Academic circles and news media are abuzz with the latest French critique of capitalism by Thomas Picketty. In his historically-informed tome (685 pages), Picketty illustrates how capitalism over the last three centuries retains its tendency to concentrate wealth in the hands of the few, so that overall inequality increases (except for three decades in 20th century America).
Like all other major academic accomplishments, what’s missing is as important as what is emphasized. Though critics and pundits are fixating on the difference between wealth and income inequality (especially in light of gigantic Wall Street salaries), something important is being glossed over.
Are we indeed practicing capitalism in America? Are we true to the principles advocated by Adam Smith and his fellow classical political-economists? Their principles were modeled on Enlightenment ideals such as freedom and equality, moral respect and public education. They also believed that the capitalist marketplace could cure all the ills of the feudal and mercantile systems.
Have these ideals been accomplished? Outside of the complaint about unintended consequences of capitalism (wealth inequality), are the actual legal and political guards supportive of these classical ideals?
Instead of surveying the national or international landscape, let’s focus on our immediate surroundings to see how capitalism is conveniently (or lazily) applied. What’s at stake is consistency of thought and practice — practice what you preach!
First and foremost, if the marketplace is supposed to be in private hands, if the government is supposed to get out of the way and let private industry determine the direction of our city, why are we so dependent on the Department of Defense? Why does our Chamber of Commerce, now the Regional Business Alliance, look like the Chamber of Defense? Is it just all too convenient to have the federal government subsidize our local economy?
Second, if we believe in markets being more efficient mechanisms to decide how to allocate resources (capital and labor), and if we believe government’s role is simply to accommodate private-sector needs, why has our City Council become such an obstacle to anything that happens locally? Is it simply that nine power players have forgotten how little we should be hearing from them?
Third, if the Austrian economists and their Chicago-University descendants got it right about minimal government intervention (except to enforce voluntary contracts among individuals), why has City Council regulated away recreational marijuana sales? The paradox must be obvious: The benefits of sales taxes will stay out of the city but the costs of policing problems will remain ours. Shouldn’t we let the marketplace decide what should be bought and sold?
Fourth, classical political economists worried about monopoly powers — the tendency for companies to buy each other and become dominant in a market — and oligarchical behavior, the tendency for collusion on prices and product quality. The marketplace is envisioned as a meeting place for “little” buyers and sellers none of whom can dictate prices when supplying or demanding goods and services.
How come, then, do we have a utilities monopoly in our midst? With no competition or oversight, CSU can raise rates at will. Is this the most efficient way to handle a needed commodity — energy — for our city?
Fifth, from developmental economists to finance gurus, there is basic agreement on the need for exchange of information, the most valuable commodity in the marketplace. The free flow of information allows for minimal government coordination of long-term plans, such as City for Champions. This is part of the capitalist framework as long as government agencies aren’t themselves involved in competing for resources and customers. Why not let a thousand lights shine on this plan? Why hinder the private forces waiting to engage this four-pronged effort to revitalize the city?
Overall, we should be hearing about what companies and educational institutions, like UCCS, are doing in town as economic “engines” rather than what’s the latest scrimmage between the mayor and City Council or between CSU and the rest of the politicians it is promoting and electing. Let’s stay focused on what could be an emerging and successful model based on the beauty of the city and its healthy environment.
Unlike the (federally funded) military bases we are so fond of, let’s focus on being the headquarters of the U.S. Olympic Committee and some of its affiliates. If some of our wealthy leaders are proud to call themselves capitalists, let’s remind them not to be convenient capitalists but consistent ones! If these exhortations fall on deaf ears and anyone remains confused, look northward to Denver and see what is being done right.
Raphael Sassower is professor of philosophy at UCCS. He can be reached at email@example.com See previous articles at sassower.blogspot.com.