I think it’s clear to everyone that capitalism in the United States has gotten pretty out of control lately. Inequality is at or approaching Gilded Age levels. Job security no longer exists for most people. The middle class is vanishing, even though no one will admit it, most especially those who’ve slipped a rung or two on the economic ladder. Yet by the numbers the economy’s doing pretty well, and mostly recovered from the shock of the housing bubble popping. Which is true, if you’re a too-big-to-fail corporation or a member of the one percent.
For the rest of us, not so much.
It doesn’t have to be this way, and once upon a time not that long ago, it wasn’t. Say what you will about the three decades spanning the mid-forties to the mid-seventies; economically speaking it was kind of a Golden Age. Thanks to the safeguards put in place after the Great Depression (and some frankly redistributive top tax brackets), there were decades of consistent economic growth, the fruits of which were more widely shared than at any time or place in history. If you’re not old enough to remember, ask your parents or grandparents what it was like back in the day, when you could get a good-paying job right out of high school that could buy a house and support a family and came with lifetime security and a pension and a raise every year.
So, how did we get from there to where we are now? More importantly, how do we get to a better place, economically speaking, one where the incredible prosperity that capitalism can produce is more widely and fairly distributed? Because let’s face it, no other way of organizing economic activity human beings have ever tried has come even close to producing the plenty that properly regulated capitalism can.
There are lots of answers to the questions I’ve just posed, things to do with tax law and the regulation of banks and financial institutions. But the first thing, to my mind, is to reframe the way we think about capitalism. Thanks to a combination of the Cold War and the tenets of market fundamentalism and trickle-down economics, contemporary discussions of capitalism, at least in the United States, tend to be pretty reductive: you’re either fer it or agin’ it, with nary a shade of nuance in between. The success of this either-or narrative is a big reason we are where we’re at.
So how shall we reframe our thinking about capitalism? The most useful answer I’ve been able to come up with to that question is this:
Capitalism is like fire.
Fire out of control runs rampant and destroys things. It burns down cities and forests, consumes all it touches. Such is the nature of fire. But confine it to a hearth and it cooks your food and warms your home. Confine it to an engine cylinder and it will propel your car for distances your not-so-distant ancestors couldn’t have dreamed of. Make use of its nature under proper conditions, and it powers civilization, unlocks possibilities that change the game for what human life can be.
Capitalism has a similarly consumptive nature, and though it privileges competition it also invariably works against it. Left unchecked, money and power extract value from resources and labor, and funnel that value upward, concentrating wealth and power in the hands of a few, who distort the competitive ecosystem to their own advantage, killing competition and leaving the rest of us living paycheck to paycheck, one illness, accident, or stroke of bad luck away from inescapable penury.
Both capitalism and fire are powerful forces that, properly harnessed, have enabled huge advances in the capabilities and prosperity of human civilization and society. And both, when they slip that harness and run amok, can be incredibly, catastrophically destructive.
Is the analogy perfect? It is not. But I find it useful because it reframes my thinking about capitalism in instrumental terms. It takes it off the pedestal and puts it in the tool-box, where it becomes a means and not an end in itself. It conceives of capitalism as something whose nature can be consciously harnessed in order to achieve widespread prosperity, which seems to me a more laudable goal than freeing that nature from the fetters of prudent regulation in the faith that it will produce a good outcome on its own, despite all the evidence to the contrary. Indeed we have done just that as a society these last few decades, and look where it’s gotten us.
Like any tool, capitalism can be put to good and bad uses. Like fire, it will always follow its nature. So let’s use it consciously, the way we use fire. Let’s keep it bounded and harnessed, that its power serves us instead of the other way around.
Let’s cook our food without burning the house down.