Republicans these days love throwing around words like "socialist" or "Marxist" whenever describing the policies of the democratic legislature and executive. To them, any attempt to address the inherent issues with Capitalism creates inefficiencies and centralizes power in the few hands of government bureaucrats. This is a legitimate fear, as attempts at Communism in other countries inevitably led to dictatorships and inequality. However, their inherently simplistic view of Capitalism, and it's accompanying over the top rhetoric, misses the reality that there truly are contradictions in our current free market system that we must address.
The primary argument in support of a free market economy is that by limiting regulation and government control, goods and services are more easily able to flow to those places where they will be more efficiently utilized. This is done because people have a natural tendency to want to maximize their profit, and in doing so have a natural tendency to utilize their own limited resources as efficiently and effectively as possible. This concept can work quite well in practice. However there is a catch.
When government doesn't redistribute the wealth and regulate business, power and wealth slowly collect in the hands of those individuals most adept at utilizing their resources. This is good, in many ways, as it allows those best suited to move goods around. However, the more that wealth concentrates in fewer hands, the less likely it is that new players with new ideas get a chance to start businesses or develop products. In a capitalist society, no matter how smart and full of ideas you are, if you never get a chance to educate yourself and develop your ideas without fear of starvation, you will never succeed. Likewise, as fewer people hold more power, the likelihood that someone incompetent will control large amounts of power increases. So, at some point Capitalism's tendency to concentrate wealth conflicts with it's tendency to maximize efficiency and innovation.
This is the inherent catch-22 of Capitalism. It works best when the distribution of wealth is more evenly distributed. However, as wealth concentrates, it becomes less and less capable of doing what it does best, namely generate wealth. For this reason, it is imperative that governments enact efficient and effective wealth distribution. This is not to say that planned economies are the way to go.
Instead governments must have these ingredients:
- An effective social safety net that provides for those who cannot afford food, shelter, health care, and the other bare necessities,
- An affordable subsidized education system in which everyone is given a fair education that is able to provide both the skills necessary for success and the broad based knowledge to be a well-rounded person,
- Infrastructure, police, military, and emergency services (which primarily benefit the wealthy, but redistribute wealth to the middle and working classes in progressive tax schemes),
- And perhaps most importantly a progressive tax system whereby wealth is subtly shifted downward while not punishing success (The most critical tax in this case is a large inheritance tax, as inherited wealth is the bane of a successful market economy.)
What Republicans fail to realize is that for Capitalism as a system to work, the Government must redistribute wealth to some degree (perhaps they do realize this, but are more interested in preserving the current power structure rather than crafting an effective market economy.) It is with this understanding that we should attack the policies of Republicans. We progressives are in truth the preservers of Market Liberalism. Republicans are merely aristocrats and plutocrats, and are trying to tear down every little guy with an idea.