Can Capitalism be Automatic?

Never being good at ideological judgements, Americans failed to confront a decision about Marxism. Stalin handled that need for us by defeating Trotsky and turning the Soviet Union into a totalitarian, statist economy. Once the issue of Marxist economics per se was buried, the fight became instead over communism, the latter-day impure Marxism.

Nevertheless, the question remains. What kind of country does America want to be now that capitalism dominates the scene? What kind of capitalism? No restraints? Anything goes? What about the common good as against the good of only one sector, the corporate?

We fnd that at this moment in our history that we may be missing a remarkable opportunity. We are confronted with an almost issue-less presidential campaign, certainly at the ideological level. Yet, the antitrust case against Microsoft wending through our judicial system has not been heard about on the campaign trail.
With Marxism no longer on the table, yes we all do want a competitive market economy, one that can be relied upon for an efficient use of our labor and resources at the same time that the distribution of income is reasonably egalitarian. Fine. But in any shape and with any practices?

Across the political spectrum there is an awareness of the influence of campaign monies provided by the wealthy and the corporate sector. Yet the matter of income distribution barely surfaces except, perhaps, when major tax proposals are proffered with the intent to worsen the income distribution. No, we are told, never use governmental power to regulate. That is somehow leftist ideology when the only ideology that is approved from implementation is deregulation.

In the face of almost two centuries of rhetoric lauding competition, why then is there nothing heard from the candidates about the Sherman and Clayton antitrust principles that were intended to preclude the economic distortions emanating from the perverse success of extremist competition?

The drive of the competitive entrepreneur is to create monopoly, that is, to minimize or even eradicate the threat of possible competitors. The theories are plentiful from Nobelists Milton Friedman to Kenneth Arrow that monopoly is not good for the system as a whole—even though the force that creates it, unrestrained competition, is a "good" thing.

On the other hand, successful entrepreneurs become icons to be emulated, not regulated. At the end of the 19th Century and into the early 20th Century the challenge to various governments, especially conservative Republican ones, to go against those icons was daunting.

Fortuitously, there was sufficient antipathy building against the Morgans, the Rockefellers, the Goulds and their railroad empiring that the Republican presidents Teddy Roosevelt and the even more conventional William Howard Taft took on those giants in the face of a strong corporate sentiment within their own electoral ranks.
They enforced the then recent antitrust legislation which had been allowed to lay idle. In short order, those presidents, especially Teddy Roosevelt, became the heroes of the political system as the "trust busters" and remain today among the top Presidential heroes since Washington and Lincoln.

Counter to present practice, they went against the economic icons of the day by fighting the fighting for truer competition and against monopoly.
In today’s terms, Bill Gates of Microsoft (with his personal net worth of 60 billion dollars) shines as the star to be emulated.

On the other hand, Microsoft has become the target of the reformers—but not fast enough. In the still undefined terms of what a competitive economy ought to be, the public at large does not see the long run damage done by the monoplistic practices of letting Microsoft go kill the baby of competition—as it throws out the bath water.
How can the presidential candidates not address this issue so central to our future? Yes, the issue is in the courts, but political if not ideological dialogue is nonetheless called for with long run direction of the American economy at stake.

What a moment to be devoid of leadership! Worse, what antitrust rhetoric we hear is not from the executive but rather from the bureaucracy. And what about the matter of the mergers and acquisitions taking place, it seems, on a daily basis? Do our leaders think these are good, or bad, for the economy as a whole? Are they for the common good even when vertical as well as horizontal? So much should be on the table, yet so little is. It is as if the very dynamism of the economy as we know it has diluted our political life.

STANLEY K. SHEINBAUM
Founding Publisher, NPQ

Back to Index