On my first visit to that unhappy land, a ranking official of Komsomol (Young Communist League) got the opposite impression of me. He concluded a discussion with, “Brandt, you are a capitalist.”
I was happy then and now to be on the right side of history, which has transformed the two great communist powers, Russia and China, into market economies.
Triumphant capitalism has banished communism while raising hundreds of millions out of poverty. Now that there’s only one system in the winner’s circle, it is fair to ask, “How is it doing its job?”
Even its most enthusiastic advocates would admit the system falls short of perfection. On that, Marx and Engels agree with Alexander Hamilton.
For that surprising agreement of opposites I am indebted to Jerry Muller’s essay in the current issue of Foreign Affairs. Muller is a historian at Catholic University of America who has devoted his career to the study of market capitalism.
Marx and Engels accurately described the distinguishing characteristic of capitalism as its ‘‘constant revolutionizing of production, uninterrupted disturbance of all social conditions (and) everlasting uncertainty and agitation.”
Alexander Hamilton put it this way, “Tis the portion of man assigned to him by the eternal allotment of Providence that every good he enjoys shall be alloyed with ills, that every source of his bliss shall be a source of his affliction…”
As Providence made its assignments, men left the farm to work in factories making machines, which evolved into a post-industrial society where many of the men were replaced by machines, which caused Marxian “agitation.”
The heralding of an “Information Age” opened the marketplace to women, a benefit that was matched by growing inequality gaps between those at the top and those in the middle and lower incomes.
One way of closing the gap favored by the far left is redistribution of income, a Robin Hood policy of taking from the rich and giving to the poor. The flaw in such a policy is to rob incentive for risky innovation, freezing dynamism in the market place.
The opposite course to give business a free, unregulated hand with the gaps between the haves and have-nots growing ever larger is a dangerous path, according to Professor Muller.
He writes, “If left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large.”
One consequence of unfettered capital in the middle decades of the 20th century was the Great Depression, whose mass unemployment and deprivation was cushioned in Western societies by development of the welfare state.
Lives of frightened and dislocated people were made more bearable by social policies that also were an antidote to the false wiles of communism and fascism.
Another consequence of the free reign of capital was the Great Recession, whose shadow is still seen in a slowly recovering economy. Professor Muller cautions against cutting so much we slide back into recession.
He says the right needs to accept that major social spending is a proper response to some “inherently problematic features of capitalism,” not a “beast” that must be “starved.”
His essay counsels the left not to be too aggressive in attempts to close the inequality gaps, which would be too expensive and probably futile.
He rejects both the politics of privilege and the politics of resentment.
His realistic advice to an unreal Congress is to accept that inequality and insecurity come with the system, that are made bearable by social spending but the focus should be on innovation and dynamism of markets that benefit all.
H. Brandt Ayers is the publisher of The Star and chairman of Consolidated Publishing Co.