Thursday, August 2, 2012

How To Defend Capitalism

Mitt Romney, writes Ramesh Ponnuru, ought to respond to Barack Obama's attack on capitalism with something more than ten point programs.
To respond to Obama’s attacks on outsourcing and Bain, Romney ought to unveil something more compelling than another tax return.
Yes, but how?  People are right to fear outsourcing.  And they are right to fear private equity companies like Bain.  Capitalism is a fearsome thing.  It may be true that you work for a company that is getting slowly flushed down the toilet, but if it lasts until you retire, why rush out to get Bain to fix things if they ain't quite broke?

Don't look back, as Satchel Paige said.  Something may be gaining on you.

Capitalism has always had to take the rap that it doesn't give a rip about people.  The market economy is the law of the jungle and the weakest go to the wall.   Back when I worked for a consulting firm, my fellow workers would get shocked when the firm laid people off.  Look what it says in the employee manual, they said.  Look how it says that the firm cares about employee development.

Yeah.  They may care a lot, but when they see the company in the red for three months in a row, they will do the instinctive thing.  They will act to save the company, not the employees.  And really, this is nothing out of the ordinary.  What do you think an army is all about?  It is about sacrificing young men so the nation as a whole will survive.  The government may idolize the Fallen every Memorial Day and  those who served every Veterans Day, but the fact is that those mother's sons are still dead.

Both corporations and governments are pretty ruthless when it comes to survival.  They sacrifice their employees and their young men generously during hard times.  But people understand the social requirement for the government to defend them.  Anyway, most people aren't young men.  But when it comes to corporations acting to save the corporation, people identify with the folks losing their jobs to machines or outsourcing.  There but for the grace of the fickle market go I.

But there are ways you can protect yourself against the vicissitudes of the market, just as there were ways for the agricultural villager to protect himself against the vicissitudes of the weather.  Workers can save.  If they don't earn much they can mutualize their savings by joining a benefit club or fraternal association.  In the old days, labor unions were mainly mutual-aid associations.  For those with a bit more money, there is insurance.  For those with more money still there are savings accounts, bonds, and stocks.  Oh, and guess what:  there is family.

Yes, but shouldn't all these benefits be provided by your employer or by the government?  Well, you tell me.  That employer thing didn't work out so well for the old-line steel companies, and the only reason that the auto workers aren't totally screwed is that the government stepped in, screwed the widow-and-orphan bond-holders, and made good the corporation's broken promises, courtesy of the taxpayers.  And as for government, how do you feel about collecting on your Medicare or your Social Security in 20 years?  The latest estimate is that we are about $100 trillion short if the government means to pay out on its promises.

The point is that both corporations and governments are ruthless outfits interested only in #1.  Individual people, to corporations and governments, are expendable.  But there is a solution.  It is called civil society.  It is the social space in between the mechanical monoliths, the megastructures of business and government.  Civil society includes every organization that is in the business of people helping people.  They don't have power; they don't have influence.  That is why they can afford to think about the needs of their members rather than the glory of the collective.

Conservatives have been banging on about civil society since Edmund Burke and his "little platoons" over two centuries ago.  Civil society flourished mightily in the 19th century, as ordinary people formed fraternal associations, churches, labor unions, charities, benefit clubs, friendly societies, you name it.  Of course, they couldn't perform miracles; for one thing, the world was a lot poorer back in the 19th century.  In the 20th century, government got into the act and nationalized most of the functions performed by the "little platoons."  There turned out to be a problem with that.

The problem is the age-old problem in any association of social humans.  It is the freeloader.  In any community, there will be people that don't pull their weight.  They figure out how to game the rules and they do.  Traditionally, society has confronted this problem with naming and shaming, which works in the face-to-face community.  And religion has solved the problem with the concept of divine justice.  You may think you are getting away with your cheating, but God is not mocked.  He knows, and he will deal with you in the next life when you find yourself burning in Hell or, in Plato, in the river of Tartarus down at the center of the Earth.  But the welfare state has turned out to be a veritable Springtime for Freeloaders.  Just get yourself defined as a victim and you can live at the expense of your fellows forever.  That is why the welfare state is going broke.

The solution to big business is not big government.  And the solution to big government is not big business.  Nor can we go back to an imagined Garden of Eden where true community reigned.  We have invented modern business and modern government and we can't uninvent them.

But we can create a human space in between the ruthless megastructures.   We can grow a vibrant civil society in the spaces between the Bigs. That is what conservatism has wanted to do for decades.  And that is how we reckon we can defend capitalism from itself.

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