It’s not enough that capitalism is under attack by socialists of all stripes, the far left wing of the Democratic Party, and their fellow travelers in most of the mainstream media. It now becomes necessary to defend the most productive economic system in world history with many of its leading practitioners. For example, my friend Kelly Rushing recently brought to my attention the commentary of Ray Dalio, the founder of the world’s largest hedge fund who, in a series of opinion pieces and interviews, has expressed his view that flaws in American capitalism have created destructive gaps in education, social mobility, and income inequality the result of which could be a revolution. And he thinks that inequality has produced populism and ideological extremism. Other business leaders, such as James Dimon, CEO of JP Morgan Chase, share some of these sentiments.
I watched a “60 Minutes” segment with Dalio and heard things like “radical truth, radical transparency”, “redistributing opportunity”, and “capitalism needs to be reformed, it is not sustainable”, but I didn’t hear how he would do this, except by raising taxes on people like him. And people like him get plenty of visibility and air time; the media love having a billionaire hedge fund guy promote wealth redistribution.
Tucker Carlson of Fox News has loudly voiced his own criticism of capitalism, which makes much more sense, although I don’t agree with all of his points either. He thinks that the cultural and social environment of much of America, in particular of rural people without college degrees, can be very grim in spite of what is on the surface a booming economy, and that this fact is being ignored by much of the capitalist “elite” on Wall Street and in Washington. He sees this as primarily a moral issue that is not being addressed, as follows: “….leaders will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool…..Any economic system that weakens and destroys families is not worth having. If you want to put America first, you’ve got to put its families first.” He’s right, of course, but he should also acknowledge that capitalism, when properly understood and implemented, is the most moral of economic systems known to mankind. Former President Bill Clinton said at least one thing that I think made complete sense: “There is nothing wrong with America that cannot be cured by what is right with America”. And capitalism is one of the things that are right with America.
No doubt our system is under strain for the middle class, but my take on it, without being overly simplistic, is that we need more capitalism properly understood, not less. And this should include two things that need to be enhanced so that it can work properly–adaptability and mobility. Adaptability of the education system to better prepare both first time and transitional workers for the 21st century skills that are in demand. Mobility because our entitlement system provides perverse incentives for people who might otherwise move to better employment opportunities, either where the jobs are geographically or where additional training might be of benefit. Without the choices available through adaptability and mobility, the working class cannot take full advantage of the wonders of a capitalist system. But on one thing Tucker Carlson is spot on–no free market system works for long without an underlying moral component; it is the foundational element.