Capitalism With a Conscience

November 18, 2011

During the past few weeks Americans have witnessed increasing crowds gathered at Wall Street — the symbol of American capitalism — to protest the excesses of capitalism. It appears that whether in Athens, London, Madrid or New York, two fundamentally difference camps are fighting an ideological battle between savage capitalism and capitalism with a conscience. In the former only a few get ahead and prosper but in the latter we are all given an opportunity to prosper.

Those who are critical of capitalism — I call it “savage capitalism” — point out that many people in the middle class and lower middle class are left behind with little to no chance to increase their standard of living. They point to ridiculously large bonuses paid to Wall Street bankers and corruption in the American political system where money buys access and that access leads to special favors via the U.S. tax code. The end result of savage capitalism is an economic system where only the few and well-connected get rich.

And then there are those like billionaires Bill Gates, Warren Buffet and the founders of Google and eBay who believe that capitalism is the world’s best model for economic growth and for raising standards of living for everyone but it cannot and should not leave those who are weaker behind. Capitalism, they argue, must have a conscience. The millions of people who have earned a good living from jobs working at companies like Boeing, IBM, General Motors and Apple are products of American capitalism. Start-up companies like Groupon and Facebook are products of capitalism’s core tenant: rewarding innovative and creative risk takers. And yet, those same workers who worked for companies like Enron, Bear Stearns and Lehman Brothers, whose directors were either corrupt, greedy or both, lost everything. The latter group paid the price of savage capitalism.

America is now facing a historic moment in its life as a fairly young nation. It faces a $15 trillion debt, loss of millions of jobs (unemployment stands at 15% in the inner cities), a weak housing market, a population that is aging and needs more services and a resurgent China. What system America adopts to save itself is the key question that will be debated between President Obama and his Republican opponents.

President Obama will make the case that America has practiced savage capitalism for too long and left millions of people behind. His opponents will argue that capitalism works but only if you teach someone how to fish — not just to give them fish. This in essence is the major difference between the philosophies of President Obama and his opponents: does America simply give out money to those who need it or does America teach its citizens how to fish so they can remain independent and productive? Striking the right balance within capitalism’s extremes is the key to resorting faith in our system of government.

In dictatorships, like those we witnessed in Libya, or we see today in Iran and North Korea, the dictator believes that he knows best and simply gives away the country’s wealth to whomever he wants so he can stay in power. In Norway, Sweden and South Korea the government does take care of its vulnerable citizens but its fundamental goal is to teach Norwegians, Swedes and South Koreans to fish and be independent.

America needs capitalism with a conscience: a system in which every American has a level playing field in which to prosper. Groups such as “Occupy Wall Street” should be allowed to protest but in a country where the rule of law is most important, these legitimate grievances should find their way into the halls of Congress: one whose doors are open to every citizen. My mother belongs to one of the most powerful groups in the United States: American Association of Retired People. They do not demonstrate because they are too old, they do not shout because they are too weak but they have a very powerful voice in Washington because they are united — each month they give money to the AARP, who then uses this money to lobby for issues that matter to people like my mother such as health care or cost of medicine. This is what happens in a democracy and this is what these young demonstrators must do: to work within the laws of the land and secure their rights in a peaceful manner.

One of the first things “Occupy Wall Street” demonstrators should lobby the U.S. Congress for is democratizing innovation so that not only venture capitalists in Silicon Valley but everyone in America can participate in the wealth-creating enterprises like Facebook or Google. This would also be a good starting point for reorienting America’s capitalist system away from savagery to one with a conscience. This means devising a system whereby a bricklayer in Philadelphia or a single mother in Los Angeles or teacher in Washington, D.C. can get the chance to own a piece of Groupon or the next successful IPO.

The economic bonds that bind us together should be based on capitalism with a conscience.

Read the original article in The Huffington Post here