The financial meltdown of 2008 prompted many of us to look back to the decades after WWII for guidance—when Glass-Steagall kept banks in check, when labor unions had bargaining power, when a family could buy a house and live comfortably on a factory worker or a postal worker’s salary. Things seemed to be going well back then.
It was a time when the wealthy paid their fair share—the upper income tax bracket under Eisenhower was 90%. And there were jobs, and good paying ones—at least for some. In hindsight, it seemed like the “Golden Age” of American capitalism, when it seemed the economy worked for most people. The TV series “Leave it to Beaver,” which featured a generic, white, middle class family living in comfort in a generic, white suburb, furthered the myth that everyone in America could live a comfortable life if they showed up at work and paid their bills. For a large chunk of the population, of course, this wasn’t the case.
Banks and corporations constrained themselves after the Great Depression and WWII. Then, chomping at the bit to increase profits, they began to find ways to game the system. By the 70s, things started falling apart. Corporate globalization caused massive deindustrialization and the outsourcing of once good paying jobs, and the financial sector began its highjacking of the economy. The problem, the Golden Age myth would have us believe, was that bad capitalists and bad bankers took over what was really a good system. If greed and bad behavior are held in check, the thinking goes, then capitalism really is the best economic system, synonymous with freedom, democracy and the American Way.
The myth vs. the reality of the post war era
In his recent article in ZCommunications, Paul Street debunks the “Golden Age” myth and sheds light on the failures of capitalism during this period. He writes that, during the entire post war era, 10% of the population—20 million Americans—experienced no progress at all and deep poverty remained entrenched. Drawing on Judith Stein’s 2010 book, Pivotal Decade: How the United States Traded Factories for Finance during the 1970s, Street provides the following statistics:
As the nation spent billions to put astronauts on the moon, millions of Americans remained ill-clad, ill-fed, and ill-housed. The median U.S. family income in 1968 was $8,362, less than what the Bureau of Labor Statistics defined as a “modest but adequate” income for an urban family of four. The Bureau found that 30 percent of the nation’s working class families were living in poverty and another 30 percent were living under highly “austere” conditions.
U.S. industrial capitalism at its “golden” best was no land of milk and honey for millions of Americans on the wrong end of capital’s constant drive to extract value from working people, the broader community, and the Earth. Thanks to its rapacious and wasteful extraction of wealth from the natural environment, moreover, the profit system had already generated what numerous left and other U.S. environmentalists were already describing as an ecological crisis (see Barry Commoner’s haunting 1971 book The Closing Circle).
In support of the idea that the problems with capitalism are systemic, Street quotes Yale trained economist Richard Wolff:
As Wolff explained two years ago: “Historical and contemporary records overflow with blame variously heaped on the illegal acts of financiers, corporate executives, corrupt state officials, union leaders, and ‘organized crime’ for causing capitalism’s cycles and crises. . . Pinpointing ‘the bad guys’ perpetuates the ancient art of scape-goating, deflecting blame on convenient targets when in fact the system is the problem. Capitalist societies can continue to monitor, identify, regulate, and prosecute economic misdeeds, but doing so never will prevent cycles and crises. Overcoming the systemic roots and nature of capitalist crises requires a change in the economic system.” (Wolff, Democracy at Work).
Can we change the American economic system?
Banks and corporations have no interest in doing so. Republican and Democratic politicians and government officials, most of whom serve their interests—and are rewarded handsomely for their efforts—have no interest in doing so. The American people, however, who continue to suffer the economic, social and ecological consequences of this rigged system, eventually, may want to try something different.
For starters, Wolff feels we can cure capitalism by bringing democracy to the workplace. “We would have stores, factories and offices, in which all the people who have to live with the results of what happens to that enterprise, participate in deciding how it works.” He recommends moving from the traditional top down, corporation—that squeezes workers in order to funnel money to CEOs, shareholders, and Wall Street banks—to cooperatives, where income is more equitably shared, and where decisions about what to produce are made democratically. Good news: there is already a strong cooperative presence in this country to build on.
As an answer to the current unemployment problem, if the private sector won’t provide jobs, Wolff says, then the government needs to do it—and he is talking 15 to 20 million jobs. The lion’s share of those jobs would address climate change through green infrastructure projects—building clean mass transportation, building green energy systems, retrofitting buildings, etc. This is a no-brainer, but vehemently opposed by a monied class that refuses to pay taxes to be used for the public good.
Wolff offers another solution for the unemployed. He would do what Italy does. If you can get ten unemployed people together and start your own cooperative business, the Italian government gives all of you your unemployment benefits in a lump sum payment to fund your venture.
To see more of Richard Wolff, and hear more of his ideas, check out his appearances on Bill Moyers & Company here and here.
“Free market” capitalism (which relies heavily on a corporate nanny state) has brought us American imperialism, endless war, Orwellian government surveillance of our private communications, and life threatening climate change. It’s time liberals and progressives realize capitalism isn’t the only game in town. There are ways to organize an economy so that it serves the interest of all, not just the most aggressive and avaricious among us. We can start by learning more about the Nordic democratic socialist model, which provides a good standard of living for everyone in those countries, and expanding the democratic, cooperative workplace here at home. We need to shift our consciousness from believing a competitive economy—in which everyone is supposed to have (but in reality doesn’t have) a shot at success— is the best economy, to knowing that a more humane, peaceful economy—in which everyone has his or her basic needs met, and economic activity is channelled for the public good—is a recipe for saving ourselves and the planet.