Capitalism American Style Has Got to
Go
March 8, 2025
The United States of America is a capitalist country, a
statement that I’m sure comes as a shock to no one. It isn’t pure, laissez
faire capitalism. It is regulated capitalism. There are laws capitalists must obey.
Laws like antitrust laws and worker protection laws. But the country is still
solidly capitalist, probably more capitalist than any other country on earth.
Capitalism is a type of economy, and the American economy is definitely
capitalistic. Our political system is in a sense also capitalistic. It is that
for a couple of reasons. One is that it never occurs to most Americans to vote
for truly democratic politicians, not that we have all that many of them. More
importantly, capitalists’ money controls our political system. The thoroughly
despicable Elon Musk recently bought Donald Trump the presidency with his
massive campaign contribution. It appears that he gave that money in return for
a promise to turn the government over to him once Trump was elected though, of
course, we’ll never be able to prove that that’s what happened. We will never
be able to reform our political system the way it needs to be reformed as long
as Citizens United, is the law of the land. That’s the US Supreme Court
decision that says, incredibly and wrongly, that money is speech and that makes
it essentially impossible to get money out of our politics. American political
campaigns cost an obscene amount of money, another fact that contributes to
money’s command of our politics.
OK, but if I’m going to argue that capitalism has got to go
I must start by explaining what capitalism is. Capitalism is an economic system
the foundational principle of which is private ownership of property in general
and the means of production particularly. That means that private parties or
corporations own the property that produces things for the economy. Take a
steel mill as an example. It’s not cheap to build a steel mill. So someone, or
some group of people, with the means to do it, builds one. That person or group
is then the legal owner of the steel mill. The owner hires people to work at
the steel mill. Some of those people will probably be managers or overseers,
but most of them will be the workers who actually make the steel. The owner
pays those people a wage. The workers work so that they get that wage, which
they and their families need to live on. In an economic system as capitalistic
as the US economy is, the owner pays the workers as little as they can get away
with.
The owner’s purpose in owning the steel mill is to make
money. Part of making money, and part of making it worthwhile to build and own
the steel mill in the first place, is protecting the owner and the mill from
legal liability for things it has done wrong. The owner will probably protect
his, her, themselves, or itself by forming a corporation and having the
corporation be the legal owner of the mill. The corporation will issue stock, a
stock being a piece of paper that represents a partial ownership interest in
the stock’s company, in this case a steel mill. The purpose of a corporation is
to limit the liability of those who own the stock to the value of the stock. A
person or entity with a claim against the steel mill will be able legally to
recover from the steel mill only the value of the steel mill. There may be
circumstances in which a claimant can “pierce the corporate veil” and make the
stockholders personally liable for a claim, but that happens only very, very
rarely if it happens at all. Mostly it’s just something you study in a law
school class on corporations. A shareholder may lose whatever she paid to
acquire stock in the corporation, but she will not be personally liable for
damages from a tort attributable to the corporation or for a breach of contract
by the corporation.
One of the most capitalistic aspects of the American
economic system is what the law says a corporation that has issued stock is
supposed to do. Originally, in English law, a person wishing to form a
corporation had to demonstrate how the corporation would benefit the public.
Today, a corporation’s legal duty is only, or at least primarily, to maximize
the financial return to the corporation’s shareholders. A corporation can do
that by paying dividends to the shareholders and/or increasing the value of the
shareholders’ stock. There are other laws that a corporation must obey, but in
American law the primary duty of a corporation and those who operate it is to
increase the return to the shareholders. The law tells the owners and managers
of corporations that their primary legal responsibility is to enrich the
corporation’s owners.
In a purely capitalistic system, corporations tend to act
more or less irresponsibly. They skimp on worker safety measures. They violate
environmental regulations. They pay the workers as little as they can get away
with. Because the law tells them that their duty is to make money for the
shareholders before anything else, the CEOs, presidents, members of the
corporation’s board of directors, and the managers who actually run the
business for the shareholders will do anything they can do legally (or for
which they think they can avoid legal responsibility) if it increases the
return to the shareholders. Labor, environmental, and other laws may restrain a
corporation’s irresponsibility to some extent, but in the US at least they
certainly do not eliminate it.
Corporations and their shareholders tend to hate
governmental regulation. They see governmental regulations designed to benefit
the corporation’s workers or to protect the environment as unwarranted
intrusion into the corporation’s business. Because they so hate and even fear
governmental regulation, big corporations and their wealthy shareholders flood
the American political system with money. In many places they are able
essentially to buy a political office for a candidate who promises to go easy
on the governmental regulation. Citizens United tells these interests
that there is no limit on the amount of money they can pour into a political
campaign as long as they do it indirectly through a PAC, a political action
committee. Essentially all American politicians therefore bend the knee before
the big money interests. They have to. If they don’t, not only will those
interests not give them any money, they will give a great deal of money to a
candidate’s opponent. Corporations also lobby Congress heavily, but it is their
money that controls American politics.
The capitalistic nature of the American economy, and the
money capitalistic interests pour into American politics, have dire
consequences for a great many Americans, especially those who lack large
economic resources themselves. They mean that workers often have to take jobs
that do not pay a living wage. They mean that the American tax structure
heavily favors the wealthy over ordinary people. They mean that the government
never has nearly as much money as it needs and should have to finance
legitimate governmental concerns (except for military ones, which our country
finances far beyond what is legitimate). There is never enough money to house
the unhoused, provide medical insurance to everyone, make education affordable,
or do a great many other worthwhile and necessary things, things this country
does less effectively than does essentially every other “developed” country.
Because wealth can buy political power, self-interested voices get away with
lies, like the lie that humans do not contribute to climate change or that
there even is such a thing as climate change. Money put a president (Donald
Trump), who caused an indeterminable but large number of deaths during the
COVID pandemic of 2020-2023 by telling lie after lie and denying the reality of
what was going on, in power. The country denied Trump reelection in 2020, but money
put him back in power in 2024 despite the destructive nature of his first term
in office. It is clear that he will hurt ordinary and poor Americans as much as
he can so he can cut taxes even further for the wealthy and their big
corporation.
So what are we to do? We can work to elect politicians who
will pursue policies more beneficial to most Americans than the politicians of
either major American political party do today. That is necessary work; but it
has become clear in recent times, if it wasn’t clear before, that governmental
policies that regulate big business are not enough. They never go far enough.
They always leave far too much necessary work undone. After all, the country’s
money interests think those policies are harmful to them, so they make sure
that even well-intentioned politicians never do enough for the people. There
has to be a better way.
That better way is socialism. What is socialism? It is an
economic system that works for the benefit of all of a country’s people not
just for the benefit of the wealthy the way the American economic system does
today. The term socialism was originally a Marxist term. Marx believed,
wrongly, that history progresses through stages in which the economic system
changes. The ancient economic system grounded in slavery gave way to the
economic system of the Dark and Middle ages based on serfdom, serfdom being
similar to but not identical with slavery. The medieval economic system gave
way to the capitalist system that predominated European economies during the
Industrial Revolution. Sometimes these changes came about through violent
revolution, as when the French people overthrew their monarchy to issue in a
more modern, capitalistic economic system that benefitted merchants and the
owners of the means of production.
Marx taught that class structures determine everything in a
country or culture. He said that they always come about through violent
revolution. He taught that the next violent revolution would be a “socialist”
revolution. It would be the last revolution. It would create a system in which
the state owned the means of production. That is the system the Soviet
Communists tried to create in the Soviet Union. Those Communists never claimed
that they had created Communism in Russia and the rest of the USSR though they
did claim, absurdly, that they were transitioning from socialism to communism. They
created a socialist system not a communistic one. In the USSR no private
individual or legal entity owned anything but the most basic personal property.
The state owned everything of any economic or political significance. The
Marxist-Leninist Communist Party of the Soviet Union corrupted and bastardized
socialism to keep itself in power, but it always claimed to have created
socialism not communism.
In Marxist and Marxist-Leninist theory, socialism was a
transitional stage between capitalism and communism. In theory, though hardly
in Soviet practice, during the socialist stage of economic development, the
state would gradually “whither away.” That’s because, in Marxist theory, all
political systems other than communism reflect and are grounded in class distinctions.
Liberal democracy, supposedly, represents the class distinction between the
capitalists and the proletariat, that is, a country’s working people. Again in
Marxist theory, in the socialist stage of economic development there would come
to be no class distinctions. Everyone would become equal. No individual or
private concern would own the means of production. Therefore, eventually, there
would be no state.
Marxist socialistic political parties in western Europe
developed in a way Marx never expected and that true Marxist communists
despised. They became social democratic parties. They became political parties
that operated within the democratic political structures of their countries.
The Social Democratic Party of Germany, known as the SPD, is a good example. It
was originally Marxist and revolutionary. Its representatives Karl Liebknecht
and Rosa Luxemburg tried to start a socialist revolution in Germany after World
War I. They failed. The party was severely repressed under the Nazis, but after
World War II it became one of West Germany’s two most prominent political
parties, the CSU/CDU being the other. The famous German chancellor Willi Brandt
was a member of the SPD.[1]
The social democratic parties of Europe are generally more “liberal” than their
country’s other parties, but they are not revolutionary or Marxist in any
meaningful sense.
It is this kind of socialism that must displace and replace
American capitalism. The type of economy and economic system that we must
create in this country is best modeled on the economies of the Scandinavian
countries. In those countries, taxes are high; but they are high because they
finance things like free, universal health care, free public education through
college (in Denmark at least), and meaningful retirement benefits for everyone.
The Scandinavian countries have militaries of course, but they are far smaller
than the American military, so these countries spend far less on them as a
percentage of the gross national product than we do. These contemporary social
democratic systems did not come about through violent revolution. The countries’
votes put them into effect.
We will never have true economic or political justice in
this country as long as it remains as capitalistic as it is. I am not
advocating violent revolution here, but the United States desperately needs a
nonviolent revolution. That revolution need not displace capitalism entirely.
The economies of the Scandinavian countries are still basically capitalist, as are
the economies of Germany, France, Great Britain, and other European nations.
Their capitalism, however, is much more thoroughly regulated than is American
capitalism. European nations of course have monied interests, but those interests
do not control European politics in any degree close to the way monied
interests control American politics. Because our country’s economy is so
capitalistic, money matters more than people. Profits matter more than public
welfare. Accumulating vast wealth is more important than social justice.
Capitalism is a dead end. It will never be better than it is
today, and today it is hardly good. The only way out of it is a nonviolent
revolution to a more socialist future. I have no great hope that that will
happen. The monied interests in this country have so succeeded at making socialism
a word that triggers fear and staunch resistance among the American people that
it will be decades at least before they wake up and vote in the radical changes
this country needs if, indeed, it ever happens at all. Still, that the only
lightly regulated capitalism that we have in the US today is a major root of a
great many of our problems is obvious to anyone who will look at American
reality with an open mind. We need democratic—yes, democratic not dictatorial—socialism—yes
socialism not nearly unregulated capitalism. I won’t live to see it happen. You
probably won’t either. Still, one can hope, can’t one?
[1] In
recent times another party, the far right party called Alternative for Germany,
has risen to prominence. It outpolled the SPD in recent German elections. This
is not an encouraging development.
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