Capitalism is very capable of enriching our lives – the modern world is irrefutable evidence of that( see What is Capitalism?). Below is what Jonathan Haidt calls “the most important graph in the world.” It illustrates how capitalism has, and still is, raising humanity from poverty to a material prosperity never before seen on this planet.
Quoting Jonathan Haidt from the article from which the above graph was taken:
“I love this graph because it shows us how capitalism changed the West and Japan in the blink of an eye, and it foretells a similar transformation in the rest of the world. Billions of people are rising out of poverty as globalization connects them to international markets and makes it possible for them to engage in work that creates far more economic value than small-scale farming ever could. In a few decades, billions of people will be as wealthy as Americans are today.”Jonathan Haidt, HOW CAPITALISM CHANGES CONSCIENCE
The problem really isn’t capitalism per se. It is simply human nature and the fact some people will do anything to make a buck (see Capitalism, A Deeper Look) . Capitalism constrained by strong protections on human rights is a boon to humanity. Capitalism unrestrained by those protections is quite capable of fueling unspeakable evil.
We saw how capitalists profited off of slavery before the Civil War in the U.S. and how companies like IBM profited helping German Nazis with the technology that made the killing camps of the Holocaust possible in World War 2 – see Capitalism, A Deeper Look. Today companies like Walmart and IBM (and many, many others) are working with the Chinese Communist Party (CCP) to build the most comprehensive totalitarian police state the world has ever seen. I don’t think it is farfetched to say that many of the technology companies in Silicon Valley are in bed with the CCP, or at the very least, ignore the growing evidence of human rights violations, concentrations camps, forcible organ harvesting, and genocide on a par with that of Nazi Germany.
The final problem I see with Capitalism is that great concentrations of capital are often translated into raw political power. The ability of Capitalism to generate great wealth can enable great abuses of political power. To be clear, economic power is not the same thing as political power. Ayn Rand summarized this when she wrote:
“… Economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.” — Ayn Rand, Capitalism: The Unknown Idea
The problem is that wealth can buy political power and the competition to buy power has accelerated in recent decades – see Cost of Election. The total costs (Congressional and Presidential) for Federal elections from 1998 were less than 3 billion dollars. In 2020 it was approaching 15 billion dollars.
Any solution to this problem probably needs to be twofold. First we need to make it more difficult to buy politicians. In my view probably the best way to do that is term limits. If a politician legally can’t be re-elected to a 2nd consecutive term then he or she has a lot less to sell. Even if special interests spend money to elect a candidate to Congress they don’t have a lot of control over a person whom they can’t help re-elect. Maybe we need to make the occupation of “professional politician” obsolete with continual new faces in Congress?
The second problem is simply huge concentrations of capital. We have Anti-Trust legislation but it doesn’t seem to be used much against the really large companies (it seems a lot of times government Anti-Trust lawyers go after smaller companies that don’t have as much resources to fight back). It looks like that might change a little in 2021 with a number state Attorney Generals looking to go after Google. I think that is a very good idea!
Whatever we do the general principle is to make it a lot harder to buy political power. If we can do that along with making it much harder to trade with evil empires like Communist China then I think we can benefit from the good things Capitalism brings while avoiding some of the downsides. We need to remember too that the downsides of Capitalism are primarily failings of human nature rather than a failing of Capitalism in principle. Just go back to the beginning of this article and look again at Jonathan Haidt’s “the most important graph in the world.“