A persistent myth exists that impedes the election of many good Democratic canditates: Republicans are better at capitalism than Democrats.
Horsefeathers and balderdash!
It is time to put this persistent fairy to bed, one that also explains why too many voters incorrectly give Trump an edge over President Biden when it comes to the economy.
The truth is Republicans do capitalism badly – very badly. But a greater truth is that Democrats once did and again can do capitalism quite well.
Destroying the Mythology of Libertarian Economics
And yet the myth still persists that Republicans are better than Democrats on the economy. Too often when a pollster asks which of two major political parties (and by extension, their candidates) would do a better job on the economy, the all-too-frequent reply is “Republicans.” Sadly, having that ”R” after a candidate’s name is often enough to shut out reality.
History, however, proves otherwise. In fact, it makes the progressive liberal case:
*The Great Depression as well as the 2008 financial crash was due directly to Republican libertarian economic policy. A major factor is wanton deregulation and the failure to pursue necessary anti-trust litigation.
*Republican Party economics is not about honest wealth creation but economic plunder and pillage.
*Since the Reagan Era,, Libertarian, Neoliberal economics has resulted in stagnated wages and job exportation.
Still, Republicans retain the confidence of much of the electorate. This is partially accomplished by constantly branding Democrats as Soviet-style socialists. It is also partly accomplished by progressives that too readily embrace the Socialist label – Democratic Socialists.
The Democratic Socialist brand too easily lends itself to mischaracterization. It is not Soviet-style socialism at all. Instead, Democratic Socialism believes in the peaceful transfer of power, certain property rights and unlike authoritarian Marxism has a place – albeit somewhat limited -- for market place economics. Indeed, several of its better known adherents were strongly anti-Soviet (most notably, Michael Harrington). But because many Americans are not aware of these differences the Right readily equates the two in order to confuse voters. This tactic has worked with devastating effect among Latino voters in Florida (particularly those with Colombian, Cuban and Venezuelan roots).
But a greater problem is the so-called centrist Democrats that embrace Neoliberal economics. These are Democrats that are open to austerity, deregulation and Milton Friedman monetary policies. Senator Joe Manchin (D-WV) and Representative Dean Phillips (D-Mn) are two good examples. They have driven many New Deal legacy Democrats to embrace the Democratic Socialist brand.
It is time to to turn the tables on GOP economics. It is their ever increasingly radical populist libertarianism that has much in common with authoritarian Marxism. As I have written in Commissar Conservatives: How Laissez-faire Libertarianism Is Disturbingly Similar to Communism:
Indeed, if any economic outlook creates fertile ground for authoritarian socialism, it is to be found within the current trend of conservative economics. But it is neither socialism, nor communism that libertarian conservatives fear. Indeed, their nightmare is the emergence of a better capitalism, one that is made fair and just through reform; one that is less prone to the tyranny of those only interested in pursuing reckless, unreasonable self-interest.
As well as:
[For libertarian conservatives] Labor is thought to be as nothing but a commodity, stripped of human dignity, something to be purchased, used, and disposed of once the worker’s utility is exhausted. The individual laborer’s human value is no longer a factor to be considered in his or her employment. The only laws to be applied to him or her are the laws of a fictional self-regulating market.
If any economic outlook creates fertile ground for authoritarian socialism, it is to be found within the current trend of conservative economics.
Stakeholder Capitalism: The Key To A Better Capitalism.
But would we do so by distinguishing between their reckless Neoliberal libertarian capitalism and our Keynesian, stakeholder capitalism which is fairer and sturdier.
Here is plea to my Democratic Socialist friends: It's time for progressives to put aside the talk of democratic socialism and re-embrace capitalism. As I argue in my book, Commissar Conservatives that the key to Democratic success is putting aside both Democratic Socialism and Neoliberalism and to again embrace Roosevelt-Truman Stakeholder Capitalism.
What is Stakeholder Capitalism? It is simply put, a better, more responsible form of capitalism. It replaces the Milton Friedman dogma of shareholder primacy (a corporation’s only duty is to maximize profits for its shareholders) with the belief that corporations owe a duty of responsibility to the community in which it thrives. Why? Because the corporation’s customers, employees and neighbors all have a stake in the enterprise’s behavior. As Adolf A. Berle, Jr. and Gardiner Means wrote in their 1932 opus, The Modern Corporation and Private Property:
The rise of the modern corporation has brought a concentration of economic power which can compete on equal terms with the modern state - economic power versus political power, each strong in its own field. The state seeks in some aspects to regulate the corporation, while the corporation, steadily becoming more powerful, makes every effort to avoid such regulation...”
Continuing directly:
The future may see the economic organism, now typified by the corporation, not only on an equal plane with the state, but possibly even superseding it as the dominant form of social organization. The law of corporations, accordingly, might well be considered as a potential constitutional law for the new economic state, while business practice is increasingly assuming the aspect of economic statesmanship.”
A Return To A Better Capitalism.
Here is plea to my “centrist” Democratic friends: It’s time to abandon Neoliberal economics. Yes, Jimmy Carter stood up for human rights, Bill Clinton, revived the economy and Barack Obama gave us the Affordable Care Act – “Obamacare.” But these successes came with an abandonment of traditional Democratic Party economic principles. Neoliberalism has sent U.S. manufacturing overseas and brought forth greater economic inequality. If anything, the Donald Trump owes much of his popularity to a backlash to Milton-Friedman-F.A. Hayek Neoliberalism.
Here is my argument to my Democratic Socialist friends: Just about everything good you want such as Medicare for All, a Green New Deal (FDR was an unapologetic environmentalist) and a return to responsible economics can squarely (and more effectively be argued) within the parameters of Stakeholder Capitalism capitalism. The true center is most truly represented by progressive liberal Democrats such as Elizabeth Warren, Lucas Kunce, Katie Porter, and yes, President Joe Biden -- all of whom are the new prophets of Stakeholder Capitalism.
In order to consistently win elections Democrats must reclaim the mantle of capitalism by explaining that Republican capitalism is insufficient and ruinous. Our vision of capitalism brings a sturdier and fairer form of wealth creation. The track record of both political parties provides all the necessary proof.
This is how Democrats destroy the myth that Republicans are better at economics. This is how to erode a chunk of Trump’s base.Destroy this myth and you destroy the GOP’s greatest strength.
To be continued with upcoming posts on Stakeholder Capitalism. But next, the first Franz Von Papen Award!
Frank Cocozzelli is the author of Commissar Conservatives: How Laissez-faire Libertarianism Is Disturbingly Similar to Communism.