Sunday, Oct. 12, 2008 | 2 a.m.
Given a choice between socialism and capitalism, I think I would like to try the first one.
We seem to be reaching a defining moment in the economic history of the United States. Not since the stock market crash of 1929 have the people in this country been so helpless to act in their own best interests when it comes to matters financial. Most of us seem unable to affect our own lives because the economic fortunes of the big guys appear to take precedence over our own.
I am not saying that is true, it is just the way it seems. We wake up each day to see the stock market, which determines the values of our 401(k)s and other retirement vehicles, on a roller-coaster ride that appears mostly downhill. There are wild intraday swings of hundreds of points during which we know someone is making a financial killing but we also know that it isn’t us because most of us are just trying to hold on.
And while all that is going on, we hear the federal government is working to get hundreds of billions of our dollars into a pipeline that supposedly will head our way at some point, maybe, but that it all takes time. So we wait and watch. And while we wait, we watch our accounts become worth less and less until, who knows, they become worthless?
That is our capitalistic system at work. Wait, that’s not quite accurate. Had we let capitalism rule the day, the auto industry would be gone, the banking industry would be either gone or on life support, and this industry known as tourism in Las Vegas would be in such an upheaval that we wouldn’t recognize it when the dust cleared, assuming we were still here.
You see, capitalism can be rather brutal. When it comes to capital finding the high or low water marks in this world, there is a take-no-prisoners approach, prisoners being defined as the people who live and work in these industries and who have depended upon our banking institutions to provide stability. All that would be gone if the markets had their way.
So, what about this socialism thing? When I was much younger, we were taught that capitalism was good and socialism was bad. Of course, when I was much younger, socialism was a concept in which the government ran the engines of growth and was charged with delivering to the people the necessities and desires of life. Innovation, ingenuity and self-determination were considered victims of a socialistic system.
In short it was capitalism good, socialism bad.
I think if the question were asked today whether it was a good thing or a bad thing to have the federal government step in and try to right these wrong markets, to steady the foundering ships of the banking industry and to stave off the personal economic devastation that comes when people lose their homes, their life savings and their jobs, the answer would probably be a resounding “bring it on.”
And, yet, there is still a chorus of Americans who are decrying the government’s attempted intervention as the next big step toward socialism. As if capitalism is serving us so well right now!
I think the answer is one of definition, not of ideological persuasion. Clearly, if you matched the United States of the 20th century up against the communists in the USSR, China or Cuba, there is no question which was the preferable economic system. And if you matched us against the highly taxed countries of Europe, whose socialistic tendencies tended to break the backs of their taxpayers, we would win that contest too.
But, in 2008, defining the government’s activities in and around the boardrooms of our banking and financial industries — as they are talking about, as we speak — is a far cry from the socialism that scared us so much just a few decades ago.
In this global economy, most of our major competitors are sponsored, funded or otherwise encouraged by the governments in which these competitors reside. Cheaper money, more workable regulations and the political and moral suasion of the good offices of governments is a difficult combination for purely private American business interests to overcome. And, as a result, we often don’t.
Having the government, on behalf of the taxpayers, buy into our largest companies does a couple of good things. It provides instant liquidity and it gives the government a seat at the table so it knows much better and much faster the status of our economic engines. I didn’t say control of those companies, just a seat.
I am having trouble understanding why this is a bad thing in today’s world. Instead of Warren Buffet — and even he doesn’t have enough money to bail out what ails our economy — being the only source of capital for these companies, let the taxpayers in on the same opportunity. In the end, if we do it right, we can actually make money in this capitalistic world while providing the kind of oversight that should prevent the inevitable excesses of capitalism that led to the meltdown that has gripped us so hard.
Nobody I know expects this thing to end anytime soon. When it is over, there will most likely be different players in the industry we know in Las Vegas and different owners of the industries that make the United States what it is.
There will also be good and decent people whose lives have been torn asunder who just couldn’t get out of the way. That’s how life changes. Do you think it was any different for those millions of Americans in bread lines in the 1930s?
What we shouldn’t do, though, is fall prey to the words we have come to fear. Forget about capitalism and socialism as we once defined those terms. Let’s look at what we need to get through this mess and get it done.
The first thing we need is the smartest people around to lead us. The next thing we need is for the rest of us to not let the ignorant among us paralyze us by the use of words. Words that have no meaning in the middle of a meltdown.
Brian Greenspun is editor of the Las Vegas Sun.