Capitalism’s Crisis

by Jeffrey Folks
Issue 211– September 12, 2012

Over the past four years, the left has leveled a ceaseless and unprecedented attack on democratic capitalism. Many influential books and countless articles, including The End of Capitalism by Robert H. Parks, have argued that the death of capitalism is imminent, and many have proposed expanded state powers as the only alternative. Significantly, these expanded powers would reside with unelected federal agencies or global bodies unaccountable to the American people. That is the new social order envisioned by the left, and it is radically authoritarian in nature.

From the perspective of the left, there are a number of obstacles to achieving this global utopia, as they imagine it to be. Prominent among them are the nuclear family, the church, and the free market, and it’s hardly coincidental that these three pillars of democratic capitalism are under attack. As Michael Novak made clear in his magisterial study, The Spirit of Democratic Capitalism, the family, the church, and the free market are factors that exert a civilizing force on society, not just in isolation but in interaction with one another, and as such they stand in the way of those who seek to impose authoritarianism. The role of the breadwinner within a family confers self-respect and impels individuals to excel within a market economy. Religious faith strengthens the resolve of those who are tested in life, and it confers dignity and a sense of permanence on familial relationships. Free and unfettered, the complex interworking of the  family, the church, and the free market supports the most humane and advanced civilization known to man.

The extraordinary success of Western civilization in material terms ensues from a coherent belief system that promotes self-sacrifice for the benefit of one’s present family and one’s descendants. Western civilization, as it has existed for hundreds of years, fosters responsibility and selflessness on the part of individuals who can be assured that their efforts will ultimately benefit their families, their communities, and those who share their values. Effort is enshrined as a source of pride—laxity and idleness are shameful. But this is the case only because there are consequences for failure. Once the welfare state has eliminated those consequences, as now it largely has, idleness ceases to be shameful.

Indeed, the very notion of the young man as “breadwinner” is rapidly disappearing from our cultural vocabulary. Google the word “breadwinner,” and you will discover 2,620,000 results. The phrase “food stamps” brings up nearly four times that number of entries. The government is now not only the breadwinner the last resort but the primary and permanent breadwinner for approximately one fifth of American households.

Food stamps do not tell the whole story, however. Another fifth of Americans are heavily dependent on other forms of government assistance: child credits, earned income credits, public housing, subsidized school lunch programs, and, with the arrival of ObamaCare, subsidized healthcare. For almost half of Americans, those who live in poverty (the 15% with incomes below $23,050 for a family of four) or in relative poverty (at or below 200% of the poverty level, with family incomes below $46,100), there is a disincentive to improve or to advance because benefits are tied to income. A family in which a single mother earns $30,000 annually would receive benefits enough to discourage the presence of a second earner. It is precisely this sort of calculus that has led to the demise of intact families and, with it, an explosion of failure in school, drug use, crime, and youth suicide.

In short, America has become demoralized as a result of government intrusion and now suffers a crisis of confidence. Part of the solution is the gradual elimination of national government welfare, which over time would compel families to rely on breadwinners and once again to reward responsibility and effort. And the elimination of welfare would necessitate a return to the belief system that Novak associates with democratic capitalism. But this, of course, is what the American left, including nearly every member of the Democratic Party now serving in Washington, adamantly oppose. What the left envisions is an America that is neither democratic nor capitalist.

Obama has done all he can to undermine our democratic institutions and entrust power to unelected department and agency heads. He has increased federal power over healthcare, education, energy, financial transactions, consumer affairs, and media. In place of the family and church, the state now decides on matters pertaining to pre-natal care, childcare, education, and the definition of marriage. To an unprecedented extent, the state intrudes in higher education, now deciding on the awarding of college fellowship, student loans, and job placement after graduation. Once an individual enters the workplace, the state referees decisions concerning promotions, usually on factors other than merit. If the left has its way, the state will also determine where retirement funds are invested and how they will be disbursed—and not necessarily to the individuals who earned them.

In the egalitarian state envisioned by the left, the church becomes just as irrelevant as the family. When the church dares to make its views heard, it is silenced or overruled. The Obama administration’s brazen response to the Catholic bishops over abortion funding indicates just how far the left is willing to go. From now on, whenever the church steps into the public sphere, whether in regard to abortion, school prayer, vouchers for parochial schools, or in defense of traditional marriage, it will be marginalized. The left is determined to prevent religious beliefs from influencing policy on these and other significant social issues, all of which are viewed as the sole province of the state.

Equally, Obama has labored to undermine the free market. In less than four years, he has extended regulatory control over healthcare, financial services, energy, education, and other majors sectors. He has increased the power of unions, going so far as to argue that an appointed agency, the National Labor Relations Board, has the right to determine where a corporation like Boeing can or cannot do business. As part of the Dodd-Frank legislation, he has empowered the SEC to demand unprecedented reporting of corporate information relating to conflict minerals and payments for overseas resources. It is hard to see how either of these issues fall under the legitimate jurisdiction of the SEC or any government office except in so far as the left wishes to remake capitalism into an instrument of social justice.

Fortunately, reports of the death of capitalism may be somewhat exaggerated, as are reports of the death of the church or the nuclear family. Obama’s single term as president may well represent the high water mark of leftist influence in American politics. According to Rasmussen polling, only 28% now believe the country is headed in the right direction. Those polled may not understand precisely why this is so, but they sense quite clearly that there is something very wrong with the nationalization of healthcare, the excessive power of federal agencies, the return of welfare without work requirements, and the attacks on those who have been successful through their own efforts.

The great majority of Americans still believe in democratic capitalism. It may be that the next few weeks will represent the last great gasp of leftist extremism in America before the left is relegated to insignificance for a generation at least. Clearly, we stand at the edge of an abyss, but it is not democratic capitalism that has lies senseless below—it is the American left, which over the past four years has shown itself for what it is. On November 6, the American people will cast their votes in favor of democracy and capitalism, and against the godless authoritarianism of the left.

Jeffrey Folks is the author of many books and article on American culture including Heartland of the Imagination(2011).