Today we live under the painful and oppressive yoke of capitalism's restoration to unchallenged power. This is surprising to objective readers of economic history, for when capitalism produced two bloody world wars interspersed by an economic holocaust, those who lived through these events determined that capitalists must never again reign absolutely. Capitalism was fettered with government policies meant to manage its evils and capitalists were ordered to pay for these policies through progressive income taxes. As the enlightened generation of the 1930s and 1940s passed away, however, capitalists challenged the received wisdom with reactionary revisionism, ultimately reclaiming unrivaled power during the Reagan-Bush years.
The last period of capitalist collapse ironically catapulted a leader of great political ability to power who saved capitalism in spite of itself: Franklin Delano Roosevelt. After remarking in his Inaugural Address that the money changers had fled from their high seats in the temple of our civilization, FDR and his administration created new policies designed to counter capitalists' political power yet leave them with ownership in the economy. FDR created opportunities that certainly saved capitalism from revolution, for if Americans had faced the clear choice of either capitalism or socialism in the 1930s, it is likely that capitalism would not have been their choice.
The policies created by FDR's administration and continued by both Democrats and Republicans during the post-war years removed the existential threat to capitalism from mainstream political debate. Strangely, this did not endear these policies to capitalists. Instead, loss of power enraged capitalists, who turned to persecuting left Democrats and socialists of all stripes because they could not overturn the consensus created by FDR. Red baiting and witch hunts were channels through which capitalists could act out their primitive desire for revenge. By and by they waited until political memory of capitalism's disastrous failure melted away, until they again claimed the right to dictate policy to government. This moment arrived in the 1980s with the election of Ronald Reagan and the ascendance of neo-conservatism.
Right ideologues cut taxes on the wealthy elite, starved government agencies dedicated to social welfare, and militarized America. These reactionary policies generated disastrous results, including uncounted trillions of dollars siphoned from an overwhelming majority to a tiny economic elite, impoverishment for millions of American children, and thousands of young soldiers shipped home from foreign wars in boxes. But until the last few years, as long as you were white, native born, and went to college for two years, you were not likely to be materially worse off. Capitalists therefore were free to pursue their greedy agenda with impunity, again producing calamity.
This reactionary, revisionist ideology pursues an openly stated goal of dismantling the social-welfare structure built up during the last ebb of capitalist political power in the 1930s. Capital markets and banks are deregulated to incentivize a new generation of robber barons; corporations use free-trade policies to extort higher profits from workers by threatening to move production offshore in order to reduce pay and benefits; and tax rates on the wealthy elite are drastically reduced in order to starve government programs of revenue, producing large and unsustainable budget deficits.
The situation that Americans face today is similar in many ways to the one confronted two generations ago in the 1930s. In the 1930s a leader emerged accidentally who saved American capitalism from irrelevance; today, should we even hope for one? If capitalism leads to misery, then the dichotomy of either-or is superior to truncated capitalism where capitalists retain ownership and wealth, hence also retaining the potential for political tyranny. If capitalism is again rescued from the dustbin of history, then we will live under continued injustices and face repeated economic ruin in the future. Until we abolish capitalism and establish economic freedom, there will be no end to capitalist tyranny.
Two other chapters from history, spanning place and time, serve to illustrate the fruit of reforming capitalism. Reform policies implemented by German social democrats after the First World War left capitalist ownership of economic assets intact, furnishing capitalists with the opportunity to seek revenge for lost political power. Capitalist support for reactionaries in general, and Hitler in particular, destabilized the Weimar Republic, brought fascism to power in a country with the most capable military institutions in the world, and directly led to the Second World War. A development analogous to the post-WWII US experience is Great Britain, where capitalism was fettered yet broke free again under Thatcherism. These examples serve as a warning to advocates of reform policies that leave capitalists with latent political power in the form of economic power.
The moment of clarity at the dawn of scientific understanding of socialism is still relevant today: the necessity for workers to unite and break the chains of capitalist oppression, ushering in a new age of social equality for all. Policies that temper capitalism for a time, but leave capitalists with the economic assets to generate political tyranny, produce a short period of stability by weakening capitalist political power only to be followed by capitalist resurgence and tyranny. The cure for this phenomenon is socialism, which can only be achieved by emphasizing the dichotomy of either/or (i.e., by clearly dissociating capitalism from socialism.) Because educational attainment in America is very uneven, efforts to enlighten our fellow citizens about capitalism and socialism require a variety of media: from satirical cartoons to sophisticated, theoretical analysis. Only when a majority clearly understands that capitalism equals oppression and socialism equals freedom will America begin the historic climb to a higher stage of development.
