In his March 17 Outlook commentary, “Is capitalism moral,” Steven Pearlstein did a good job of discussing the major issues in the debate pitting capitalism against statism. Though his contention that Europe and the United States have moved away from the nanny state (especially under the current administration) is questionable, his bottom-line statement is exactly correct: The real question is not “whether government is doing too much or too little, but whether it is doing the right things.”
In a perfect world, the long-term benefits of the golden rule (doing to others as you would have them do to you) would be obvious, rendering government all but superfluous. However, in the real world, the temptation of short-term gain, regardless of the cost to those around us, is often too great to resist in the absence of governing authorities. Therefore, some government, limited though it might be as envisioned by the Founders, is necessary.
The problem today is that our government is often doing the wrong things, creating a crony capitalism that limits the economic opportunity of all but a favored few. Some statutes, such as the Dodd-Frank financial legislation, attack the wrong “problems,” leaving the real problems unaddressed. The “too-big-to-fail” banks have become, if anything, even bigger than before the financial crisis, and their implicit government guarantees remain essentially unchanged. Meanwhile, the thick pile of regulations has grown extensively under this president. The resulting labyrinth of bureaucracy effectively restricts the entrance of many would-be entrepreneurs to job-creating, prosperity-generating businesses.
John Supp, Mechanicsville
Leaving aside Ayn Rand and other extremists on both sides, the debate is not an existential one about capitalism. Instead, it’s a debate about two separate things: how much regulation capitalism needs in order to function, and how much the government ought to be involved in the distribution of resources. Both are issues of degree.
But Steven Pearlstein is correct that the conservative side of these arguments is trying to create some new, moral space for itself. That’s new because liberals have, by and large, had the better of the moral argument for the past 70 or so years. It’s much easier to sell building a social safety net and providing for the elderly as a moral act than it is to make the selfish pursuit of wealth appear to be the moral thing to do.
Conservatives are stuck with this unpromising pitch because they have failed to make headway in the real arguments about how much regulation and government distribution there should be. And they have failed in large part because they gambled years ago on “starve the beast” — that limiting tax revenue would also limit the size of government. Instead, conservatives taught Americans that they could have a bigger government than they paid for, thus undermining the strongest arguments for a more limited government role.
I am looking forward to the day when we stop playing with big questions such as the morality of capitalism and instead figure out, practically, what we want government to do and how to pay for it.
Robert Dennis, Potomac
Steven Pearlstein’s framework for evaluating the political and moral arguments about capitalism missed a critical dimension of the debate: the pragmatic implications of providing workers a larger slice of the pie.
Two noted advocates of capitalism, Adam Smith and Henry Ford, favored optimizing profits but also paying workers enough to maintain their loyalty. Smith said, “A man must always live by his work. . . . Otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation.” Ford wanted his employees to able to purchase his cars, reasoning that he could sell more if his employees could afford them.
If more companies were to share more of their profits with workers, they would find lower worker turnover and more incentives for greater productivity. The economy would benefit from the extra money that workers would spend to improve their lives, and the resulting economic stimulus would enlarge the market for these companies’ products.
Leonard Zuza, Lusby