Capitalism : What is it ?

                      REALLY EXISTING CAPITALISM

   The term "capitalism" is vague enough to cover many possibilities. It is commonly used to refer to the U.S. economic system, which receives substantial state intervention, ranging from creative innovation to "too-big-to-fail" government insurance policy for banks, and which is highly monopolized, further limiting market reliance. 
   It's worth bearing in mind the scale of the departures of "really existing capitalism" from official "free-market capitalism." To mention only a few examples, in the past twenty-five years, the share of profits of the two hundred largest enterprises has risen sharply, carrying forward the oligopolistic character of the U.S. economy. This directly undermines markets, avoiding price wars through efforts at often-meaningless product differentiation through massive advertising, which is itself dedicated to undermining markets in the official sense, based on informed consumers making rational choices. Computers and the Internet, along with other basic components of the IT revolution, were largely in the state sector, (subsidy, procurement, and other devices) for decades before they were handed over to private enterprise for adaptation to commercial markets and profit. The government insurance policy that provides big banks with enormous advantages has been roughly estimated by economists and the business press to be on the order of some $40 billion a year. However, a recent study by the International Monetary Fund indicates --- to quote the business press --- that perhaps "the largest US banks aren't really profitable at all," adding that "the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from US taxpayers. This is more evidence to support the judgment of the most respected financial correspondent in the English-speaking world, Martin Wolf of the London Financial Times, that "an out-of-control financial sector is eating out the modern market economy from inside, just as the larva of the spider wasp eats out the host in which it has been laid." 
   The term "capitalism" is also commonly used for systems in which there are no capitalists : for example, the extensive worker-owned Mondragon conglomerate in the Basque Country of Spain or the worker-owned enterprises expanding in northern Ohio --- often with conservative support. Some might even use the term "capitalism" to include the industrial democracy advocated by Jogn Dewey, America's leading social philosopher.  He called for workers to be "masters of their own industrial fate," and for all institutions to be under public control, including the means of production, exchange, publicity, transportation, and communication. Short of this, Dewey argued, politics will remain "the shadow cast on society by big business. " 
   The truncated democracy that Dewey condemned has been left in tatters in recent years. Now, control of government is narrowly concentrated at the top of the income scale, while the large majority "down below" are virtually disenfranchised. The current political-economic system is a form of plutocracy that diverges sharply from democracy, assuming that by "democracy," we mean political arrangements in which policy is significantly influenced by the public will. 
   There have been serious debates over the years about whether capitalism is, in principle, compatible with democracy. If we keep to really existing capitalist democracy ---RECD for short (pronounced "wrecked") ---the question is effectively answered : they are radically incompatible. It seems unlikely that civilizations can survive "really existing capitalism" and the sharply attenuated democracy that goes along with it. Could functioning democracy make a difference ? Perhaps.
   Let's focus on the most critical immediate problem that civilization faces, though not the only one : environmental catastrophe.  Policies and public attitudes diverge sharply, as is often the case under RECD. The nature of the gap is examined in several articles in a 2013 issue of Daedalus, the journal of the American Academy of Arts and Sciences. The researchers found that "109 countries have enacted some form of policy regarding renewable power, and 118 countries have set targets for renewable energy. In contrast, the United States has not adopted any consistent and stable set of policies at the national level to foster the use of renewable energy. 
   It is not public opinion that drives policy off the international spectrum --- quite the opposite. The public is much closer to the global norm than policy. It is also much more supportive of actions to confront the likely environmental disaster predicted by an overwhelming scientific consensus --- and it is not too far off : in the lives of our grandchildren, very likely. As the Daedalus researchers found : 

     Huge majorities have favored steps by the federal government to reduce the amount of greenhouse gas emissions generated when utilities produce electricity. In 2006, 86 percent of the respondents favored requiring utilities, or encouraging them with tax breaks, to reduce the amount of greenhouse gases they emit . . . Also in that year, 87 percent favored tax breaks for utilities that produce more electricity from water, wind, or sunlight. . . These majorities were maintained between 2006 and 2010 and shrank somewhat after that.

    The fact that the public is influenced by science is deeply troubling to those who dominate the economy and state policy. One recent illustration of their concern is the Environmental Literacy Improvement Act being proposed to legislatures by ALEC, the American Legislative Exchange Council, a corporate-funded lobby that designs legislation to serve the needs of the corporate sector and extreme wealth. The ALEC act mandates "balanced" teaching of climate science in K-12 classrooms. "Balanced teaching"is a code phrase that refers to teaching climate-change denial in order to "balance" mainstream climate science. It is analogous to the "balanced teaching" advocated by creationists to enable the teaching of "creation science" in public schools. Legislation based on ALEC models has already been introduced in several states. 
   The ALEC legislation is based on a project of the Heartland Institute, a corporate-funded think tank dedicated to rejecting the scientific consensus on the climate. The Heartland Institute project calls for a "Global Warming Curriculum for K-12 Classrooms" that aims to teach that there "is a major controversy over whether or not humans are changing the weather." Of course, all of this is dressed up in rhetoric about teaching critical thinking --- a fine idea, no doubt, but it's easy to think up far better choices than an issue selected because of its importance for corporate profits.