Mom and Pop Capitalism?
Originally written in 2014
[Libertarians: please read about the nation of Libertaria--a Libertarian Paradise]
[Also related: "The U.S. Constitution: Help or Hindrance?"]
[Read this to see that "the good old days" of early capitalism were horrible]
That there is something very wrong about American society today is clear to growing numbers of Americans. But what exactly is wrong? On this there are lots of different opinions.
Mom & Pop Capitalism, as Advocated by Some Conservatives
Libertarians like Congressman Ron Paul, [the late] Justin Raimondo (of antiwar.com) and Alex Jones (of PrisonPlanet fame) say that what's needed is to restore America as "a republic, not an empire."* They talk about the good old days when the Constitution was honored, when our foreign policy followed George Washington's advice to avoid meddling in the affairs of other nations, when we had "true capitalism" with small government, no military-industrial complex, and capitalism was about entrepreneurs producing good products, not bankers speculating as parasites on the productive economy.
Theirs is a vision of a "mom and pop" capitalist world that is very attractive. People are friendly and honest. The competition is about making "a better mouse trap," not "dog-eat-dog" competition to pit workers against each other in a race to the bottom. Nobody is extremely rich or poor. The needs of all are met for the most part. It is not hard to see why decent people are attracted to these ideas.
Mom & Pop Capitalism, as Advocated by Some Liberals
Some liberals, such as Robert Reich most famously, want the same "Mom & Pop" capitalism that the conservatives dream of. In contrast to the conservatives, however, who think the way to get it is with less government, these liberals say the way to get it is with more government, specifically with more government regulation of capitalists to force them to behave nicely.
The Problem with Mom & Pop Capitalism, Be it Liberal or Conservative
The problem, however, with "mom and pop" capitalism--regardless of whether it is obtained with more or with less government--is the principles on which it is based and the kind of social relations that follow from those principles, and the dynamic that these set into motion. The principles are those of capitalism: capitalists own the means of production and their hired workers do not; people compete against each other instead of working for shared goals; instead of making the welfare of everybody the purpose of the economy, products and services are produced only to be sold for profit to those who can afford to buy them; it is considered natural and proper that some people are wealthier than others and should enjoy the benefits of socially produced wealth more than others.
When a society is organized around these capitalist principles, it inevitably enables some individuals, like the original John D. Rockefeller, to emerge and transform it eventually from a "mom and pop" world to a world of extreme inequality and corporate disregard for the values that decent people cherish. Mom and pop capitalism always and everywhere grows into corporate capitalism. This is the inevitable logic of the system that has landed us where we are today.
In the beginning of this process, the individuals like Rockefeller enjoy legitimacy and freedom of action because they operate within the principles of capitalism. Some of them, due to cleverness or luck, get a bit wealthier than most people. The competitive logic of capitalism cannot fail to produce winners and losers, and drive the winners to compete against each other resulting in ever wealthier and fewer winners. They buy up other companies until they dominate the industry, such as oil or railroads or the latest technology, whatever it may be. With this economic power they gain increased power over the government as old John D. did, and as the railroad barons who had the government give them vast tracts of public land did. Soon the economic and political power of the biggest winners dominates the land. The risings to power of the Rockefellers and of our present day plutocracy and of the military-industrial complex with its wars based on lies and of vampire bankers like Goldman-Sachs were not flukes; they were the full development of the social dynamics of a long ago seemingly benign "mom and pop" capitalism.
Creating (or re-creating) "mom and pop" capitalism does not get to the root of the problem, which is capitalist social relations. Trying to make a truly better world based on equality and mutual aid by creating "mom and pop" capitalism is like trying to rid a lawn of crabgrass by merely mowing the weeds down instead of uprooting them entirely. It may produce a lawn that doesn't look too bad initially, but the roots of the weeds remain and will eventually make the lawn ugly again.
Capitalism itself needs to be replaced by something very different, and this will require a fundamental social revolution--an egalitarian revolution. A new egalitarian kind of economic system needs to be created based on the principle that people contribute according to reasonable ability and take according to need or reasonable desire, in a moneyless society in which things are shared, not bought and sold, as described here with a more brief introduction here. And a new conception of democracy needs to emerge (described briefly here), in which lawmaking power exists only at the local level in assemblies in which all who live or work in the local community and who support equality and mutual aid--and only they--have the right to attend, with social order on a larger scale deriving from voluntary federation of local communities and workplaces, as discussed in the previous links.
As is becoming increasingly obvious to the American public, the problem in our society is a very big problem. And very big problems require very big solutions. Mom and pop capitalism is not a big enough solution to work.
What about Social Democracy?
Social democracy is simply capitalism at a moment in time when ordinary people (who want a more egalitarian society) have, by one means or another, forced the capitalist class to enact substantial reforms that benefit ordinary people. The existence of these reforms, however, does not mean that the conflict between the anti-egalitarian capitalists versus egalitarian working class people has disappeared. The capitalists continue to try to make society more unequal and undemocratic and if ordinary people are not vigorously fighting to make society truly egalitarian the anti-egalitarian forces will prevail.
Indeed, the anti-egalitarian forces are currently prevailing in the nations called social democracies, as I discuss in these articles:
* Part of the "A republic, not an empire" thinking includes the idea that the problem in the United States is that we no longer obey the Constitution. But as this article explains, the Constitution itself is part of the problem because it requires class inequality.