If Not Communism or Capitalism, What?

[Capitalism] is not a success. It is not in­telligent, it is not beautiful, it is not just, it is not virtuous — and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed…. — John Maynard Keynes

Keynes wrote those words in 1933, one of the worst years of the Great Depression, when their truth was more clearly evident. If you are one of those who has profited from capitalism, perhaps their truth will not seem evident at all.

The failure of Communism need not be demonstrated to anyone who has read the papers lately. About capitalism let me note a few statistics: Between 1978 and 1987 the number of working U.S. citizens in poverty grew by nearly two million, or 23 percent, while the number of those who work full time and still remain in poverty grew by 43 per­cent. Meanwhile the top one percent of our citizens grew 50 percent richer and the bottom 20 percent became eight percent poorer. In 1988 that bottom 20 percent received only 4.6 percent of the national income while the rich­est 20 percent received 44 percent, the lowest and highest percentages respectively since the Census Bureau first reported them in 1947. The richest one percent also owns about 60 percent of all corporate wealth.

Our government’s official poverty line is $9,435 for a family of three (in 1988 dollars), but that line is based on family needs calculat­ed in 1955 when the average family spent eight percent less on rent (34 as against 42) and many fewer single parents had to pay for child care. An economist writing in The New York Times (April 26) estimates that the pover­ty line should now be closer to $14,200. This would up the number of Americans in poverty from 33 million (the figure cited and lamented by the U.S. Catholic bishops in their 1986 pastoral on the economy) to some 50 million. There are also the increasing numbers of homeless and hungry, whose poverty is more accurately described as destitution. Is this a record of success? I think not.

What do we mean by capitalism? The best definition, which you will find in some diction­aries, is the most obvious one, namely, an economic system in which those who control capital make the key decisions. Note that I did not write “own capital” — because those who, for example, own the stock of a corporation, even if they were to vote on the undemocratic basis of one vote per share rather than the democratic basis of one vote per person, usually do not control the corporation. That control does not usually even rest in the board of directors, but rather in the four or five men (rarely any women) who constitute the execu­tive committee of the board and who, by their control of proxies and inside information, con­trol both the election of the board and its key decisions. This at least is the customary sce­nario in the corporations that dominate our economy, set the pattern for its operation, and dictate much of our politics as well.