Capitalism will always survive, by Jeanette Strong

“Capitalism will always survive in the United States as long as the government is willing to use socialism to bail it out.” Nathra Nader, Lebanese immigrant and Ralph Nader’s father.

In 1776, the year the Declaration of Independence was signed, Adam Smith published a book titled “The Wealth of Nations.” This was a breakthrough in the field of economics. The prevailing economic policy at the time was mercantilism, the theory that “trade generates wealth and is stimulated by the accumulation of profitable balances, which a government should encourage by means of protectionism.”

Smith argued that protectionism was counterproductive; instead, a free stream of goods and services would create wealth. He wrote that regulation should be kept to a minimum since the “invisible hand” of the market would automatically regulate the production of goods and services. This theory was the foundation of modern capitalism, and Smith is called the “Father of Capitalism.”

However, Smith recognized that special privileges given to the wealthy would threaten the economy and society itself. In his other classic work, “The Theory of Moral Sentiments,” 1759, Smith wrote, “The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our morals.”

Smith also recognized the need for taxation to support government functions such as defense, criminal justice, education and other services. “The subjects of every state ought to contribute toward the support of the government ... in proportion to the revenue which they respectively enjoy under the protection of the state” (“Wealth of Nations”).

Today, many supporters of capitalism seem to be at war with what they call socialism. In reality, almost every country’s economy is a blend of both systems. Many policies we take for granted started as socialist ideas: the 40-hour work week, paid sick leave and vacations, child labor laws, safety codes for businesses, unemployment and disability insurance, and Medicare and Social Security.

These policies improve all our lives. When each of these policies was first proposed, conservatives fought them as being socialist and communist. Today, most of us would be outraged if these benefits were taken away from us.

Republicans claim that socialism will destroy our country, but there’s one form of socialism they not only approve but practice. When businesses such as General Motors receive special tax breaks (socialism) while laying off employees (capitalism), Republicans are just fine. A Feb. 11, 2019, article in the Guardian explains this: “Trump offers socialism for the rich, capitalism for everyone else.”

Trump himself used bankruptcy laws several times to protect himself and pocket millions, while leaving employees, customers and vendors out in the cold. Again, socialism for the rich.

In Iowa, Sen. Joni Ernst, R-Iowa, said, “Our freedoms are under attack because the radical left will stop at nothing until socialism has spread from coast to coast. Let me be clear: Socialism has no place in the Hawkeye state or America, and I will stop at nothing to protect our Iowa values.”

Ernst said this even though Iowa has demanded “big fat federal government subsidies for corn ethanol — among other payouts and market-distorting government interventions that Republicans might in other contexts smear as ‘socialist.’” (Washington Post, July 25, 2019)

Trump is spending billions of dollars of taxpayer money to bail out farmers and failing industries such as coal and nuclear power, rather than letting these industries rise or fall on their merits. Republicans cheer these socialist actions, while condemning ideas such as free college tuition. They accuse liberals of wanting a “nanny” state such as exists in most of Western Europe, Australia, New Zealand and Canada. These countries are strong, prosperous socialist democracies.

In contrast, conservatives tend to feel comfortable with “daddy” states, authoritarian countries such as North Korea and Russia, where the strongman ruler controls everything in return for promised security. This is the model Trump loves, which is why he admires the dictators of these countries so much.

As Nathra Nader said, capitalism only works because the government keeps bailing it out when there’s a problem. That’s OK. Sometimes government should help. What’s not OK is Republicans’ refusal to admit this, attacking any government program they don’t like as socialist, while using socialism to enrich themselves.

One final thought. The author of the “Pledge of Allegiance,” Francis Bellamy, was a Christian minister and a socialist. Think about that the next time someone tells you socialism is un-American.

Jeanette Strong, whose column appears every other week, is a Nevada Press Association award-winning columnist. She can be reached at news@lahontanvalleynews.com.