Within our primarily capitalist society, those who understand how their interests can be best served and move to ensure their interests are always addressed will benefit the most from the success of our society. Those who do not risk being the ones to absorb the many costs associated with the negative aspects of the version of capitalism we choose our economy to embrace. Although the sole interest of any modern government in economics terms is the financial wellbeing of its People, countries like the US often fail to focus on this interest. The US Federal government and US State governments pursue the interests of the best funded lobbyists as well as the voting blocks that marginally decide the outcome of elections. In short, the success of corporations and the benefits to trading partners come first with the hope that the interests of US citizens will be served. This lack of a capitalist mindset, i.e. a failure to put our Country’s interests first, translates into a government that loses out on tax income and overspends on foreign commitments, among many other irrational practices.
One major reason our government often fails to embrace a capitalist mindset is that humans tend to think in more direct terms than indirect terms. It is tempting to claim “free market” policies in terms of regulation, trade, and the global economy, for example, are the most capitalist oriented policies possible. It is, however, important to once again recognize a true capitalist will lookout for his, her, or its interests when embracing certain practices and policies. Businesses are against regulation when it affects them, yet they generally encourage regulation when they can use it to undermine competition while “free markets” are all the rage until a bailout or subsidy is expected. Even communist countries like China will claim they are against protectionist policies, though their mostly socialist countries are built on protectionist policies. Because all capitalist entities will more often than not move to ensure they achieve their perceived interests, government must act as a capitalist entity and always pursue policies that ensure its interests are met.
One of the inherent, unavoidable flaws in government as a capitalist actor comes from the fact it must service the needs of all citizens, even in the absence of a potential profit. This is a territory where most private firms cannot and will not go; however, specialized service providers and producers can be more efficient when consumption does lead to revenue. Looking at healthcare, the bulk of society might be better served through the specialized firms capable of reducing cost and increasing quality, i.e. healthcare insurance providers, if the right incentives existed. On the other hand, most elderly, which age might be considered a precondition, the preconditioned, and the poor cannot afford private insurance nor do they fit in any solid for-profit business model. Only in the eyes of government, which is looking out for the long-term health and wellbeing of its population, do these people’s needs fit into a business model.
Furthermore, all modern governments are tasked with ensuring its People’s interests are met. Socialism is the element of government that reflects what interests of the People that government fulfills. Although private industry can more effectively serve most of society’s needs, because most private businesses specialize in providing specific products and services, there are certain functions that should and can be more effectively administrated by government. As a mostly capitalist society, our government does not service nor can it service all of our needs; however, government must recognize it too is part of our capitalist system. Whether government taxes or not, regulates or not, spends or not, etc., it influences all of our markets in big ways. As such, government is a capitalist entity just as individuals and corporations are, though their objectives require a focus on maintaining our long-term interests as a society. Because our government fails to lookout for its interests and act as a capitalist entity, it often creates uncertainty in the markets, thus undermining solid economic growth.
For government to fulfill any of the roles its citizens wish it to undertake, government must embrace a capitalist mindset which requires it to seek out the most efficient, effective solution available. The reason most Americans have received their health insurance through employer sponsored plans is due to the US government offering employers a tax incentive for doing so. As our representatives for a large number of individuals, employers are encouraged, and now required, by the US government to negotiate better prices for health insurance; displacing this responsibility onto employers was and is a very good capitalist approach to providing for the general welfare of the People, though there are faults in how these tax incentives work.
What would be an example of a policy counter intuitive to the capitalist mindset is Medicare Part D. This program adds extra costs in order to privatize this socialist program. In other words, government is not seeking the most efficient, least costly means to achieve its interests. Simply offering massive, sweeping tax breaks to the wealthiest citizens, businesses, and other entities wishing to access the US economy is not something a truly capitalist society would embrace. Ironically, Democratic President Obama’s tax policies, which include proposed measures to offer tax incentives for investing in the US, is far more inline with a capitalist mindset than the Republican stance on simply eliminating tax revenue. On the flip side, we often offer subsidies, which do nothing to address our economic interests, while we also try to fix fundamental economic problems with other costly subsidies without an effective effort to address the underlying issues.
Another example where the US government often fails to pursue a capitalist approach is when it comes to our economic and National Security interests. In order to maintain our National Security, we need strong energy and manufacturing sectors, which are, in particular, labor intensive to our benefit. Unfortunately, our blanket “free trade” deals often leave domestic industries at a disadvantage, even when US workers accept significantly lower wages than they need to maintain a healthy Middle Class lifestyle. (A median income, which diminishes the Middle Class to a poor class, means less tax revenue and, more significantly, far less consumer spending.) This is especially troublesome when it comes to enforcing policies we must undertake like taxes, worker rights, and environmental regulation. The solution has often been to subsidize key industries instead of leveling the playing the field with better trade policies and tariffs that reflect our national interests.
What this has done is create a form of corporate socialism on a global scale that is necessary to maintain the industries most vital to our National Security interests. Coupled with a diminished Middle Class and greater tax “relief” for the wealthy, i.e. shifting the burden of government onto the Middle Class through payroll taxes, our unsustainable economy is headed for a catastrophic collapse. It is, however, views, which directly take on a capitalist tone, that lead us to except harmful policies like blanket “free trade” agreements and undermine our capitalist society. Instead of embracing a capitalist mindset, elements in our government have solely rejected socialist programs for the People, yet their pursuit of a theoretical “free market” has created the inevitable need for corporate socialism in areas where national interests must be fulfilled and where lobbyists can persuade officials to support their causes.
No form of socialism is independently sustainable; however, the faults of capitalism will lead to socialist policies that are demanded by constituents in bad times. By recognizing this reality and working as a capitalist entity looking to primarily achieve its interests, i.e the interests of the People, which can be best served through mutual cooperation where compromise is built on aligning our interests with the interests of other economic partners, a capitalist mindset can help us create better policies that better align private industry and foreign interests with US interests. Moreover, the US and several other Western nations have put themselves on an unsustainable trajectory, which is in no one’s long-term interests, because our governments do not maintain capitalist mindsets, instead they support corporate and international socialism.