I guess you can tell the slant of this documentary. Source: Wikipedia.
As a business student, the subject of capitalism comes up frequently in classes. As you would expect, most professors’ attitudes towards it are wholly negative. If they are not outright hostile, then they only begrudgingly accept it as a necessary evil.
For the most part, academics serve a good purpose in society and in the economy, but their obsession with theory and policy often distorts their perception of reality. Ronald Reagan put it best when he said, “One definition of an economist is somebody who sees something happen in practice and wonders if it will work in theory.” Replace economist with essentially any type of academic, and you have one of the major problems with modern-day academia.
Just today, I received an assignment—written responses to a few questions about a documentary called The Corporation the class was asked to watch—with the following question: “If you were able to design a better form of capitalism, what would you change about the United States?”
Disregarding the fact that the question actually makes no sense, I answered:
A “better form” of capitalism? There is no such thing. There is only true free market capitalism, or there isn’t any capitalism. Free market capitalism is the most efficient, innovative, and freedom-promoting economic system ever known to man. Where there is central planning, there exists only economic malaise, reductions in freedom and innovation, and general suffering. The U.S.’s economic system should be a truly free market capitalist system with minimal government interference and maximum personal freedom.
If you want to make capitalism better, all you have to do is leave it alone.
Maybe you missed your professor’s point. If you think the US system is a true “laissez-faire” capitalist system you need to do some more reading and analyzing. And if you think the US system is the most productive in the world, you need to investigate others.
Take China, for example. They have a planned central economy with capitalistic components. Yet they seem to be doing extremely well. Do you know why they are able to supply cheap labor ? Because the government provides much of the social infrastructure (health care, low housing and food costs) that our workers and businesses pay for. And they have ignored the enormous pollution that has gone hand in hand with the growth. Take the socialist-capitalist economies of western Europe.Very successful in melding the two systems. People have high standards of living and are much happier with their lives than Americans.
You seem like a pretty intelligent person based on your blog. I would hope you would keep an open mind. The opening paragraph of your essay seems to indicate that you are unwilling to even consider your professor’s question. Perhaps you should rethink that and come up with some ideas not just talking points.
For example. You might want to discuss how the US capitalist system would work much better without massive tax subsidies to major corporations. Corporate socialism. Why can’t the agribusiness industry survive without massive government handouts to the farm states ? Is that really capitalism ? Doesn’t that favor major corporations over small business? Is that not an example of the government “picking winners”. And isn’t that government assistance the exact opposite of what a true “laissez-faire” system would dictate.
That is just one example.
I am glad you have profs who are not afraid to put forth questions that disturb and make students think. that is what a good educator should do
I completely understood the professor’s point. Using vague language, she wanted us to posit how increased governmental regulation would make capitalism better. I respect her opinion, and agree that dissenting opinions are good, especially in the learning environment. However, just because she is the professor and I am the pupil doesn’t mean I must believe her or agree with her on every topic.
I’m 100% against corporate socialism, also known as crony capitalism. Government should play no hand in picking winners and losers in the free market, in disrupting private property, or in placing undue barriers to innovation.
The professor’s question is deceptive, because students reading the question automatically assume the U.S. has a true capitalist economic system. While it does have certain capitalist elements, as you pointed out it has been greatly perverted by corporate socialism. It is incorrect to use the corporate-socialist corruption of U.S. capitalism and define that as true free market capitalism.
A better question would have been “If you could change the U.S. economic system, how would you change it?”
This is a truly open-ended question. Free market students like myself would call for greater economic freedom, less regulation, etc. Central-planning students would call for a greater governmental role in the economy. Communistic students—and, yes, there are many of them—would call for the abolition of private property and free enterprise.
Don’t you see how an open-ended question with no political bent promotes a much greater, much more honest debate?
Frankly, looking at your prof’s question I don’t see the “hidden agenda” that you seem to see. She assumes that the US has a form of capitalism. Isn’t that accurate? She does not say a total “laissez-faire” system. And she ask’s how you might make it better. She does not say or suggest that “government regulation” will make it better. You could easily argue that less government regulation, in terms of support for crony capitalism and deregulation, would make it better. Couldn’t you ?
It looks pretty open ended to me. As a liberal I would argue that increased regulation of the environment, workplace and a needed social safety net would make the system function better for all.
I can see where a conservative would argue that fewer regulations, more flexibility by the employer regarding labor and lower welfare costs would be beneficial (Although I don’t agree).
I suggest you explain to her that while we call the current system”capitalistic” it is not pure. Any more than “communism” was ever pure in the old Soviet bloc. Then go on to explain what elements of the current system you would change, and why.
I think you may be reading too much into “motive”. Stick to your guns. Answer the question. Maybe you will convert her!
Generally, regulations only serve to promote crony capitalism or protect the status quo by making it more difficult for small businesses and start-ups to challenge well-established corporations. This is why in the relatively unregulated app market, for example, there is constant innovation and business creation, whereas in the oppressively regulated automobile industry, we’ve only seen one mainstream development–Tesla–in the past several decades. There are other factors at play, of course, but the regulatory one is too often ignored.
Am I reading too much into motive? I don’t think so. I don’t think she’s trying to push her political views on us, but I think the question simply carries an underlying assumption that is very political. I appreciate your comments, though.
To amend my first point above: not all regulations serve this purpose. Some regulations are genuine, like those preventing the dumping of pollutants into natural water supplies. However, some–many–are not genuine and end up hurting more than they claim to protect, like the requirement under Obamacare that any business with more than 50 employees to purchase health insurance for all employees. On the surface this seems nice–hey, more people are getting health insurance–but at the same time the small business will stop hiring/expanding, might layoff employees, raise prices, etc.
I enjoy reading your blog because I think it is good to see the other point of view. You may, or may not, want to take a look at my once-in-awhile blog as well. http://josephurban.wordpress.com/
Certainly will do.
You mention Obamacare as an example of where you claim the government is interfering too much. Why should the richest country in earth place capitalist gains of a small business above the the health and, literally, the lives of its people? 50,000 citizens of “the greatest country on earth” die every year, simply because they lack health insurance. It’s probably hard to imagine as a rich republican who has never seen the true face of America, but coming from any other developed country it is incredibly grim and inhuman that a person suffering from a fatal disease or other ailment can go to hospital, and be turned away – literally condemned to death with absolutely no hope.
For instance, should insurance companies be completely deregulated? Is there _any_ benefit to the general population of having completely privatized healthcare and insurance? Insurance companies have absolutely no incentive to pay for expensive procedures to try and save the lives of their customers – instead they label these as experimental and unnecessary – because the only incentive they have is to maximize profits for shareholders.
Mr. Durban,
Healthcare is not a right. You are not entitled to the services of a hospital, of doctors, or of nurses and other healthcare professionals. Furthermore, you are not entitled to insurance of any kind, including health insurance. To obtain healthcare services or health insurance, you must engage in an economic transaction by paying for such services. There is no such thing as a free lunch.
You write as if maximizing profits for shareholders is a bad thing. Surely, if companies did not have this end-goal in mind, our standards of living would plummet, sending us back to Middle Ages squalor. It is particularly because private companies have the profit-motive that they will deliver better service to their customers. Free markets regulate themselves to produce the optimal bundle of prices, services/goods, and corporate behaviors. If, say, one insurance company charges too much, or doesn’t cover enough in its plans, another one will recognize the opportunity to pick up market share and offer more affordable prices or more plan coverage.
But what really struck me about your comment is when you called me, or implied that I was, a “rich republican who has never seen the true face of America.” Could you please explain what “true face of America” you have seen?
Casey,
Healthcare is a human right, as declared in the Universal Declaration of Human Rights, which, surprisingly, even the United States has adopted. Specifically, specifically it states:
– The human right to health guarantees a system of health protection for all.
– Everyone has the right to the health care they need, and to living conditions that enable us to be healthy, such as adequate food, housing, and a healthy environment.
– Health care must be provided as a public good for all, financed publicly and equitably.
If not maximizing profits for corporations sends us back to Middle Age squalor, then why is the standard of living, healthcare and happiness (yes, all three) consistently ranked higher in a multitude of “socialist” countries, as compared to the United States? You have, arguably, one of the most, if not THE most, free-market oriented healthcare systems in the world, and yet the US is ranked between Costa Rica and Slovenia in terms of care, and in terms of cost of care your care is the most expensive, and achieves less than others. Is this some sort of dip in quality that occurs in systems that are in a state between free-market and socialist, or am I missing something?
Re the comment: You are – you go to a school that has a list price of 60,000 USD a year. (a school that costs 150% of the mean and median income in the US). Statistically you belong to a family that is one of the top earners in the country – no wonder you don’t value universal and accessible healthcare for all if you’ve never experienced the need for it. I’m sure your tune would change were you born to an average family in a Detroit suburb. However, maybe then you wouldn’t deserve healthcare, because after all, you’d be poor – they should just accept their position and choose between not being poor or dying. Simple enough.
Whether or not healthcare is a right is certainly a point of debate. I would take the position that in our society it is.
As a society we have enough wealth to provide basic care to all. Keeping the population healthy (by providing adequate preventative and emergency care) benefits all of us. It increases productivity by keeping the workforce healthy. Assists children who and helps secure their futures. Benefits the economic system by preventing more expensive care for the elderly and disabled and needy . An “ounce of prevention” argument.
In poor societies without adequate funds or resources that might not be the case. In “western” societies which can afford it , it make s sense to consider adequate health care a right.