Monopoly

Lately there's been a lot of (unintelligent) public discourse about capitalism and socialism/communism. At its most basic level, the argument for capitalism is that competition in the private sector is good, allows for creativity and ingenuity, rewards hard work, and benefits the Joe the Consumer because businesses compete for Joe's business. I believe this to be true, which is why I'm not a socialist. At its most basic level, the argument for socialism is that the government should "own" all the industries...what the advantage to this is I can't even tell you, which only goes to show how far I fall from a socialist.

But there's a scary trend going on in Western capitalism. Many of our major industries--the financial sector, automobile, communications, gas companies, farming (the list goes on, I'm sure)--are becoming more and more centralized; that is to say, what was once "competition in the private sector" has become one or two major companies dominating the industry. Obviously, less competition means higher costs for Joe (think gas prices a few months ago). But it also leads to a lack of creativity and ingenuity (think auto industry's failure to go green). It makes it almost impossible for the average American to start a business in one of these industries, (which doesn't reward hard work.) But most disturbing of all is that the failure of one of these major companies in a major industry can threaten to bring the whole economy to a screeching halt (think AIG, and the government's $85 billion bailout in order to avoid this.)

Think about our current economy, and tell me how the situation I've just outlined is all that different from socialism? Look at the recent bailouts...the goal is to reduce the impact of the financial crisis on main street. And how do they propose doing this? Essentially, by nationalizing our ailing major financial institutions! It's simply a transfer of power from one highly centralized power to another. I feel like ridiculing those who call our country's recent actions as "socialist" while clinging to the present system. They're not that different!

So what's my suggestion? Well, as I mentioned earlier, I believe in the theoretical fundamentals of capitalism, that is: that competition in the private sector is good, allows for creativity and ingenuity, rewards hard work, and benefits Joe the Consumer because businesses compete for Joe's business. However, I am not so naive as to think that capitalism can maintain "competition in the private sector" in the long term. Think of the game Monopoly: as one player gains more and more financial power, what happens? You pay much more money for landing on their property...eventually, there is one winner who owns everything, and many losers. It makes for a great game, but a very poor economy.

If capitalism is to work like we intend it to, there must be a regulator who helps to maintain a healthy competition between businesses. Yes, this calls for interference from government...but it also allows the positive aspects of capitalism to flourish, while controlling the devastating effects that our economy is experiencing right now. This is nothing new, by the way. Read up on Teddy Roosevelt and his trust-busting. Regulation of capitalism is necessary if we want to avoid the fate which Karl Marx predicted--that is, that capitalism will bring about its own destruction.