Capitalism

The concept of a “capitalist” first appeared in Holland in the early 1600’s, was developed in France during the 1700’s, and appeared in England in 1792. The first use of the term “capitalism” was by Louis Blanc in 1850, by Pierre-Joseph Proudhon in 1861, and established by Karl Marx in 1867. In all cases and especially with Marx, “capitalism” referred to a method of production. Present day treatments of capitalism provide a laundry list of human social constructs as “prerequisites” for the practice of capitalism: a willing labor force, a centralized government, a banking and legal system, free public infrastructure, technical expertise, etc. In no case is an abundance of natural resources listed as a prerequisite. Perhaps it is a given. But capitalism as a method of production requires proximity to a natural resource that can be processed into a commodity of value in a market place. Despite being new and untested, capitalism has millions of ardent supporters who have bet our destiny on its never ending success. No one knows what happens to capitalism when the resources are depleted, but the inhabitants of North America are finding out.

The United States of America went all out to win World War II. This effort consumed an enormous amount of natural resources while the technology required to extract and process these resources took a quantum leap forward. The euphoria of victory segued into an economic boom as the returning soldiers entered the labor market with a can-do attitude. The network of federal highways constructed during the 1950’s accelerated the production of and demand for goods. By the middle of that decade, the limits upon the remaining resources were being felt, so the U.S.A. colonized Central America and claimed the resources there in a desperate effort to keep it all going.

Fifteen years later the Factory Belt was rusting, arguments over which trees should be cut were erupting, and the rivers were burning. "Environmental protection" became an issue for those concerned about the long term effects of run-away extraction. This resulted in the enactment of the National Environmental Protection Act(1970), the Clean Water Act(1972), and the Endangered Species Act(1973). This was balanced by the federal government's interest in protecting corporations from liability (they are persons, too). This resulted in a zero enforcement policy. This does not mean that the federal government was either unaware of the rapid depletion of America's natural resources or denying that they were in danger of being utterly consumed. Both of these facts were recognized within the language of the Energy Policy and Conservation Act of 1975 which established "strategic reserves" on behalf of the federal government itself. The citizens were free to filter their air and buy bottled water (a capitalist's wildest dream come true).

During the 1960’s, the capitalists realized that there was only one available resource left: humans. They began the extraction of the wealth and equity from the labor force that had been built up during the post war boom and used the proceeds to relocate American industries closer to cheap labor. Banks and public colleges and universities began to charge fees. Health care was replaced by health insurance and insurance in all forms began to be required by law. Bank of America launched the first universal credit card in 1958. The laws prohibiting usury (enacted by the several states) were not enforced. No one asked where this would end up; they just wanted to get there as soon as possible.

During the 1990’s, the capitalists prepared for the final assault by causing the central government to turn against its citizens. The last hindrances to extracting money from humans were removed:

1992: established by federal charter in 1972, Sallie Mae was privatized and began brokering high interest student loans

1994: Violent Crime Control and Law Enforcement Act began the federal control of local law enforcement
1994: Prison Litigation Reform Act prohibited appeals to sentences resulting from the above Act
1994: Blue Cross Blue Shield divested their nonprofit assets and status to become a private for profit. Begun respectively in 1929 and 1938, Blue Cross and Blue Shield licensees were tax exempt under 501(c)(4) as social welfare plans; the two partnered with the federal government during the 1960’s to administer Medicare and merged in 1982; licensees still enjoy tax privileges.

1994: NAFTA went into effect putting the labor force of the U.S. on a par with that of Mexico.

1996: Telecommunications Act of 1996 removed all restrictions on the media and absolved it of any responsibility to act in the public interest.
1996: Personal Responsibility and Work Opportunity Act or “welfare reform” was motivated by neither welfare nor reform, but by the desire to dump 5 million unskilled workers into the U.S. labor market.
1996: The Supreme Court ruled in Smiley vs. Citibank that states cannot regulate credit card interest and that “interest” includes fees.

1997: Established by federal charter for the public benefit in 1968 and 1970 respectively, Fannie Mae and Freddie Mac entered the subprime housing market.

1998: The federal government began contracting with private prisons.

1999: The Glass –Steagall Act was gutted allowing banks to grow without limit and to sell insurance including credit default swaps.

2000: Bankruptcy Abuse Prevention and Consumer Protection Act was passed by Congress (enacted in 2005) at the behest of credit card companies to greatly curtail access to personal bankruptcy; allows creditors to pass debt on to the next generation.

All of the above was presented with many pretty words and great sincerity masking many a wink and many a nod. The inhabitants of North America could not and later refused to believe that the incredible abundance of an entire continent could be squandered in a span of less than five generations. And, of course, no one wants to admit to being used. All discussion of such depressing topics was universally discouraged.

Today, banks have access to 3,200 different fees with which to extract loose change from their depositors; money deposited in a U.S. bank immediately becomes the possession of the bank and will be used to meet the obligations of the bank when the next failure occurs so that the shareholders can maintain their dividends and the corporate officers their annual bonii. Banks pay no interest on the money deposited with them while often charging a fee for each check cashed: banks are no longer about investment, but are only about extraction. Bankster schemes have become so unremarkable that they include line items for fines as a cost of doing business. The Supreme Court has been used to legalize the defunding of pension plans so that these trust accounts can be converted directly into profit thus blessing the extraction of foregone wages bargained away in good faith.

Today, student debt averages around $50,000 upon graduating with a bachelor’s degree. Health insurance has entirely replaced health care and total credit lines have replaced savings plans. The treatment of cancer has become a growth industry. “Recessions” were actually milestones upon the road to ultimate extraction; each was supposedly caused by differing factors, but all had the same result: banks controlled more and more of America’s equity after each one. U.S. citizens, having allowed themselves to become cash cows plodding amenably down that road, marveled greatly at the pretty lights when they were smacked in the head and are now meat swinging on a hook, gutted and left to cool. What market have the capitalists developed to sell us to? Perhaps the next trade agreement will provide some clues…if we are ever allowed to read it.

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Comments

dkmich's picture

Step by step, we've been lead to slaughter. Unfettered capitalism and religion must die. They bring out the worst in humanity.

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18 users have voted.

*donate *follow us on Twitter *like us on Facebook *dump Google

@dkmich

eliminate either capitalism or religion.

Pray I am wrong. Wink

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10 users have voted.
Meteor Man's picture

I am currently fighting the IRS over their clawback for my student loans. I received a statement for one $3,500 student loan that is now over $11,000 because of penalties, fees and interest.

The government has collected about $1.1 billion from Social Security recipients of all ages to go toward unpaid student loans since 2001, including $171 million last year, the Government Accountability Office said Tuesday. Most affected recipients in fiscal year 2015—114,000—were age 50 or older and receiving disability benefits, with the typical borrower losing about $140 a month. About 38,000 were above age 64.

The report highlights the sharp growth in baby boomers entering retirement with student debt, most of it borrowed years ago to cover their own educations but some used to pay for their children’s schooling. Overall, about seven million Americans age 50 and older owed about $205 billion in federal student debt last year. About 1 in 3 were in default, raising the likelihood that garnishments will increase as more boomers retire.

http://www.zerohedge.com/news/2016-12-21/baby-boomers-increasingly-havin...

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19 users have voted.

Cali Kush: a bowl a day keeps the doctor away.

thanatokephaloides's picture

@Meteor Man

http://www.zerohedge.com/news/2016-12-21/baby-boomers-increasingly-havin...

As all too often over on ZeroHedge, the article is OK as far as it goes; but I recommend avoidance of the comment section, which is replete with mean-heads, greedheads, and victim blamers. In other words, typical Calvinist right-wing nut jobs.

Diablo

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10 users have voted.

"Some members of the government are now investigating opioid pain killers but they are investigating the wrong thing. Despair-masking drugs are not the problem. Despair is."
-- featheredsprite

travelerxxx's picture

Thank-you for this, strollingone. I wish I could give it 100 thumbs-up!

To me, the story of capitalism is the story of human greed, now unfettered. Cemeteries are populated with its victims and the Earth simmers on the edge of disaster due to it running unchecked.

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Cassiodorus's picture

Mostly they just can't imagine an alternative.

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12 users have voted.

"Earth/Gaia is maker and destroyer, not resource to be exploited or ward to be protected or nursing mother promising nourishment." - Donna Haraway

thanatokephaloides's picture

@Cassiodorus @Cassiodorus

A lot of people don't really "support capitalism." Mostly they just can't imagine an alternative.

Or the alternative they can imagine is that of Lenin-Stalinist Marxism, which is just as bad if not worse.

The idea of, say, an anarchosocialist humanity is beyond their ken.....

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9 users have voted.

"Some members of the government are now investigating opioid pain killers but they are investigating the wrong thing. Despair-masking drugs are not the problem. Despair is."
-- featheredsprite

Cassiodorus's picture

@thanatokephaloides "Omigod we're going to get the state-capitalist Czars!" Coming from folks who know nothing of history and who can't really understand the peculiarly Russian nature of the USSR.

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11 users have voted.

"Earth/Gaia is maker and destroyer, not resource to be exploited or ward to be protected or nursing mother promising nourishment." - Donna Haraway

thanatokephaloides's picture

@Cassiodorus

Yeah I loved that one. "Omigod we're going to get the state-capitalist Czars!" Coming from folks who know nothing of history and who can't really understand the peculiarly Russian nature of the USSR.

Admittedly, Leninist-Stalinist Communism set the cause of actual socialism back at least a century, and largely because for most of the 20th Century Lenin-Stalinism was the Socialism Westerners knew. The peculiarly Russian features, such as compulsory atheism, caused more problems than they solved. And attempts to transplant it outside of Russia/USSR usually caused nothing but trouble.

All that gave Socialism an undeserved bad name that it's only just now beginning to escape. And if Bernie Sanders has done nothing else, he's accomplished that, at least!

Wink

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17 users have voted.

"Some members of the government are now investigating opioid pain killers but they are investigating the wrong thing. Despair-masking drugs are not the problem. Despair is."
-- featheredsprite

Meteor Man's picture

@Cassiodorus Just barely, but even s @Cassiodorus o:
https://www.google.com/amp/s/www.washingtonpost.com/amphtml/news/wonk/wp...

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11 users have voted.

Cali Kush: a bowl a day keeps the doctor away.

Cassiodorus's picture

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3 users have voted.

"Earth/Gaia is maker and destroyer, not resource to be exploited or ward to be protected or nursing mother promising nourishment." - Donna Haraway

ovals49's picture

their elders puzzled over the invading white man's apparent inability to understand the need for maintaining the health and balance of the natural world that we live in with all its creatures. The invaders self destructive path of reckless expansion took root across the continent, embracing mindlessness and greed.

Capitalism reflects the further refinement of our efforts to exhaust the diverse and abundant, yet exquisitely fragile, film of life on our planet. The destruction is nearly complete, in terms of the already devastating changes that are baked into the climate changes that are unfolding with unexpected rapidity. Collectively, we still don't get it. But we will.

In the words of Hunter Thompson: Don't let the Greedheads win.

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18 users have voted.

"Humanity is just an evolutionary cul de sac."
George Carlin

snoopydawg's picture

@ovals49 while the rest of humanity deals with the effects of climate change.
The rich bastards are buying old missile silos or building underground bunkers to ride out the effects.
They have hired mercenary companies to guard them and it would be wonderful if they turned on their employers and took the places themselves.

IMG_1111.JPG

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14 users have voted.

I’m betting billionaires taste like chicken. More research required…
Someone should put together a new cookbook with this in mind.

@snoopydawg Can you imagine being an armed mercenary being paid with, what, food? How would money be worth anything? And that mercenary has the guns, not the assholes in the silo! And that mercenary being paid with dehydrated tofu will honor his/her contract to protect the silo rich inhabitants, risking their lives?
God Almighty, this is a book in the making, isn't it?
I can assure Bill Gates and his family that he would be making an enormous mistake to hire me to make him safe so he could watch fucking movies, swim in the pool.
At his fucking peril.

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snoopydawg's picture

@on the cusp the guards probably get to bring their families with them to live in the bunkers. Still, I wouldn't want to trust them with my life.

Another thing to think about is when the shit hits the fan and people start losing their money because the banks won't let them withdraw it, people are going to start rioting and TPTB are going to rely on cops and mercenaries. But one day those cops are going to find that they too will be on the chopping board and they will join with we the people and fight against the banks.

Who will TPTB turn to for protection when that happens? Fasten your seatbelt, it's going to be a bumpy ride Smile

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11 users have voted.

I’m betting billionaires taste like chicken. More research required…
Someone should put together a new cookbook with this in mind.

Lookout's picture

The capitalist system has collapsed and is feeding on itself. How can anyone deny climate change and fight for fossil fuels? It is the path to extinction...and we are on it!

https://www.theguardian.com/environment/2017/jul/10/earths-sixth-mass-ex...

The ones that think they can survive in their bunker are fools.

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16 users have voted.

“Until justice rolls down like water and righteousness like a mighty stream.”

mimi's picture

@Lookout
techno-elite-CEOs and banksteristas are hiding out the collapse, at least the poor folk mercenaries could still shoot them to Mars. Good Riddance.

Sorry, I can't help being silly. I'll take a break now. Don't worry.

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"History is what the present chooses to remember" - Carl Becker

snoopydawg's picture

As you stated, the next bank crash is not going to be bailed out by the government, the banks are going to take people's money just like what happened in Greece.

Greece Has Been a Laboratory on a Way Out of a Capitalist Crisis

The crisis in Greece has no end in sight. While the media cheered a recent agreement between the Syriza government and creditors, there is no escaping the reality of an unsustainable debt, a completely destroyed economy in which successive austerity programs have brought immense suffering to the Greek people.

This was a test case to see how austerity measures would affect the Greek citizenry and it looks like a smashing success. For the financial institutions, not for the people of Greece.
The republicans look like they want to see how austerity will go over here and their first salvo is their health care legislation that will see millions lose their insurance and will begin the dismantling of Medicaid.
Next comes their budget plan to gut every social programs that the dredges (in their eyes)of our society rely on.
This includes LIHEAP which is the program that the poor, elderly, and disabled people rely on to help pay their utilities during the winter.
Food stamps have been cut each time the farm bill comes up and it seems that the republicans are always the majority party when this happens. 5 years ago they wanted to cut $40 billion from the farm bill, but the democrats got it reduced to only $8 billion. And our protector in the White House signed it.

Next comes the infrastructure bill that Trump wants to spend $1 trillion on. Sounds good, right?
Nope. He wants to outsource infrastructure to the private sector. We know how well that works for the corporations who buy our services for pennies on the dollar. Just like what happened when Chicago sold their toll roads to the Saudis and their parking to Chase (?).

Trump ran on re-working nafta, but he's given up on that idea. Instead he is working on a new trade agreement that is supposed to be worse than the TPP.

The ISDS that is in the nafta agreement doesn't even have to be used.
Energy Transfer, the builder of the DAPL pipeline has used eminent domain on 9 family's property which is illegal according to the law that Bush signed. This states that eminent domain can only be used when it benefits the public. And of course the Obama administration didn't enforce the law.

To think that we dodged the bullet with the Clintons locked out of the WH. This is why it seems pretty obvious to me that the democrats losing so many seats at the federal and state levels was done intentionally. The democrats have limited ways to stop the republicans from in acting their legislation. Especially after they changed the filibuster rules. Why would they have done that if not to leave them neutered?
Yep. I am this cynical.

Meanwhile, the slaughter in the Middle East hasn't just continued, it's been ramped up by relaxing the rules for civilian casualties.

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16 users have voted.

I’m betting billionaires taste like chicken. More research required…
Someone should put together a new cookbook with this in mind.

gulfgal98's picture

@snoopydawg Two studies, one governmental and the second, private, have shown that the SNAP program is one of the most effective economic generators as far as return upon cost.

Those who believe in cutting SNAP funding as a cost-saving measure should know that food stamps boost the economy -- not put a strain on it. Supporters of federal food benefits programs including President George W. Bush understood this, and proved the economic value of SNAP by sanctioning a USDA study that found that $1 in SNAP benefits generates $1.84 in gross domestic product (GDP). Mark Zandi, of Moody's Economy.com, confirmed the economic boost in an independent study that found that every SNAP dollar spent generates $1.73 in real GDP increase. "Expanding food stamps," the study read, "is the most effective way to prime the economy's pump."

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4 users have voted.

"I don't want to run the empire, I want to bring it down!" ~Dr. Cornel West "...isn't the problem here that the government takes on, arbitrarily and without justification, an adversarial attitude towards its citizenry?" ~CantStoptheMacedonianSignal

ggersh's picture

clinton did in destroying amerika is perfect, only
the MSM can't see the quid pro quo.

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12 users have voted.

“We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and our banks destroy the economy.”

― Chris Hedges

Alligator Ed's picture

It appears you have only joined c99 a few days ago. Welcome! Your writing is superb, insightful and pointed. Amongst many of your observations, I like this one:

Bankster schemes have become so unremarkable that they include line items for fines as a cost of doing business. The Supreme Court has been used to legalize the defunding of pension plans so that these trust accounts can be converted directly into profit thus blessing the extraction of foregone wages bargained away in good faith.

SCOTUS is a buoy floating in the rough waters of our "democracy" with barely enough tether to keep its head above water. The continuing regressive SC decisions, especially since Citizens United, has only accelerated our descent into capitalist hell. When the State of Florida subsides below the waves in a few years, even if no more fracking, will DT simply build a dike around Mar-a-lago or buy homes on higher ground?

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@Alligator Ed simply invoke imminent domain then and they won't even have to buy that higher ground. National Security don't ya know...

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Yes, both capitalism and socialism were about who owned the means of production. Sticking with the original meanings might have maintained a clarity that has been lost. Now, people believe that you can't have socialism and democracy simultaneously or some such. Or that Social Security makes us part of the Red Menace. It's nuts.

I would point out that the "euphoria of victory:"was not entirely responsible for the economic boom. A lot of Europe had been bombed to bits, but we had not; and we were denying both nations that had been our biggest pre-war competitors, Germany and Japan, the ability to manufacture, even to build machinery. (Screenwriters Robert Zemeckis and Bob Gale sum this up brilliantly and briefly in Back to the Future, when the Prof, then unaware of Japan's later skills, denigrates products made in Japan.) Those factors really cut down on competition.

Plus, there was a huge built up demand for things like cars and TV's, even stockings, production of which had either stopped or been severely limited while US factories and raw materials were devoted to war production. Demand for cars continued to grow as the interstate road system, first conceived in the Model T era, was finally implemented. (FDR's predecessors had overseen some bits and pieces in that direction. However, FDR had drawn a grid on a map of the US and intended to go for it as a Depression project, but World War II stopped him. So, Ike got the credit. IMO, Ike gets a lot of undeserved credit, but that's another story.)

With the roads and the cars, people moved from inner city manufacturing areas, to which they'd once walked or taken intra-city public transportation, maybe a trolley, to the suburbs. That meant a building boom, as did housing built outside cities for returning veterans. As spouses, fiancés and fiancée returned from war, bought the homes and started families. New homes need furniture, drapes, carpets, etc. Concomitantly, a wedding boom and a baby BOOM! created demand for all kinds of goods and services.

The above just skims the surface. I guess the baby boom could be attributed in part to post war euphoria, but a lot of it was just nuts and bolts.

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Mark from Queens's picture

Bernie said it over and over, as well as referring to the underlying destruction of its unbridled scamming and scheming to criminally hoard mind-boggling fudged numbers wealth in their accounts, which ultimately manifests in outright bribery and the buying of favorable legislation. Lots of folks woke up this time around.

At every juncture that you laid out so well, another facet of the economy was gifted up to appease campaign donors and their monomania for profit margins - the altar upon which we've been trained to worship. It's the story of America: Get Rich Quick, The Business of America Is Business, The American Dream, etc. It's all a lie, and the younger generation are perhaps the first to begin seeing that clearly, as they see that socialism is the only antidote for this mindless greed, reckless economic abandon and focus of materialism and consumerism.

The freedom we often brag about having is quite limited to the empty and vacuous life of choosing which cheap disposable goods and franchise food you'll pick while shopping to take away the pain of increasingly shittier job, longer hours, reduced benefits and cuts in pay.

America's infrastructure has been reduced to a quicksand of student loan/medical/comsumer/mortgage debt in which we're sinking in, while the tiny cabal who operate those sectors enrich themselves on our backs.

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10 users have voted.

(thirty three and a third at TOP)

"If I should ever die, God forbid, let this be my epitaph:

THE ONLY PROOF HE NEEDED
FOR THE EXISTENCE OF GOD
WAS MUSIC"

- Kurt Vonnegut

@Mark from Queens
of nearly everything that surrounds and sustains us -- aka "the environment". We have definitely not been making the earth a more habitable and enjoyable place to live -- not for the other animals, not for the fish and the sea creatures, not for the birds, not for the trees... and certainly not for ourselves either.

The real bottom line doesn't appear on corporate balance sheets. The real bottom line is whatever the rest of us are left to live with, after our distinguished capitalists have finished cooking their books, and converting actual value into worthless dollars.

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native

strollingone's picture

@native so complete, so well said.

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strollingone's picture

so well said. This was meant as a response to Native's comment. Once again, I have failed to follow clearly presented instructions to my own embarrassment. strollingone

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smiley7's picture

joining the chorus on this thread in appreciating your work and looking forward to more.

Welcome!

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3 users have voted.
Tony Wikrent's picture

Though I must point out that the one alternative to capitalism which actually works--indeed, it is the only school of economic thought which has actually succeeded in creating prosperous national economies-- is the American School. I have a new post at Real Economics ready to add here later tonight or tomorrow.

What I hope causes people to stop and think is the fact that capitalism as a concept did not really exist at the time the USA was founded. Conservatives and libertarians insist that the USA was established as a capitalist country--but how could that be if capitalism as a concept did not exist at the time the Constitution was being deliberated, framed, debated, and ratified? So what was the USA founded as? A republic -- and from what I've read of the idea of a republic, I conclude that republicanism is actually more amenable to social democracy than to capitalism. In fact, the neo-mercantilist intent of the founders is quite clear, and it was quite contrary to laissez faire capitalism. The crucial point is that the neo-mercantilism of the new American republic was distinguished from the mercantilism of the monarchies and oligarchies of Europe by the Constitutional mandate to promote the General Welfare. See my Introduction to my abridged and annotated edition of The Power to Govern: Then and Now.

It would of course be so much more pleasant if the classical ideals of republicanism, especially civic virtue (the idea that people must be willing to forsake their personal self-interest when it conflicts with the common good), but history is very, very messy. Morris Berman has written an excellent book in which he argues that the concept that prevailed over republicanism was what he terms "hustling." I think it may be more accurate to call it "capitalism."

The history of USA, I believe, is one of continual conflict between the republican ideals of the General Welfare and civic virtue, and the emergence of a capitalist economy. And the side promoting a capitalist economy is quite ugly, what with its greed, avarice, arrogance, and, very often, murderous intent. The problem is that the side promoting capitalism has financial resources that are pretty near overwhelming, and the historical process of capitalism leads to increasingly concentrated economic power, which uses its financial resources to corrupt and outright buy political power. And the framers of the Constitution were quote aware that this was a problem throughout the history of republics and governments. They knew that the rich were as much a threat as a standing army. Why haven't we been taught that? Why the focus only on the threat of a standing army? Because, obviously, the rich don't want to be thought of automatically as a threat.

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- Tony Wikrent
Nation Builder Books(nbbooks)
Mebane, NC 27302
2nbbooks@gmail.com

strollingone's picture

@Tony Wikrent @Tony Wikrent in the way that it has in this past election. Notice that the question is asked exclusively of the working class as if the bosses have it right and all would be well if the workers would just follow along. I submit to you now that it is the elites that are voting against their own self-interest in the sense used by de Tocqueville when he wrote of "self-interest, rightly understood" as the key to the success of the United States of America. That was his response. It is the "right understanding" that has gone astray and I fear that, once gone, it cannot come back.

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