Economy & Business

Opponents of ‘Unfettered Capitalism’ Are Fighting a Phantom

Senator Marco Rubio speaks at a Senate Judiciary Committee hearing, March 14, 2018. (Joshua Roberts/Reuters)
We put plenty of restraints on economic activity. What we don’t need is unfettered government.

Enemies of unfettered capitalism, unite!

For as long as I can remember, people on the left have complained about “unfettered capitalism.” Moderate liberals do it, and of course flat-out Marxists do it.

In his new book, A Bit of Everything: Power, People, Profits and Progressive Capitalism for an Age of Discontent, Nobel Prize-winning economist Joseph Stiglitz contends that the only way we’ll be able to confront climate change is through a new social contract.

“Capitalism will be part of the story, but it can’t be the kind of capitalism that we’ve had for the last 40 years,” Stiglitz writes. “It can’t be the kind of selfish, unfettered capitalism where firms just maximize shareholder value regardless of the social consequences.”

Senator Bernie Sanders said earlier this year that “we have to talk about democratic socialism as an alternative to unfettered capitalism.”

History texts insist that the New Deal followed in the wake of the unfettered capitalism of the 1920s. The Progressive Era, we’re told, was in part a response to the unfettered capitalism of the late 19th century and the “Gilded Age.” In 1987, the Milwaukee Journal reported that Soviet leader Mikhail Gorbachev planned “to visit Trump Tower, that glittering monument to unfettered capitalism.” In 2016, The Nation, a journal that has been at war with “unfettered capitalism” for nearly a century, ran an essay explaining that America got President Donald Trump because of “America’s brand of largely unfettered capitalism.”

Recently, the concern with capitalism’s unfetteredness has become bipartisan. Senators Josh Hawley and Marco Rubio have taken up the cause in a series of speeches and policy proposals. Conservative intellectuals such as Patrick Deneen and Yoram Hazony have taken dead aim at unrestrained capitalism. J. D. Vance, the author of Hillbilly Elegy, and Tucker Carlson of Fox News have suggested that economic policy is run by . . . libertarians.

My response to this dismaying development is: What on earth are these people talking about?

If the Progressive Era was a response to unfettered capitalism, did it accomplish nothing? Teddy Roosevelt broke up the trusts, regulated the food supply, created the National Park System, and fettered the railroads. The Labor Department was established (by President Taft, a conservative) in 1913. The Federal Employees’ Compensation Act, enacted in 1916, provided benefits to workers injured on the job. The Longshore and Harbor Workers’ Compensation Act was passed in 1927. And then there’s the New Deal, another famous attempt to slap fetters on the rough beast of capitalism. It created Social Security, formally banned child labor, and established the minimum wage, among countless other restraints on capitalism run amok.

I could go on and on. I mean, I haven’t even mentioned the Great Society.

A fetter is a chain, manacle, or restraint. If you think there are no restraints on the market or on economic activity, why on earth do we have the Department of Labor, HHS, HUD, FDA, EPA, OSHA, or IRS?

The United States has one of the most progressive tax systems in the world (i.e., the share of taxes paid by the rich versus everyone else). If you take into account all social-welfare spending, we spend more on entitlements than plenty of rich countries.

Now, if you think we don’t spend, regulate, or tax enough, fine. Make your case. If you think we should spend and tax differently, I’m right there with you. But the notion that the United States is a libertarian fantasyland is itself a fantasy. I mean, by the Hammer of Thor, every summer we get stories of kids being fined for running lemonade stands without a license.

My frustration stems from the fact that we “fetter” the market constantly. And whenever the fetters yield an undesirable result — such as, say, the financial crisis of 2008 — the blame always lands on eternally unfettered capitalism.

Just to be clear: I’m not an advocate for unfettered capitalism. But I am sick and tired of hearing people advocate unfettered government to fight an enemy that doesn’t exist. And I’m particularly dyspeptic about the fact that conservatives are now buying into the same fantasy.

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