(This essay first appeared in Trinity Christian College's student newspaper, The Courier a few weeks ago)
On October 3rd, 1993, a date many of us are too young to remember, forces of the Russian army loyal to President Boris Yeltsin opened fire on the Russian parliament.
After his radical and unpopular economic reforms had met resistance in the Russian legislature, Yeltsin had dissolved the Congress of People's Deputies and the Supreme Soviet, the constitutionally-established legislative bodies of the Russian Federation on September 21st. In response to this direct violation of the Russian Constitution, the legislature had impeached Yeltsin, and Yeltsin had refused to leave.
Tank shells eventually resolved the conflict. While the country reeled in shock, Yeltsin rewrote the Russian constitution and pushed through his economic reforms.
These actions were hailed by the West, including U.S. President Bill Clinton, as an important victory for democracy and for capitalism; the democratically-elected legislators were demonized as anti-government communists.
The irony is that despite the wishes of President Yeltsin and Western leaders, the Russian people had it made it clear that they did not want laissez-faire capitalism, what Yeltsin gave them, but a mixed economy welfare state. The principles of democracy state that a government's power lies ultimately with its people, but with the aid of military muscle, President Yeltsin found his way around public opinion and instituted his version of Chicago School economics.
The desires of the Russian people in 1993 were founded upon solid historical evidence. In nation after nation—America in the Great Depression, Chile under Pinochet, Britain in the 1980s—the effects of deregulated capitalism were plain: the rich got richer, the poor got poorer. Their fears have since been confirmed. Today the majority of wealth in Russia is held by a small group of wealthy capitalists, euphemistically known as oligarchs.
In this country, the lessons of the Great Depression are being forgotten. Followers of Milton Friedman, father of the Chicago School of economics, those who adhere to his utopian vision of a free market left entirely to its own devices have consistently attempted to deregulate the American economy. They promise this system will benefit the whole nation. The wealth of the top will trickle down to the rest of us.
The facts tell a different story. In the richest nation on Earth, approximately 47 million Americans do not have health insurance and 37 million are living below the poverty line. Under the Presidency of George W. Bush, a proud proponent of economic deregulation, these numbers have grown.
Opponents to economic regulation, when the trickle-down myth is not enough to satisfy their questioners, will often claim that government regulation in the economy is a form of socialism. Nationalization, too, whether it is of banks or health insurance, is tainted red.
Yet, in the midst of what is being called the worst economic disaster since the Great Depression, when deregulated capitalism has again thrown the world into crisis, perhaps we would do well not to reject an idea simply because we have been inundated since birth to regard it as some sort of demon-spawn. Perhaps we would do better to remember the facts.
Bad mortgages began this economic crisis. Banks made risky investments that, had the real estate bubble continued to expand, would have netted them a profit. Rather than expand, however, the bubble popped. Had regulations been in place to prevent banks from offering those bad mortgages, the crisis would not have occurred.
And if those regulations constitute socialism, then socialism would have saved this country $700 billion.
When an industry or other societal faculty is privatized it becomes a for-profit institution. In many cases—IPods, DVDs, Big Macs—this method works. So long as regulations are in place to protect the rights of the workers employed in producing these products, for-profit corporations can meet the needs of their consumers and their employers. But when the discussion moves from commodities to utilities, to the necessities of life, for-profit has proven it is not up to the task.
Six million people die every year from hunger, according the United Nations. Over two billion people live on less than $2 a day, according to the World Bank. Yet the capacity to end world hunger and world poverty exist at this very moment.
Why do these injustices persist? Because enough people have bought into the lie of trickle-down wealth and unrestrained capitalism. Because the economy of the West, in service of these principles, venerates the god of Profit before all else. And it is simply not profitable to fight hunger or poverty. Poverty creates cheap workers. Food given to the starving does not yield a profit. So sweatshops remain open for business and stores of surplus food rot in warehouses.
In the face of unrestrained capitalism stands the successful record of mixed economies, Keynesian and social democratic system. It's a simple idea. The free market is a powerful engine, but left alone it turns workers into a resource and seeks profit at their expense. Thus one seeks a balance between free market productivity and workers rights through regulation of the economy. In countries around the world, such a balance has been achieved.
This kind of middle-of-the-road policy is opposed in America because it means smaller profits for the rich, and they've managed to get the rest of us to believe, despite strong evidence to the contrary, in the myth of trickle-down prosperity. While we plunge into economic crisis, the wealthy soar safely overhead on golden parachutes. If the crusade for deregulation continues the situation can only worsen.
The victory of laissez-faire capitalism in America and the counterpart ascension of American oligarchs requires something far less dramatic than tanks. It requires only that we care more about cheap shoes than the plight of sweatshop workers; that we believe the insidious lie that all Americans can be rich if they work hard enough; that we believe the counterpart falsehood that if someone is poor it is his own fault; that we, with our voices or by our silence, continue to support a system that values the bottom line more than the life, liberty and happiness of human beings. To our great detriment, the religion of profit-worship will prevail in this nation unless we, the people, oppose it. And if we fail in this task, when our delusions of the American Dream crumble around us, we will have no one to blame but ourselves.