In a Gallup poll last year, only half of 18 to 39-year-olds in America viewed capitalism positively, down from 66 percent in 2010. Young adults’ opinion of capitalism over the last decade has deteriorated to the point where socialism is tied with it in popularity.
By Shivaji Sengupta
I, too, sign America.
I am the darker brother.
They send me to eat in the kitchen
When company comes,
But I laugh,
And eat well,
And grow strong.
I’ll be at the table
When company comes.
–Langston Hughes, “I, Too”
Way back when we were students in India, we used to hear chatter about capitalism in America. Mostly bad things like “they exploit the poor, illegal aliens who come from Mexico as farm workers…” and so on. Having come here, along with thousands of other Indians in the late 1960s, we began to experience first hand the tremendous wealth capitalism brought to this country. My first taste of American riches was subliminal. I “saw” wealth, did not “feel” it. Coming here for “higher studies,” as they say back home, all I did then was study hard (with occasional, unrequited longing for sensual women). The only direct way I experienced the value of capitalism was through food. In India we had never experienced the gamut of grocery stores and restaurants with their unlimited varieties of unlimited food. Not only were they there, they were cheap. When I arrived in New York City in 1968, I was all of 96 pounds. Now I am 178! Capitalism!
Of course, we all know what capitalism is, what it entails. But just to refresh the memory, and to provide context for today’s discussion, capitalism is an economic system managed by those who are wealthy, who use their wealth to produce goods with a minimum of government restrictions that people buy. The capitalist system produces profits that make capitalists even richer than before, with some wealth trickling down to the common people. Like the student I’ve described before, I hardly felt the real benefits of capitalism — except food and some entertainment. Indians who had come before me and had “settled down,” told me to keep my head down and study hard. The benefits of capitalism will come.
The American system of free-market capitalism has generated the world’s greatest economic growth, lifted millions of people out of poverty and achieved the highest standards of living. And yet, fast-forward to the twenty-first century, people are saying different things about capitalism in America.
If you ask America’s corporate executives, their answer is that American Capitalism is working well and would even work better if there were fewer government regulations and if taxes were lowered.
If you ask America’s middle class, their answer is that American Capitalism worked better in the past but now it is harder to finance a middle class lifestyle given the high costs of sending students to college and taking care of their parents who failed to save enough money for their retirement.
If you ask the workers, their answer is that they haven’t improved their earnings since the 1980s but their expenses have risen dramatically and they can only survive with a credit card and rising indebtedness.
If you ask the 15% of our population living in poverty, their answer is that they can’t find a decent job and they survive on food stamps, food kitchens, clothing handouts, and cheap housing or even homelessness.
Yet all of them – er Us – are living within an economic system called capitalism.
Obviously, something is wrong. We have been hearing for quite some time now that, on the whole, Americans are worse off than they were before Ronald Reagan. Worrying statistics abound. 44% of all U.S. workers ages 18 to 64 hold jobs with median hourly wages of $10, says the Brookings Institution. That’s a total of 53 million people struggling to make ends meet. What’s more, 15 to 20 percent of men ages 25 to 54 are absent from the workforce. In addition, national income from wages earned from labor has been declining since the 1980s, according to the McKinsey Global Institute. This has contributed to income inequality that is now greater in the United States than in other advanced economies, notes the Pew Research Center. Making matters worse, after decades of increases, American life expectancy has begun to decline in the last few years primarily due to drug overdoses, alcohol abuse and suicides, reports the American Medical Association. Depression and despair primarily associated with economic hardship is suspected as the principal cause.
The above scenario has been creating the impression that the American economic system is unfair, where 40% of the people own 99% of the wealth. In a November Gallup poll, only half of 18 to 39 year-olds viewed capitalism positively, down from 66 percent in 2010. Since then, young adults’ opinion of capitalism has deteriorated to the point where socialism is tied with it in popularity.
Small wonder then that in the elections of 2020 there was a conscious effort made by progressive Democrats to adapt some positive aspects of democratic socialism, the kind one sees in the Scandinavian countries like Denmark, Norway, Sweden and Finland.
A majority of Americans shudder at the possibility of America turning into a Sweden. It’s what doomed Bernie Sanders’ presidential bid. Now that Joe Biden is president, the Republicans led by Donald Trump are doing their best to raise the specter of socialism for American voters.
Yet, as I have shown before in these columns, socialism and socialist democracy are two very different economic systems. Take Sweden, for example. Yes, taxes in that country are huge. People earning over $80,000 a year there pay 57% in tax, as opposed to 37% that Americans earning over $550,000 pay yearly. But consider what every Swede gets in return: free tuition up to the bachelor’s degree; free medical and other social services; substantial unemployment benefits, and money from the government to live a decent lifestyle.
Despite the socialistic structure, Sweden has many billionaires because business people not only get an unfettered business environment, their livelihoods are protected by the government, should their businesses fail. Whether you are a billionaire or not you still get free medical services, your children a free education.
An average Swedish family consisting of father, mother and two children, earns in the neighborhood of $50,000 a year, owns a three-bedroom home, two cars (of which one could be a Volvo). They can afford two vacations a year.
Yes, there are built-in problems with the above scenario if you are an American. You can’t have a doctor of your choice, nor can you go to a hospital of your choice. People, not inclined to work, tend to take unfair advantage of the system, tending to drive up government expenses, and hence, taxes. But those Americans who are raising issues like quality of life and the “happiness index” are beginning to get disillusioned, not necessarily with capitalism, but with what is being called “crony capitalism.” Crony capitalism happens when politics and capitalism are mixed; when the government barters incentives to wealthy businessmen who make substantial political contributions to the campaign of a sitting president. This is what happens in many countries in Asia, Africa, Russia, and apparently now here during Donald Trump.
I am looking forward to a return of American style capitalism of the 1950s, a combination of free enterprise with enough governmental regulations so that there is no overwhelmingly unfair distribution of wealth like there is now.
To achieve this, we will need to adopt a humanistic economic system like the one Nobel Laureate economist Paul Krugman advocates: “There are no perfect answers to the inevitable sacrifice of some freedom that comes with living in a complex society,” he says. “Utopia is not on the menu. But the advocates of unrestricted corporate power and minimal worker protection have been getting away for far too long with pretending that they’re the defenders of freedom – which is not, in fact, just another word for nothing left to lose.”
Let us take stock of the capitalism we have lost, and build back better.
Shivaji Sengupta is a retired Professor of English at Boricua College, New York City. He has a Ph.D. in English and Comparative Literature from Columbia University and has been a regular contributor to The South Asian Times. He is a member of the Brookhaven Town Democratic Committee.