstone of policy. Perhaps it’s time to put economic principles firmly and clearly in their place, subservient to the human values and human needs which they should serve.
I hope we get beyond the simplistic and caricatured debates we sometimes have about capitalism and socialism. I hope the current conversation we’re starting to have opens up deeper and more insightful avenues of discussion that might address the economic peril in which we find ourselves. An economy in which more than 20% of children are raised in poverty can hardly be said to be an unqualified success, but nor can a society be said to be a success which has failed to decrease poverty rates during the past 50 years despite spending billions upon billions of dollars on poverty fighting. Both conservative and progressive economic policy have failed to create the sort of society we want. Perhaps it’s time for some new ideas.
An economy which is healthy and well-functioning would display not a concentration, but a wide distribution, of wealth and property and prosperity. I agree with Oren Cass. This should be the focus of all our economic policy. It is a mighty task, not one for a mere season or election cycle but one for a generation at least. It would actively resist concentration of wealth and power, whether by international corporations or by the state. It would go beyond socialism and capitalism, because it would recognize that in their effects, they have been simply two sides of the same coin.