April 24, 2011
BOOK OF THE WEEK: WEEK SEVENTEEN, 2011
Brands, H. W., American Colossus: The Triumph of Capitalism, 1865-1900 (New York: Doubleday, 2010) ("Democracy depends on equality, capitalism on inequality. Citizens in a democracy come to the public square with one vote each; participants in a capitalist economy arrive at the marketplace with unequal talents ad resources and leave the marketplace with unequal rewards. Nor is inequality simply a side effect of capitalism. A capitalist economy can't operate without it. The differing talents and resources of individuals are recruited and sorted by the differential rewards, which reinforce the original differences. Inequality drives the engine of capitalism as surely as unequal temperatures drive heat engines--including the steam engines that were the signature devices of industrial capitalism." "Tension between capitalism and democracy has characterized American life for two centuries, with one and then the other claiming temporary ascendance. During he first half of the nineteenth century, democracy took the lead, as the state abandoned property qualification for voting and the parties responded by courting the masses of ordinary men. . . ." "But capitalism fought back during the Civil War. Even as the Republican party freed the slaves, it emancipated the capitalist classes from the constraints by [Andrew] Jackson and his Democratic heirs. Government became the sponsor of business rather that its foe, underwriting railroad construction, raising tariff rates, creating a national currency, and allowing the likes of [J.P.] Morgan to troll for fortunes in the troubled waters of the war." Id. at 5. If democracy and capitalism are, in some respects, antagonistic, which one is riding high in early twenty-first century America? Can one have much doubt that democracy has been on a long losing streak since 1980s. Think hard about the Reagan Revolution. It appealed to the Nixon's Silent Majority, but the appeal took the form of appeals to their anger and resentment. 'I'm being cheated out of realizing the American Dream.' But if one is being cheated, who is the cheater? The reply: Mainly the government and unfair laws and regulations. But if government regulation is unfair, then, by faulty logic, deregulate and let the market decide. The market decided, and the average American got screwed! I don't disfavor capitalism. But capitalism (and greed) has had too long an unchecked run (not even the collapse of the U.S. economy in 2008 will cause more than a pause), and needs to be balanced with just a touch of empathy for those crushed by capitalism's heel. Empathy is a necessary trait of a true, small 'd' democrat. It is the seeing oneself in the lives of others. Empathy is in short supply in early twenty-first century America, where the mantra of the times is 'I've got mine. Now you try to get yours.' Also see John Steele Gordon, "How Economic Brawn Transformed a Nation," NYT, Friday, 11/19/2010.)).